<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1997
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PIONEER NATURAL RESOURCES COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 75-2702753
(State of Jurisdiction of Corporation or (I.R.S. Employer Identification No.)
Organization)
</TABLE>
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
(972) 444-9001
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-----------------
Scott D. Sheffield
President and Chief Executive Officer
Pioneer Natural Resources Company
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
(972) 444-9001
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Mark L. Withrow Robert L. Kimball
Executive Vice President and General Counsel Vinson & Elkins L.L.P.
Pioneer Natural Resources Company 2001 Ross Avenue
1400 Williams Square West Suite 3700
5205 North O'Connor Blvd. Dallas, Texas 75201
Irving, Texas 75039 (214) 220-7700
(972) 444-9001
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [x]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [x]
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CALCULATION OF REGISTRATION FEE
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PROPOSED
MAXIMUM PROPOSED
OFFERING MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO PRICE AGGREGATE REGISTRATION
TO BE REGISTERED BE REGISTERED PER UNIT (1) OFFERING PRICE (2) FEE
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<S> <C> <C> <C> <C>
Debt Securities (3)
Preferred Stock, par value $.01 per
share (4)(5)
Depositary Shares (5) (6) (6) (6) (6)
Common Stock, par value $.01 per
share (7)
Warrants (8)
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Total $ 1,400,000,000 (9)(10) 100% $ 1,400,000,000(9) $ 413,000 (11)
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</TABLE>
FOOTNOTES TO TABLE ON NEXT PAGE
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included herein also relates to a total of $500,000,000 of Debt Securities and
Common Stock of the registrant previously registered pursuant to Rule 415 under
Registration Statement on Form S-3 No. 333-20483 and not issued. This
Registration Statement constitutes Post-Effective Amendment No. 1 to the
Registration Statement Form S-3 No. 333-20483.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON THE DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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(1) The proposed maximum offering price per unit will be determined from
time to time by the registrant in connection with the issuance by the
registrant of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933.
(3) Subject to note (9) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt
Securities are issued at an original issue discount, then the offering
price shall be in the greater principal amount as shall result in an
aggregate initial offering price not to exceed $1,400,000,000 less
the dollar amount of any securities previously issued hereunder.
(4) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by the registrant.
(5) Subject to note (9) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the
event the registrant elects to offer to the public fractional
interests in shares of Preferred Stock registered hereunder,
Depositary Receipts will be distributed to those persons purchasing
the fractional interests and the shares of Preferred Stock will be
issued to the depositary under the Deposit Agreement.
(6) Not applicable pursuant to General Instruction II.D. of Form S-3.
(7) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from
time to time, by the registrant. There are also being registered
hereunder an indeterminate number of shares of Common Stock as shall
be issuable upon conversion or redemption of Preferred Stock or Debt
Securities registered hereunder.
(8) Subject to note (9) below, there is being registered hereunder an
indeterminate amount and number of Warrants, representing rights to
purchase Debt Securities, Preferred Stock, or Common Stock registered
hereunder.
(9) In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this Registration
Statement exceed $1,400,000,000 or the equivalent thereof in one or
more foreign currencies, foreign currency units, or composite
currencies. The aggregate amount of Common Stock registered hereunder
is further limited to that which is permissible under Rule 415(a)(4)
under the Securities Act of 1933. The securities registered hereunder
may be sold separately or as units with other securities registered
hereunder.
(10) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
constituting a part of this Registration Statement also relates to
$500,000,000 of the registrant's securities registered under
Registration Statement No. 333-20483.
(11) A registration fee was previously paid in connection with the
registration of a total of $500,000,000 of Debt Securities and
Common Stock of the registrant pursuant to Rule 415 on Registration
Statement No. 333-20483, and $265,500 of the registration fee is being
paid herewith in connection with the registration of an additional
$900,000,000 of securities registered hereunder.
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which the offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any the State.
SUBJECT TO COMPLETION DATED DECEMBER 15, 1997
PROSPECTUS
(LOGO)PIONEER NATURAL RESOURCES COMPANY
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
Pioneer Natural Resources Company (the "Company"), a Delaware
corporation, may offer from time to time (a) debt securities ("Debt
Securities"), which may be subordinated to other indebtedness of the Company,
(b) warrants to purchase Debt Securities ("Debt Warrants"), (c) shares of
preferred stock, par value $.01 per share ("Preferred Stock"), (d) warrants to
purchase shares of Preferred Stock ("Preferred Stock Warrants"), (e) depositary
shares representing entitlement to all rights and preferences of a fraction of
a share of Preferred Stock of a specified series ("Depositary Shares"), (f)
shares of common stock, par value $.01 per share ("Common Stock"), or (g)
warrants to purchase shares of Common Stock ("Common Stock Warrants"), all
having an aggregate initial public offering price not to exceed $ 1,400,000,000
or the equivalent thereof in one or more foreign currencies, foreign currency
units or composite currencies, including European Currency Units. The Debt
Warrants, Preferred Stock Warrants and Common Stock Warrants are referred to
herein collectively as "Warrants," and the Debt Securities, Preferred Stock,
Depositary Shares, Common Stock and Warrants are referred to herein
collectively as the "Offered Securities." The Offered Securities may be
offered, separately or as units with other Offered Securities, in separate
series in amounts, at prices and on terms to be determined at or prior to the
time of sale.
The specific terms of the Offered Securities with respect to which
this Prospectus is being delivered will be set forth in an accompanying
supplement to this Prospectus (a "Prospectus Supplement"), together with the
terms of the offering of the Offered Securities and the initial price and the
net proceeds to the Company from the sale thereof. The Prospectus Supplement
will include, with regard to the particular Offered Securities, the following
information: (a) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking, authorized denomination, maturity, rate or
method of calculation of interest and dates for payment thereof, any
exchangeability, conversion, redemption, prepayment, or sinking fund
provisions, the currency or currency unit in which principal, premium, or
interest is payable, the designation of the trustee acting under the applicable
indenture, and the initial offering price; (b) in the case of Preferred Stock,
the designation, number of shares, liquidation preference per share, initial
public offering price, dividend rate (or method of calculation thereof), dates
on which dividends shall be payable and dates from which dividends shall
accrue, any redemption or sinking fund provisions, any conversion or exchange
rights, and whether the Company has elected to offer the Preferred Stock in the
form of Depositary Shares; (c) in the case of Common Stock, the number of
shares and the terms of the offering and sale thereof; (d) in the case of
Warrants, the number and terms thereof, the designation and the number of
securities issuable upon exercise, the exercise price, the terms of the
offering and sale thereof, and where applicable, the duration and detachability
thereof; and (e) in the case of all Offered Securities, whether the Offered
Securities will be offered separately or as a unit with other Offered
Securities. The Prospectus Supplement will also contain information, where
applicable, about material United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered
Securities covered by the Prospectus Supplement.
The Company may sell the Offered Securities directly, through agents
designated from time to time, or through underwriters or dealers. If any
agents, underwriters or dealers are involved in the sale of the Offered
Securities, the names of the agents, underwriters or dealers and any applicable
commissions or discounts and the net proceeds to the Company from the sale will
be set forth in the applicable Prospectus Supplement.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED
SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 199 .
<PAGE> 4
CERTAIN PERSONS PARTICIPATING IN AN OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
OFFERED SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH OFFERED SECURITIES, AND THE IMPOSITION OF A PENALTY BID,
DURING AND AFTER AN OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN
OF DISTRIBUTION."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"). It files reports, proxy
statements, and other information with the Securities and Exchange Commission
(the "SEC"). Those reports, proxy statements, and other information can be
inspected and copied at the public reference facilities maintained by the SEC
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the SEC at 7 World Trade Center, Suite 1300, New York, New
York 10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60611.
Copies of these materials can be obtained at prescribed rates from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
These reports, proxy statements and other information may also be obtained
without charge from the web site that the SEC maintains at http://www.sec.gov.
These reports, proxy statements, and other information also may be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed with the SEC a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933 (the
"Securities Act") with respect to the Offered Securities. This Prospectus and
any accompanying Prospectus Supplement do not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. For further information
with respect to the Company and the Offered Securities, reference is made to
the Registration Statement and to the exhibits thereto. Statements contained
herein concerning the provisions of certain documents are not necessarily
complete, and in each instance, reference is made to the copy of the document
filed as an exhibit to the Registration Statement or otherwise filed with the
SEC. Each such statement is qualified in its entirety by that reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company, Parker &
Parsley Petroleum Company ("Parker & Parsley") and MESA Inc. ("Mesa") with the
SEC, are incorporated by reference into this Prospectus, and are deemed to be a
part of this Prospectus:
1. Mesa's Annual Report on Forms 10-K and 10-K/A for the year ended
December 31, 1996;
2. Mesa's Quarterly Report on Form 10-Q for the period ended March 31,
1997;
3. Mesa's Quarterly Report on Form 10-Q for the period ended June 30,
1997;
4. Mesa's Current Reports on Form 8-K, dated February 7, 1997, and April
6, 1997, and Mesa's Current Report on Form 8-K/A, dated February 7,
1997;
5. Parker & Parsley's Annual Report on Forms 10-K and 10-K/A for the year
ended December 31, 1996;
6. Parker & Parsley's Current Report on Form 8-K, dated February 3, 1997;
7. Parker & Parsley's Quarterly Report on Form 10-Q for the period ended
March 31, 1997;
8. Parker & Parsley's Current Reports on Form 8-K, dated April 3, 1997,
July 28, 1997, and July 29, 1997;
9. Parker & Parsley's Quarterly Report on Form 10-Q for the period ended
June 30, 1997;
10. Parker & Parsley's Current Report on Form 8-K, dated April 6, 1997;
11. The Company's Registration Statement on Form S-4 (No. 333-26951)
filed on June 26, 1997, including any amendment or report for the
purpose of updating any such material;
12. The Company's Quarterly Report on Form 10-Q for the period ended June
30, 1997;
13. The Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1997;
2
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14. The Company's Current Report on Form 8-K, dated August 7, 1997;
15. The Company's Current Report on Form 8-K, dated September 3, 1997;
16. The Definitive Joint Management Information Circular and Proxy
Statement of the Company and Chauvco Resources Ltd. (File No.
001-13245) filed with the SEC on November 17, 1997, including any
amendment or report for the purpose of updating any such material;
17. The description of the Company's Common Stock contained in the
Company's Registration Statement on Forms 8-A and 8-A/A (File No.
001-13245), declared effective by the SEC on August 8, 1997; and
18. The Company's Current Report on Form 8-K, dated December 5, 1997.
All documents filed by the Company pursuant to Section 13(a), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of the filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
that also is or is deemed to be incorporated by reference herein or in any
Prospectus Supplement modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part of this
Prospectus, except as so modified or superseded.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, on the written or oral request of any
person, a copy of any or all of the documents referred to above that have been
or may be incorporated by reference into this Prospectus, other than exhibits
to the documents (unless the exhibits are specifically incorporated by
reference into the documents). Written or telephone request for the copies
should be directed to Corporate Secretary, Pioneer Natural Resources Company,
1400 Williams Square West, 5205 North O'Connor Boulevard, Irving, Texas 75039
(Telephone: (972) 444-9001).
THE COMPANY
The Company is one of the largest public independent oil and gas
companies in the United States, engaged principally in the acquisition,
development and production of, and exploration for, oil and gas reserves and
related activities.
The Company's executive offices and operating headquarters are located
at 1400 Williams Square West, 5205 North O'Connor Blvd., Irving, Texas 75039,
and its telephone number at those offices is (972) 444-9001.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement,
the net proceeds from the sale of Offered Securities will be used for general
corporate purposes, which may include repayment of indebtedness, redemption or
repurchase of securities of the Company or any subsidiary, additions to working
capital, and capital expenditures, including exploration, development and
acquisitions.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges and earnings to fixed charges and preferred stock
dividends (a) for each of 1996, 1995, 1994, 1993 and 1992, and for the nine
months ended September 30, 1997, on a historical basis, and (b) for 1996 and
the nine months ended September 30, 1997, on a pro forma basis after giving
effect to (i) the merger of Mesa with and into the Company, (ii) the merger of
Parker & Parsley with and into MESA Operating Co., a subsidiary of Mesa, and
(iii) the Company's acquisition of Chauvco Resources Ltd. ("Chauvco"), a
corporation organized under the laws of Alberta, Canada ("Chauvco
Transaction").
3
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<TABLE>
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NINE
MONTHS
ENDED YEAR ENDED DECEMBER 31
NINE MONTHS ENDED SEPTEMBER -------------------------------------------------------
SEPTEMBER 30, 1997 30, 1996 1996 1995 1994 1993 1992
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PRO FORMA PRO FORMA
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HISTORICAL COMBINED HISTORICAL COMBINED
---------- -------- ---------- ---------
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Ratio of earnings to fixed
charges(a) . . . . . . . 1.5 (b) 5.4 5.3 1.6 (b) (b) 3.0 2.9
Ratio of earnings to fixed
charges and preferred
stock dividends(c) . . . 1.5 (b) 5.4 5.3 1.6 (b) (b) 3.0 2.9
</TABLE>
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(a) For purposes of computing the ratio, earnings consist of income before
income taxes and cumulative effect of accounting change plus fixed
charges, net of preferred stock dividends of subsidiary and interest
capitalized, and fixed charges consist of interest expense, interest
capitalized, the portion of rental expense attributable to interest,
and preferred stock dividends of subsidiary.
(b) The ratio indicates a less than one-to-one coverage because the
earnings are inadequate to cover the fixed charges for the period.
Pro forma combined earnings for the nine months ended September 30,
1997, and the Company's historical earnings for the years ended
December 31, 1995 and 1994, were insufficient to cover its fixed
charges. The amounts of the deficiencies were $35.1 million, $150
million and $20.5 million, respectively.
(c) For purposes of computing the ratio, adjusted earnings consist of
income before income taxes and cumulative effect of accounting change
plus fixed charges and preferred stock dividends, net of preferred
stock dividends of subsidiary and interest capitalized, and fixed
charges and preferred stock dividends consist of interest expense,
interest capitalized, the portion of rental expense attributable to
interest, preferred stock dividends of subsidiary, and preferred stock
dividends. The dividends on the 6 1/4% Cumulative Guaranteed
Monthly Income Convertible Preferred Shares of Parker & Parsley
Capital LLC, a subsidiary of Parker & Parsley, were recorded as
interest expense for financial reporting purposes until those shares
were converted into common stock of Parker & Parsley on July 28,
1997.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets
forth certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which the
general provisions may apply to the Debt Securities so offered will be
described in the Prospectus Supplement relating to the Debt Securities.
Accordingly, for a description of the terms of a particular issue of Debt
Securities, reference must be made to both the Prospectus Supplement relating
thereto and to the following description.
The Debt Securities will be general obligations of the Company and may
be subordinated to Senior Indebtedness (as defined below) of the Company to the
extent set forth in the Prospectus Supplement relating thereto. See
"Description of Debt Securities -- Subordination." Debt Securities will be
issued under an indenture (the "Indenture"), between the Company and one or more
commercial banks to be selected as trustees (the trustee or trustees selected
are referred to collectively as the "Trustee"). A copy of the Indenture is filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
The Indenture will also be available for inspection at the corporate trust
office of the Trustee. The following discussion of certain provisions of the
Indenture is a summary only and does not purport to be a complete description of
the terms and provisions of the Indenture. Accordingly, the following discussion
is qualified in its entirety by reference to the provisions of the Indenture,
including the definition therein of terms used below with their initial letters
capitalized.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that can be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Debt Securities of the series with respect to which the Prospectus
Supplement is being delivered:
(a) The title of the Debt Securities of the series;
(b) Any limit on the aggregate principal amount of the Debt
Securities of the series that may be authenticated and delivered under the
Indenture;
(c) The date or dates on which the principal and premium with
respect to the Debt Securities of the series are payable;
(d) The rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest (if any) or the method of
determining the rate or rates, the date or dates from which the interest shall
accrue, the interest payment dates on which the interest shall be payable or the
method by which the dates will be determined, the record dates for the
determination of holders thereof to whom the interest is payable (in the case of
Registered Securities), and the basis upon which interest will be calculated if
other than that of a 360-day year of twelve 30-day months;
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(e) The place or places, if any, in addition to or instead of the
corporate trust office of the Trustee (in the case of Registered Securities) or
the principal London office of the Trustee (in the case of Bearer Securities),
where the principal, premium, and interest with respect to Debt Securities of
the series shall be payable;
(f) The price or prices at which, the period or periods within
which, and the terms and conditions upon which, Debt Securities of the series
may be redeemed, in whole or in part, at the option of the Company or
otherwise;
(g) Whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both and, if Bearer Securities
are to be issued, whether coupons will be attached thereto, whether Bearer
Securities of the series may be exchanged for Registered Securities of the
series, and the circumstances under which and the places at which any such
exchanges, if permitted, may be made;
(h) If any Debt Securities of the series are to be issued as
Bearer Securities or as one or more Global Securities (as defined below)
representing individual Bearer Securities of the series, whether certain
provisions for the payment of additional interest or tax redemptions shall
apply; whether interest with respect to any portion of a temporary Bearer
Security of the series payable with respect to any interest payment date prior
to the exchange of the temporary Bearer Security for definitive Bearer
Securities of the series shall be paid to any clearing organization with
respect to the portion of the temporary Bearer Security held for its account
and, in such event, the terms and conditions (including any certification
requirements) upon which any such interest payment received by a clearing
organization will be credited to the persons entitled to interest payable on
the interest payment date; and the terms upon which a temporary Bearer Security
may be exchanged for one or more definitive Bearer Securities of the series;
(i) The obligation, if any, of the Company to redeem, purchase or
repay Debt Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a holder thereof and the price or prices at
which, the period or periods within which, and the terms and conditions upon
which, Debt Securities of the series shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligations;
(j) The terms, if any, upon which the Debt Securities of the
series may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by Depositary Shares), other Debt Securities, or
warrants for Common Stock, Preferred Stock, or indebtedness or other securities
of any kind of the Company or any other issuer or obligor and the terms and
conditions upon which the conversion or exchange shall be effected, including
the initial conversion or exchange price or rate, the conversion or exchange
period, and any other additional provisions;
(k) If other than denominations of $1,000 or any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(l) If the amount of principal, premium or interest with respect
to the Debt Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which the amounts will be
determined;
(m) If the principal amount payable at the stated maturity of Debt
Securities of the series will not be determinable as of any one or more dates
prior to the stated maturity, the amount that will be deemed to be the
principal amount as of any date for any purpose, including the principal amount
thereof which will be due and payable upon any maturity other than the stated
maturity or which will be deemed to be outstanding as of any date (or, in any
such case, the manner in which the deemed principal amount is to be
determined), and if necessary, the manner of determining the equivalent thereof
in United States currency;
(n) Any changes or additions to the provisions of the Indenture
dealing with defeasance, including the addition of additional covenants that
may be subject to the Company's covenant defeasance option;
(o) If other than the coin or currency of the United States as at
the time of payment is legal tender for payment of public and private debts,
the coin or currency or currencies or units of two or more currencies in which
payment of the principal, premium, and interest with respect to Debt Securities
of the series shall be payable;
(p) If other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series that shall be payable upon
declaration of acceleration of the maturity thereof or provable in bankruptcy;
(q) The terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Debt Securities of the series of any properties,
assets, moneys, proceeds, securities, or other collateral, including whether
certain provisions of the Trust Indenture Act are applicable and any
corresponding changes to provisions of the Indenture as then in effect;
5
<PAGE> 8
(r) Any addition to or change in the Events of Default with
respect to the Debt Securities of the series and any change in the right of the
Trustee or the holders to declare the principal, premium and interest with
respect to the Debt Securities due and payable;
(s) If the Debt Securities of the series shall be issued in whole
or in part in the form of a Global Security, the terms and conditions, if any,
upon which the Global Security may be exchanged in whole or in part for other
individual Debt Securities in definitive registered form, the Depositary for
the Global Security, and the form of any legend or legends to be borne by the
Global Security in addition to or in lieu of the legend referred to in the
Indenture;
(t) Any Trustee, authenticating or paying agents, transfer agents
or registrars;
(u) The applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms then
set forth in the Indenture relating to permitted consolidations, mergers or
sales of assets, including conditioning any merger, conveyance, transfer or
lease permitted by the Indenture upon the satisfaction of an indebtedness
coverage standard by the Company and any successor to the Company;
(v) The terms, if any, of any guarantee of the payment of
principal, premium and interest with respect to Debt Securities of the series
and any corresponding changes to the provisions of the Indenture as then in
effect;
(w) The subordination, if any, of the Debt Securities of the
series pursuant to the Indenture and any changes or additions to the provisions
of the Indenture relating to subordination;
(x) With regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(y) Any other terms of the Debt Securities of the series (which
terms shall not be prohibited by the provisions of the Indenture).
The Prospectus Supplement will also describe any material United
States federal income tax consequences or other special considerations
applicable to the series of Debt Securities to which the Prospectus Supplement
relates, including those applicable to (a) Bearer Securities, (b) Debt
Securities with respect to which payments of principal, premium or interest are
determined with reference to an index or formula (including changes in prices
of particular securities, currencies or commodities), (c) Debt Securities with
respect to which principal, premium or interest is payable in a foreign or
composite currency, (d) Debt Securities that are issued at a discount below
their stated principal amount, bearing no interest or interest at a rate that
at the time of issuance is below market rates ("Original Issue Discount Debt
Securities"), and (e) variable rate Debt Securities that are exchangeable for
fixed rate Debt Securities.
Payments of interest on Registered Securities may be made at the
option of the Company by check mailed to the registered holders thereof or, if
so provided in the applicable Prospectus Supplement, at the option of a holder
by wire transfer to an account designated by the holder. Except as otherwise
provided in the applicable Prospectus Supplement, no payment on a Bearer
Security will be made by mail to an address in the United States or by wire
transfer to an account in the United States.
Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities may be transferred or exchanged at the office of the
Trustee at which its corporate trust business is principally administered in
the United States or at the office of the Trustee or the Trustee's agent in the
Borough of Manhattan, the City and State of New York, at which its corporate
agency business is conducted, subject to the limitations provided in the
Indenture, without the payment of any service charge, other than any tax or
governmental charge payable in connection therewith. Bearer Securities will be
transferable only by delivery. Provisions with respect to the exchange of
Bearer Securities will be described in the Prospectus Supplement relating to
the Bearer Securities.
All funds paid by the Company to a paying agent for the payment of
principal, premium, or interest with respect to any Debt Securities that remain
unclaimed at the end of two years after the principal, premium, or interest
shall have become due and payable will be repaid to the Company, and the
holders of the Debt Securities or any coupons appertaining thereto will
thereafter look only to the Company for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities. A Global Security is a Debt
Security that represents, and is denominated in an amount equal to, the
aggregate principal amount of all outstanding Debt Securities of a series, or
any portion thereof, in either case having the same terms, including the same
original issue date, date or dates on which principal and interest are due, and
interest rate or method of determining interest. A Global Security will be
deposited with, or on behalf of, a Depositary, which will be identified in the
Prospectus Supplement relating
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to the Debt Securities. Global Securities may be issued in either registered or
bearer form and in either temporary or definitive form. Unless and until it is
exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to
the Depositary or another nominee of the Depositary, or by the Depositary or
any nominee of the Depositary to a successor Depositary or any nominee of the
successor.
The specific terms of the depositary arrangement with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to the Debt Securities. The Company anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for the Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Debt Securities represented by
the Global Security to the accounts of persons that have accounts with the
Depositary ("participants"). The accounts shall be designated by the dealers or
underwriters with respect to the Debt Securities or, if the Debt Securities are
offered and sold directly by the Company or through one or more agents, by the
Company or the agents. Ownership of beneficial interests in a Global Security
will be limited to participants or persons that hold beneficial interests
through participants. Ownership of beneficial interests in the Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depositary (with respect to interests of
participants) or records maintained by participants (with respect to interests
of persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of the securities in
definitive form. Such limitations and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is
the registered owner or holder of the Global Security, the Depositary or
nominee, as the case may be, will be considered the sole owner or holder of the
individual Debt Securities represented by the Global Security for all purposes
under the Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Debt
Securities represented by the Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any of the Debt
Securities in definitive form, and will not be considered the owners or holders
thereof under the Indenture.
Subject to the restrictions described under "Description of Debt
Securities--Limitations on Issuance of Bearer Securities," payments of
principal, premium and interest with respect to individual Debt Securities
represented by a Global Security will be made to the Depositary or its nominee,
as the case may be, as the registered owner or holder of the Global Security.
Neither the Company, the Trustee, any paying agent or registrar for the Debt
Securities, or any agent of the Company or the Trustee will have any
responsibility or liability for (a) any aspect of the records relating to or
payments made by the Depositary, its nominee, or any participants on account of
beneficial interests in the Global Security or for maintaining, supervising or
reviewing any records relating to the beneficial interests, (b) the payment to
the owners of beneficial interests in the Global Security of amounts paid to
the Depositary or its nominee, or (c) any other matter relating to the actions
and practices of the Depositary, its nominee or its participants. Neither the
Company, the Trustee, any paying agent or registrar for the Debt Securities,
nor any agent of the Company or the Trustee will be liable for any delay by the
Depositary, its nominee or any of its participants in identifying the owners of
beneficial interests in the Global Security, and the Company and the Trustee
may conclusively rely on, and will be protected in relying on, instructions
from the Depositary or its nominee for all purposes.
The Company expects that the Depositary for a series of Debt
Securities or its nominee, upon receipt of any payment of principal, premium or
interest with respect to a definitive Global Security representing any of the
Debt Securities, will immediately credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of the Global Security, as shown on the records of the
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in the Global Security held
through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers and registered in street name. The payments will be the
responsibility of the participants. Receipt by owners of beneficial interests
in a temporary Global Security of payments of principal, premium or interest
with respect thereto will be subject to the restrictions described under
"Description of Debt Securities--Limitations on Issuance of Bearer Securities."
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary, the Company shall
appoint a successor depositary. If a successor depositary is not appointed by
the Company within 90 days, the Company will issue individual Debt Securities
of the series in exchange for the Global Security representing the series of
Debt Securities. In addition, the Company may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to the Debt Securities, determine no longer to have Debt Securities of
a series represented by a Global Security and, in that event, will issue
individual Debt Securities of the series in exchange for the Global Security
representing the series of Debt Securities. Furthermore, if the Company so
specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of the
series may, on terms acceptable to the Company, the Trustee, and the Depositary
for the Global Security, receive individual Debt Securities of the series in
exchange for the beneficial interests, subject to any limitations described in
the Prospectus Supplement relating to the Debt Securities. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of
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individual Debt Securities of the series represented by the Global Security
equal in principal amount to the beneficial interest and to have the Debt
Securities registered in its name (if the Debt Securities are issuable as
Registered Securities). Individual Debt Securities of the series so issued will
be issued (a) as Registered Securities in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof if the Debt
Securities are issuable as Registered Securities, (b) as Bearer Securities in
the denomination or denominations specified by the Company if the Debt
Securities are issuable as Bearer Securities, or (c) as either Registered
Securities or Bearer Securities as described above if the Debt Securities are
issuable in either form. See, however, "Description of Debt
Securities--Limitations on Issuance of Bearer Securities" for a description of
certain restrictions on the issuance of individual Bearer Securities in
exchange for beneficial interests in a bearer Global Security.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
The Debt Securities of a series may be issued as Registered Securities
(which will be registered as to principal and interest in the register
maintained by the registrar for the Debt Securities) or Bearer Securities
(which will be transferable only by delivery). If the Debt Securities are
issuable as Bearer Securities, certain special limitations and considerations
will apply.
In compliance with United States federal income tax laws and
regulations, the Company and any underwriter, agent or dealer participating in
an offering of Bearer Securities will agree that, in connection with the
original issuance of the Bearer Securities and during the period ending 40 days
after the issue date, they will not offer, sell or deliver any such Bearer
Security, directly or indirectly, to a United States Person (as defined below)
or to any person within the United States, except to the extent permitted under
United States Treasury regulations.
Bearer Securities will bear a legend to the following effect: "Any
United States person who holds this obligation will be subject to limitations
under the United States federal income tax laws, including the limitations
provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." The
sections referred to in the legend provide that, with certain exceptions, a
United States taxpayer who holds Bearer Securities will not be allowed to
deduct any loss with respect to, and will not be eligible for capital gain
treatment with respect to any gain realized on the sale, exchange, redemption
or other disposition of, the Bearer Securities.
For this purpose, "United States" includes the United States of
America and its possessions, and "United States person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States, or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
Pending the availability of a definitive Global Security or individual
Bearer Securities, as the case may be, Debt Securities that are issuable as
Bearer Securities may initially be represented by a single temporary Global
Security, without interest coupons, to be deposited with a common depositary in
London for Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of the Euroclear System ("Euroclear"), or Centrale de Livraison de
Valeurs Mobilieres S.A. ("CEDEL") for credit to the accounts designated by or
on behalf of the purchasers thereof. Following the availability of a definitive
Global Security in bearer form, without coupons attached, or individual Bearer
Securities and subject to any further limitations described in the applicable
Prospectus Supplement, the temporary Global Security will be exchangeable for
interests in the definitive Global Security or for the individual Bearer
Securities, respectively, only upon receipt of a "Certificate of Non-U.S.
Beneficial Ownership," which is a certificate to the effect that a beneficial
interest in a temporary Global Security is owned by a person that is not a
United States Person or is owned by or through a financial institution in
compliance with applicable United States Treasury regulations. No Bearer
Security will be delivered in or to the United States. If so specified in the
applicable Prospectus Supplement, interest on a temporary Global Security will
be paid to each of Euroclear and CEDEL with respect to that portion of the
temporary Global Security held for its account, but only upon receipt as of the
relevant interest payment date of a Certificate of Non-U.S. Beneficial
Ownership.
SUBORDINATION
Debt Securities of a series may be subordinated ("Subordinated Debt
Securities") to Senior Indebtedness (as defined below) to the extent set forth
in the Prospectus Supplement relating thereto. The Company currently conducts
substantially all its operations through subsidiaries, and the holders of Debt
Securities (whether or not Subordinated Debt Securities) will be structurally
subordinated to the creditors of the Company's subsidiaries.
Subordinated Debt Securities of a series and any coupons appertaining
thereto will be subordinate in right of payment, to the extent and in the
manner set forth in the Indenture and the Prospectus Supplement relating to the
Subordinated Debt Securities, to the prior payment of all indebtedness of the
Company that is designated as "Senior Indebtedness" with respect to the series.
"Senior Indebtedness," with respect to any series of Subordinated Debt
Securities, will consist of (a) any and all amounts payable under or with
respect to the Company's "Bank Indebtedness" and (b) any other indebtedness of
the Company that is designated in a resolution of the Company's Board of
Directors or in any supplemental indenture establishing any other series as
Senior Indebtedness with respect to the series. "Bank Indebtedness" is defined
as (i) the Credit Facility Agreement
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(Primary Facility), dated as of August 7, 1997, between Pioneer Natural
Resources USA, Inc. ("Pioneer USA"), as Borrower, and NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, and the Co-Agents and Lenders party thereto and
(ii) the Credit Facility Agreement (364 Day Facility), dated as of August 7,
1997, between Pioneer USA, as Borrower, and NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, and the Co-Agents and Lenders party thereto, each as amended
or modified from time to time, and each of which is incorporated by reference
as an exhibit to the Registration Statement of which this Prospectus is a part.
Upon any payment or distribution of assets of the Company to creditors
or upon a total or partial liquidation or dissolution of the Company or in a
bankruptcy, receivership or similar proceeding relating to the Company or its
property, holders of Senior Indebtedness shall be entitled to receive payment
in full in cash of the Senior Indebtedness before holders of Subordinated Debt
Securities shall be entitled to receive any payment of principal, premium or
interest with respect to the Subordinated Debt Securities, and until the Senior
Indebtedness is paid in full, any distribution to which holders of Subordinated
Debt Securities would otherwise be entitled shall be made to the holders of
Senior Indebtedness (except that the holders may receive shares of stock and
any debt securities that are subordinated to Senior Indebtedness to at least
the same extent as the Subordinated Debt Securities).
The Company may not make any payments of principal, premium or
interest with respect to Subordinated Debt Securities, make any deposit for the
purpose of defeasance of the Subordinated Debt Securities, or repurchase,
redeem or otherwise retire (except, in the case of Subordinated Debt Securities
that provide for a mandatory sinking fund, by the delivery of Subordinated Debt
Securities by the Company to the Trustee in satisfaction of the Company's
sinking fund obligation) any Subordinated Debt Securities if (a) any principal,
premium or interest with respect to Senior Indebtedness is not paid within any
applicable grace period (including at maturity), or (b) any other default on
Senior Indebtedness occurs and the maturity of the Senior Indebtedness is
accelerated in accordance with its terms, unless, in either case, the default
has been cured or waived and the acceleration has been rescinded, the Senior
Indebtedness has been paid in full in cash, or the Company and the Trustee
receive written notice approving the payment from the representatives of each
issue of "Designated Senior Indebtedness" (which will include the Bank
Indebtedness and any other specified issue of Senior Indebtedness of at least
$100 million). During the continuance of any default (other than a default
described in clause (a) or (b) above) with respect to any Senior Indebtedness
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect the
acceleration) or the expiration of any applicable grace periods, the Company
may not pay the Subordinated Debt Securities for a period (the "Payment
Blockage Period") commencing on the receipt by the Company and the Trustee of
written notice of the default from the representative of any Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period (a
"Blockage Notice"). The Payment Blockage Period may be terminated before its
expiration by written notice to the Trustee and the Company from the person who
gave the Blockage Notice, by repayment in full in cash of the Senior
Indebtedness with respect to which the Blockage Notice was given, or because
the default giving rise to the Payment Blockage Period is no longer continuing.
Unless the holders of the Senior Indebtedness shall have accelerated the
maturity thereof, the Company may resume payments on the Subordinated Debt
Securities after the expiration of the Payment Blockage Period. Not more than
one Blockage Notice may be given in any period of 360 consecutive days unless
the first Blockage Notice within the 360-day period is given by or on behalf of
holders of Designated Senior Indebtedness other than the Bank Indebtedness, in
which case, the representative of the Bank Indebtedness may give another
Blockage Notice within the period. In no event, however, 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 period of 360 consecutive days. After all
Senior Indebtedness is paid in full and until the Subordinated Debt Securities
are paid in full, holders of the Subordinated Debt Securities shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness.
By reason of the subordination, in the event of insolvency, creditors
of the Company who are holders of Senior Indebtedness, as well as certain
general creditors of the Company, may recover more, ratably, than the holders
of the Subordinated Debt Securities.
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of
Default" with respect to a series of Debt Securities:
(a) Default in the payment of any installment of interest
on any Debt Securities of that series or any payment with respect to
the related coupons, if any, as and when the same shall become due and
payable (whether or not, in the case of Subordinated Debt Securities,
the payment shall be prohibited by reason of the subordination
provisions described above) and continuance of the default for a
period of 30 days;
(b) Default in the payment of principal or premium with
respect to any Debt Securities of that series as and when the same
shall become due and payable, whether at maturity, upon redemption, by
declaration, upon required
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repurchase or otherwise (whether or not, in the case of Subordinated
Debt Securities, the payment shall be prohibited by reason of the
subordination provisions described above);
(c) Default in the payment of any sinking fund payment
with respect to any Debt Securities of that series as and when the
same shall become due and payable;
(d) Failure on the part of the Company to comply with the
provisions of the Indenture relating to consolidations, mergers, and
sales of assets;
(e) Failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Debt Securities of that series, in any resolution of
the Board of Directors of the Company authorizing the issuance of that
series of Debt Securities, in the Indenture with respect to the
series, or in any supplemental indenture with respect to the series
(other than a covenant a default in the performance of which is
otherwise specifically dealt with) continuing for a period of 60 days
after the date on which written notice specifying the failure and
requiring the Company to remedy the same shall have been given to the
Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in aggregate principal amount of the Debt
Securities of that series at the time outstanding;
(f) Indebtedness of the Company or any subsidiary of the
Company is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a
default, the total amount of the Indebtedness unpaid or accelerated
exceeds $20 million, and the default remains uncured or the
acceleration is not rescinded for 10 days after the date on which
written notice specifying the failure and requiring the Company to
remedy the same shall have been given to the Company by the Trustee or
to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at
the time outstanding;
(g) The Company or any of its "Significant Subsidiaries"
(defined as any subsidiary of the Company that would be a "significant
subsidiary" as defined in Rule 405 under the Securities Act as in
effect on the date of the Indenture) shall (1) voluntarily commence
any proceeding or file any petition seeking relief under the United
States Bankruptcy Code or other federal or state bankruptcy,
insolvency or similar law, (2) consent to the institution of, or fail
to controvert within the time and in the manner prescribed by law, any
such proceeding or the filing of any such petition, (3) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the Company or any Significant
Subsidiary or for a substantial part of its property, (4) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (5) make a general assignment for the
benefit of creditors, (6) admit in writing its inability or fail
generally to pay its debts as they become due, (7) take corporate
action for the purpose of effecting any of the foregoing, or (8) take
any comparable action under any foreign laws relating to insolvency;
(h) The entry of an order or decree by a court having
competent jurisdiction for (1) relief with respect to the Company or
any of its Significant Subsidiaries or a substantial part of any of
their property under the United States Bankruptcy Code or any other
federal or state bankruptcy, insolvency or similar law, (2) the
appointment of a receiver, trustee, custodian, sequestrator or similar
official for the Company or any Significant Subsidiary or for a
substantial part of any of their property (except, any decree or order
appointing the official of any Significant Subsidiary pursuant to a
plan under which the assets and operations of the Significant
Subsidiary are transferred to or combined with another Significant
Subsidiary or Subsidiaries of the Company or to the Company), or (3)
the winding-up or liquidation of the Company or any Significant
Subsidiary (except any decree or order approving or ordering the
winding-up or liquidation of the affairs of a Significant Subsidiary
pursuant to a plan under which the assets and operations of the
Significant Subsidiary are transferred to or combined with another
Significant Subsidiary or Subsidiaries of the Company or to the
Company), and the order or decree shall continue unstayed and in
effect for 60 consecutive days, or any similar relief is granted under
any foreign laws and the order or decree stays in effect for 60
consecutive days;
(i) Any judgment or decree for the payment of money in
excess of $20 million is entered against the Company or any subsidiary
of the Company by a court of competent jurisdiction, which judgment is
not covered by insurance, and is not discharged and either (1) an
enforcement proceeding has been commenced by any creditor upon the
judgment or decree, or (2) there is a period of 60 days following the
entry of the judgment or decree during which the judgment or decree is
not discharged or waived or the execution thereof stayed and, in
either case, the default continues for 10 days after the date on which
written notice specifying the failure and requiring the Company to
remedy the same shall have been given to the Company by the Trustee or
to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at
the time outstanding; or
(j) Any other Event of Default provided with respect to
Debt Securities of that series.
An Event of Default with respect to one series of Debt Securities is
not necessarily an Event of Default for another series.
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If an Event of Default described in clause (a), (b), (c), (d), (e),
(f), (i) or (j) above occurs and is continuing with respect to any series of
Debt Securities, unless the principal and interest with respect to all the Debt
Securities of the series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of
the Debt Securities of the series then outstanding may declare the principal
amount (or, if Original Issue Discount Debt Securities, the portion of the
principal amount as may be specified in the series) of and interest on all the
Debt Securities of the series due and payable immediately. If an Event of
Default described in clause (g) or (h) above occurs, unless the principal and
interest with respect to all the Debt Securities of all series shall have
become due and payable, the principal amount (or, if Original Issue Discount
Debt Securities, the portion of the principal amount as may be specified in the
series) of and interest on all Debt Securities of all series then outstanding
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any holder of Debt Securities.
If an Event of Default occurs and is continuing, the Trustee shall be
entitled and empowered to institute any action or proceeding for the collection
of the sums so due and unpaid or to enforce the performance of any provision of
the Debt Securities of the affected series or the Indenture, to prosecute any
such action or proceeding to judgment or final decree, and to enforce any
judgment or final decree against the Company or any other obligor on the Debt
Securities of the series. In addition, if there shall be pending proceedings
for the bankruptcy or reorganization of the Company or any other obligor on the
Debt Securities, or if a receiver, trustee, or similar official shall have been
appointed for its property, the Trustee shall be entitled and empowered to file
and prove a claim for the whole amount of principal, premium and interest (or,
in the case of Original Issue Discount Debt Securities, the portion of the
principal amount as may be specified in the terms of the series) owing and
unpaid with respect to the Debt Securities. No holder of any Debt Security or
coupon of any series shall have any right to institute any action or proceeding
upon or under or with respect to the Indenture, for the appointment of a
receiver or trustee, or for any other remedy, unless (a) the holder previously
shall have given to the Trustee written notice of an Event of Default with
respect to Debt Securities of that series and of the continuance thereof, (b)
the holders of not less than 25% in aggregate principal amount of the
outstanding Debt Securities of that series shall have made written request to
the Trustee to institute the action or proceeding with respect to the Event of
Default and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and (c) the Trustee, for 60 days after its receipt of such notice,
request, and offer of indemnity shall have failed to institute the action or
proceeding and no direction inconsistent with the written request shall have
been given to the Trustee pursuant to the provisions of the Indenture.
Prior to the acceleration of the maturity of the Debt Securities of
any series, the holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may, on behalf of the holders
of all Debt Securities and any related coupons of that series, waive any past
default or Event of Default and its consequences for that series, except (a) a
default in the payment of the principal, premium or interest with respect to
the Debt Securities, or (b) a default with respect to a provision of the
Indenture that cannot be amended without the consent of each holder affected
thereby. In case of any waiver, the default shall cease to exist, any Event of
Default arising therefrom shall be deemed to have been cured for all purposes,
and the Company, the Trustee and the holders of the Debt Securities of that
series shall be restored to their former positions and rights under the
Indenture.
The Trustee shall, within 90 days after the occurrence of a default
known to it with respect to a series of Debt Securities, give to the holders of
the Debt Securities of the series notice of all uncured defaults with respect
to the series known to it, unless the defaults shall have been cured or waived
before the giving of the notice; provided, however, that except in the case of
default in the payment of principal, premium, or interest with respect to the
Debt Securities of the series or in the making of any sinking fund payment with
respect to the Debt Securities of the series, the Trustee shall be protected in
withholding notice if it in good faith determines that the withholding of such
notice is in the interest of the holders of the Debt Securities.
MODIFICATION OF THE INDENTURE
The Company and the Trustee may enter into supplemental indentures
without the consent of the holders of Debt Securities for one or more of the
following purposes:
(a) To evidence the succession of another person to the
Company pursuant to the provisions of the Indenture to
consolidations, mergers and sales of assets and the assumption by the
successor of the covenants, agreements, and obligations of the Company
in the Indenture and in the Debt Securities;
(b) To surrender any right or power conferred upon the
Company by the Indenture, to add to the covenants of the Company such
further covenants, restrictions, conditions, or provisions for the
protection of the holders of all or any series of Debt Securities as
the Board of Directors of the Company shall consider to be for the
protection of the holders of the Debt Securities, and to make the
occurrence, or the occurrence and continuance, of a default in any of
the additional covenants, restrictions, conditions or provisions a
default or an Event of Default under the Indenture (provided, however,
that with respect to any such additional covenant, restriction,
condition or provision, the supplemental indenture may provide for a
period of grace after default, which may be shorter or longer than
that allowed in the case of other defaults, may provide
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<PAGE> 14
for an immediate enforcement upon the default, may limit the remedies
available to the Trustee upon the default, or may limit the right of
holders of a majority in aggregate principal amount of any or all
series of Debt Securities to waive the default);
(c) To cure any ambiguity or to correct or supplement any
provision contained in the Indenture, in any supplemental indenture,
or in any Debt Securities that may be defective or inconsistent with
any other provision contained therein, to convey, transfer, assign,
mortgage or pledge any property to or with the Trustee, or to make
such other provisions in regard to matters or questions arising under
the Indenture as shall not adversely affect the interests of any
holders of Debt Securities of any series;
(d) To modify or amend the Indenture in such a manner as
to permit the qualification of the Indenture or any supplemental
indenture under the Trust Indenture Act as then in effect;
(e) To add to or change any of the provisions of the
Indenture to provide that Bearer Securities may be registerable as to
principal, to change or eliminate any restrictions on the payment of
principal or premium with respect to Registered Securities or of
principal, premium or interest with respect to Bearer Securities, or
to permit Registered Securities to be exchanged for Bearer Securities,
so long as any such action does not adversely affect the interests of
the holders of Debt Securities or any coupons of any series in any
material respect or permit or facilitate the issuance of Debt
Securities of any series in uncertificated form;
(f) To comply with the provisions of the Indenture to
consolidations, mergers, and sales of assets;
(g) In the case of Subordinated Debt Securities, to make
any change in the provisions of the Indenture to subordination that
would limit or terminate the benefits available to any holder of
Senior Indebtedness under such provisions (but only if the holder of
Senior Indebtedness consents to the change);
(h) To add guarantees with respect to the Debt Securities
or to secure the Debt Securities;
(i) To make any change that does not adversely affect the
rights of any holder;
(j) To add to, change or eliminate any of the provisions
of the Indenture with respect to one or more series of Debt
Securities, so long as any such addition, change or elimination not
otherwise permitted under the Indenture shall (1) neither apply to any
Debt Security of any series created prior to the execution of the
supplemental indenture and entitled to the benefit of the provision
nor modify the rights of the holders of any Debt Security with respect
to the provision, or (2) become effective only when there is no Debt
Security outstanding;
(k) To evidence and provide for the acceptance of
appointment by a successor or separate Trustee with respect to the
Debt Securities of one or more series and to add to or change any of
the provisions of the Indenture as shall be necessary to provide for
or facilitate the administration of the Indenture by more than one
Trustee; and
(l) To establish the form or terms of Debt Securities and
coupons of any series, as described under "Description of Debt
Securities--General."
With the consent of the holders of a majority in aggregate principal
amount of the outstanding Debt Securities of each series affected thereby, the
Company and the Trustee may from time to time and at any time enter into a
supplemental indenture for the purpose of adding any provisions to, changing in
any manner, or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Debt Securities of the series; provided, however, that without the consent
of the holders of each Debt Security so affected, no such supplemental
indenture shall (a) reduce the percentage in principal amount of Debt
Securities of any series whose holders must consent to an amendment, (b) reduce
the rate of or extend the time for payment of interest on any Debt Security or
coupon or reduce the amount of any payment to be made with respect to any
coupon, (c) reduce the principal of or extend the stated maturity of any Debt
Security, (d) reduce the premium payable upon the redemption of any Debt
Security or change the time at which any Debt Security may or shall be
redeemed, (e) make any Debt Security payable in a currency other than that
stated in the Debt Security, (f) in the case of any Subordinated Debt Security
or coupons appertaining thereto, make any change in the provisions of the
Indenture to subordination that adversely affects the rights of any holder
under the provisions, (g) release any security that may have been granted with
respect to the Debt Securities, (h) make any change in the provisions of the
Indenture to waivers of defaults or amendments that require unanimous consent,
(i) change any obligation of the Company provided for in the Indenture to pay
additional interest with respect to Bearer Securities, or (j) limit the
obligation of the Company to maintain a paying agency outside the United States
for payment on Bearer Securities or limit the obligation of the Company to
redeem certain Bearer Securities.
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<PAGE> 15
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any person,
or convey, transfer or lease all or substantially all its assets, unless the
following conditions have been satisfied:
(a) Either (1) the Company shall be the continuing person
in the case of a merger, or (2) the resulting, surviving or transferee
person, if other than the Company (the "Successor Company"), shall be
a corporation organized and existing under the laws of the United
States, any State, or the District of Columbia and shall expressly
assume all the obligations of the Company under the Debt Securities
and coupons and the Indenture;
(b) Immediately after giving effect to the transaction
(and treating any indebtedness that becomes an obligation of the
Successor Company or any subsidiary of the Company as a result of the
transaction as having been incurred by the Successor Company or the
subsidiary at the time of the transaction), no Default or Event of
Default would occur or be continuing;
(c) The Successor Company waives any right to redeem any
Bearer Security under circumstances in which the Successor Company
would be entitled to redeem the Bearer Security but the Company would
not have been so entitled to redeem if the consolidation, merger,
conveyance, transfer or lease had not occurred; and
(d) The Company shall have delivered to the Trustee an
officers' certificate and an opinion of counsel, each stating that the
consolidation, merger or transfer complies with the Indenture.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with
respect to a series of Debt Securities if (a) the Company has delivered to the
Trustee for cancellation all Debt Securities of the series (with certain
limited exceptions), or (b) all Debt Securities and coupons of the series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year, and the Company shall have
deposited with the Trustee as trust funds the entire amount sufficient to pay
at maturity or upon redemption all the Debt Securities and coupons (and if, in
either case, the Company shall also pay or cause to be paid all other sums
payable under the Indenture by the Company).
In addition, the Company shall have a "legal defeasance option"
(pursuant to which it may terminate, with respect to the Debt Securities of a
particular series, all its obligations under the Debt Securities and the
Indenture with respect to the Debt Securities) and a "covenant defeasance
option" (pursuant to which it may terminate, with respect to the Debt
Securities of a particular series, its obligations with respect to the Debt
Securities under certain specified covenants contained in the Indenture). If
the Company exercises its legal defeasance option with respect to a series of
Debt Securities, payment of the Debt Securities may not be accelerated because
of an Event of Default. If the Company exercises its covenant defeasance option
with respect to a series of Debt Securities, payment of the Debt Securities may
not be accelerated because of an Event of Default related to the specified
covenants.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series only if (a)
the Company irrevocably deposits in trust with the Trustee cash or U.S
Government Obligations (as defined in the Indenture) for the payment of
principal, premium, and interest with respect to the Debt Securities to
maturity or redemption, as the case may be, (b) 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 the principal,
premium and interest when due with respect to all the Debt Securities of the
series to maturity or redemption, as the case may be, (c) 123 days pass after
the deposit is made and during the 123-day period no default described in
clause (g) or (h) under "Description of Debt Securities--Events of Default and
Remedies" with respect to the Company occurs that is continuing at the end of
the period, (d) no Default has occurred and is continuing on the date of the
deposit and after giving effect thereto, (e) the deposit does not constitute a
default under any other agreement binding on the Company and, in the case of
Subordinated Debt Securities, is not prohibited by the provisions of the
Indenture to subordination, (f) 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, (g) the Company shall have delivered to the
Trustee an opinion of counsel addressing certain federal income tax matters to
the defeasance, and (h) 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 Debt Securities of the series
as contemplated by the Indenture have been complied with.
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<PAGE> 16
The Trustee shall hold in trust cash or U.S. Government Obligations
deposited with it as described above and shall apply the deposited cash and the
proceeds from deposited U.S. Government Obligations to the payment of
principal, premium, and interest with respect to the Debt Securities and
coupons of the defeased series. In the case of Subordinated Debt Securities and
coupons related thereto, the money and U.S. Government Obligations so held in
trust will not be subject to the subordination provisions of the Indenture.
THE TRUSTEE
The Company may appoint a separate Trustee for any series of Debt
Securities. As used herein in the description of a series of Debt Securities,
the term "Trustee" refers to the Trustee appointed with respect to the series
of Debt Securities.
The Company may maintain banking and other commercial relationships
with the Trustee and its affiliates in the ordinary course of business, and the
Trustee may own Debt Securities.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 500,000,000
shares of common stock, par value $.01 per share ("Common Stock"), and
100,000,000 shares of preferred stock, par value $.01 per share ("Preferred
Stock"), of which one share has been designated as Special Preferred Voting
Stock.
COMMON STOCK
All shares of Common Stock issued under the Registration Statement of
which this Prospectus is a part will be fully paid and nonassessable. The
holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of common stockholders. The Common Stock does not
have cumulative voting rights. Shares of Common Stock have no preemptive
rights, conversion rights, redemption rights or sinking fund provisions. The
Common Stock is not subject to redemption by the Company.
Subject to the rights of the holders of any class of capital stock of
the Company having any preference or priority over the Common Stock, the
holders of Common Stock are entitled to dividends in such amounts as may be
declared by the Board of Directors from time to time out of funds legally
available for such payments and, in the event of liquidation, to share ratably
in any assets of the Company remaining after payment in full of all creditors
and provision for any liquidation preferences on any outstanding preferred
stock ranking prior to the Common Stock.
PREFERRED STOCK
The Board of Directors, without further stockholder action, is
authorized to issue up to 100,000,000 shares of Preferred Stock in one or more
series and to fix and determine as to any series all the relative rights and
preferences of shares in the series, including voting rights, dividend rights,
liquidation preferences, terms of redemption and conversion rights.
Special Preferred Voting Stock
In connection with the Company's acquisition of Chauvco Resources
Ltd., an Alberta, Canada corporation (the "Chauvco Transaction"), the Board of
Directors has designated one share of the 100,000,000 authorized shares of
Preferred Stock as Special Preferred Voting Stock (the "Voting Share"). The
Montreal Trust Company of Canada, or any successor thereto (for purposes of
this discussion, the "Share Trustee"), shall hold the Voting Share as trustee
for and on behalf of, and for the use and benefit of, the holders of
exchangeable shares (the "Exchangeable Shares") of Pioneer Natural Resources
(Canada) Ltd., an indirectly-owned subsidiary of the Company ("Pioneer
Canada"), and in accordance with the Voting and Exchange Trust Agreement
described in "Description of Capital Stock--Pioneer Canada Exchangeable
Shares." The Certificate of Designations for the Voting Share includes the
following principal terms:
Dividends. No dividend shall be paid to the Share Trustee as the
holder of the Voting Share.
Voting Rights. The Share Trustee, as the holder of record of the
Voting Share, shall be entitled to all of the voting rights attached to the
Voting Share, including the right to consent to or vote in person or by proxy
the Voting Share, on any matter, question or proposition whatsoever that may
properly come before the stockholders of the Company at a meeting thereof or
with respect to any written consent sought by the Company from its
stockholders. For each Exchangeable Share owned of record on the relevant
record date, the holder thereof shall be entitled to instruct the Share Trustee
to cast and exercise, in the manner instructed, a number of votes (including
for purposes of a quorum) equal to the number of votes to which a holder of one
share of Common Stock is entitled with respect to any matter, proposition or
question on which the holders of Common Stock are entitled to vote.
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<PAGE> 17
Except as otherwise described herein or required by law, the holder of the
Voting Share will vote together with the Common Stock as a single class and not
as a separate class or series apart therefrom, including any vote to approve or
adopt: (i) any plan of merger, consolidation or share exchange for which
Delaware law requires a stockholder vote; (ii) any disposition of assets for
which Delaware law requires a stockholder vote; and (iii) any dissolution of
the Company for which Delaware law requires a stockholder vote.
The holders of Exchangeable Shares have the right to submit stockholder
proposals to the Trustee and the Trustee has agreed pursuant to the Voting and
Exchange Trust Agreement to submit any such proposals to the Company. Such
stockholder proposals may be considered at any meeting of the Company at which
the holders of Common Stock of the Company are entitled to submit stockholder
proposals. The Company has agreed pursuant to the Voting and Exchange Trust
Agreement to accept all stockholder proposals submitted by the Trustee provided
that not more than one proposal is submitted by the Trustee on behalf of any
one holder of Exchangeable Shares.
So long as any Exchangeable Shares are outstanding, the number of
shares comprising the Special Preferred Voting Stock will not be increased or
decreased, and no other term of the Special Preferred Voting Stock may be
amended, except upon the approval of the holder of the Voting Share.
Conversion. The Voting Share is not convertible into any other class
or series of the capital stock of the Company or into cash, property or other
rights.
Redemption. The Voting Share may not be redeemed, except when no
Exchangeable Shares are outstanding, in which case the Voting Share will be
automatically redeemed. The redemption price due and payable upon the automatic
redemption will be $1.00. The Voting Share will be deemed retired and will be
canceled upon any purchase or other acquisition thereof by the Company. After
cancellation, the Voting Share may not be reissued or otherwise disposed of by
the Company.
Liquidation. The Voting Share will rank prior to each share of Common
Stock with respect to the distribution of assets upon a liquidation,
dissolution or winding-up of the Company. In the event of any such liquidation,
dissolution or winding-up, the holder of the Voting Share will be entitled to
receive a liquidation preference of $1.00 before any distribution to the
holders of Common Stock, but only after the liquidation preference of any other
shares of preferred stock of the Company has been paid in full.
Certain Covenants of the Company. For so long as the Voting Share is
outstanding, the Company will (i) fully comply with all terms of the
Exchangeable Shares and with all associated contractual obligations of the
Company, and (ii) not amend, alter or repeal the terms and conditions of the
Special Preferred Voting Stock, except with the approval of the holder of the
Voting Share.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
The Company's Board of Directors is divided into three classes. The
directors of each class are elected for three-year terms, with the terms of the
three classes staggered so that directors from a single class are elected at
each annual meeting of stockholders. Stockholders may remove a director only
for cause. In general, the Board of Directors, not the stockholders, has the
right to appoint persons to fill vacancies on the Board of Directors.
The Amended and Restated Certificate of Incorporation of the Company
(the "Restated Certificate") contains a "fair price" provision that requires
the affirmative vote of the holders of least 80% of the Company's voting stock
and the affirmative vote of at least 66 2/3% of the Company's voting stock not
owned, directly or indirectly, by a Related Person (as defined below) to
approve any merger, consolidation, sale or lease of all or substantially all of
the Company's assets, or certain other transactions involving a Related Person.
For purposes of this fair price provision, a "Related Person" is any person
beneficially owning 10% or more of the voting power of the outstanding capital
stock of the Company who is a party to the transaction at issue. The voting
requirement is not applicable to certain transactions, including those that are
approved by the Continuing Directors (as defined in the Restated Certificate)
or that meet certain "fair price" criteria contained in the Restated
Certificate.
The Restated Certificate further provides that stockholders may act
only at annual or special meetings of stockholders and not by written consent,
that special meetings of stockholders may be called only by the Board of
Directors, and that only business proposed by the Board of Directors may be
considered at special meetings of stockholders.
The Restated Certificate also provides that the only business
(including election of directors) that may be considered at an annual meeting
of stockholders, in addition to business proposed (or persons nominated to be
directors) by the Company's directors, is business proposed (or persons
nominated to be directors) by stockholders who comply with the notice and
disclosure requirements set forth in the Restated Certificate. In general, the
Restated Certificate requires that a stockholder give the Company notice of
proposed business or nominations no later than 60 days before the annual
meeting of stockholders (meaning the date on which the meeting is first
scheduled and not postponements or adjournments thereof) or (if later) ten days
after the first public notice of the annual meeting is sent to common
stockholders. In general, the notice must also contain information about the
stockholder proposing the business or nomination, his interest in the business,
and (with respect to nominations for
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<PAGE> 18
director) information about the nominee of the nature ordinarily required to be
disclosed in public proxy solicitations. The stockholder also must submit a
notarized letter from each of his nominees stating the nominee's acceptance of
the nomination and indicating the nominee's intention to serve as director if
elected.
The Restated Certificate also restricts the ability of stockholders to
interfere with the powers of the Board of Directors in certain specified ways,
including the constitution and composition of committees and the election and
removal of officers.
The Restated Certificate provides that approval by the holders of at
least 66 2/3% of the outstanding voting stock of the Company is required to
amend the provisions of the Restated Certificate discussed above and certain
other provisions, except that (a) approval by the holders of at least 80% of
the outstanding voting stock of the Company together with approval by the
holders of at least 66 2/3% of the outstanding voting stock not owned, directly
or indirectly, by the Related Person, is required to amend the fair price
provisions, and (b) approval of the holders of at least 80% of the outstanding
voting stock of the Company is required to amend the provisions prohibiting
stockholders from acting by written consent.
DELAWARE ANTI-TAKEOVER STATUTE
The Company is a Delaware corporation and is subject to Section 203 of
the Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company for three years
following the date that person becomes an interested stockholder unless (a)
before that person became an interested stockholder, the Board of Directors
approved the transaction in which the interested stockholder became an
interested stockholder or approved the business combination, (b) upon
completion of the transaction that resulted in the interested stockholder's
becoming an interested stockholder, the interested stockholder owns at least
85% of the Company's voting stock outstanding at the time the transaction
commenced (excluding stock held by directors who are also officers of the
Company and by employee stock plans that do not provide employees with the
right to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer), or (c) following the transaction in
which that person became an interested stockholder, the business combination is
approved by the Board of Directors and authorized at a meeting of stockholders
by the affirmative vote of the holders of at least two-thirds of the
outstanding voting stock of the Company not owned by the interested
stockholder.
Under Section 203, these restrictions also do not apply to certain
business combinations proposed by an interested stockholder following the
announcement or notification of one or certain extraordinary transactions
involving the Company and a person who was not an interested stockholder during
the previous three years or who became an interested stockholder with the
approval of a majority of the Company's directors, if that extraordinary
transaction is approved or not opposed by a majority of the directors before
any person became an interested stockholder in the previous three years or who
were recommended for election or elected to succeed such directors by a
majority of such directors then in office.
PIONEER CANADA EXCHANGEABLE SHARES
In connection with the Chauvco Transaction, the Company issued the
Voting Share and entered into the Support Agreement and the Voting and Trust
Agreement, and assumed certain obligations with respect to the Exchangeable
Shares issued by Pioneer Canada. The Exchangeable Shares have the rights and
preferences summarized below.
Voting Rights. The holders of Exchangeable Shares have voting rights
or matters submitted to the holders of the Company's Common Stock as previously
described in "Description of Capital Stock--Preferred Stock--Special Preferred
Voting Stock."
Dividends. Holders of Exchangeable Shares will be entitled to receive
dividends equal to dividends paid from time to time by the Company on shares of
the Common Stock. The declaration date, record date and payment date for
dividends on the Exchangeable Shares will be the same as that for the
corresponding dividends on the Common Stock. In the event of the liquidation,
dissolution or winding-up of Pioneer Canada, a holder of Exchangeable Shares
will be entitled to receive for each Exchangeable Share one share of Common
Stock, together with a cash amount equal to the full amount of all unpaid
dividends on the Exchangeable Shares. See "Description of Capital
Stock--Pioneer Canada Exchangeable Shares--Voting and Exchange Trust
Agreement." The rights, privileges, restrictions and conditions attaching to
the Exchangeable Shares may be changed only with the approval of the holders
thereof.
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<PAGE> 19
Redemption of Exchangeable Shares by Holders. Each Exchangeable Share
is redeemable at the option of the holder for one share of Common Stock plus the
amount equal of unpaid dividends thereon. The redemption price must be delivered
on the date specified by the holder (not less than three nor more than ten
business days after the redemption request) and is payable by Pioneer Canada,
or, if it is unable to do so, by the Company.
Redemption of Exchangeable Shares. Upon at least 120-days prior written
notice by Pioneer Canada to the holders of Exchangeable Shares and subject to
the Company's redemption call right (as described below), on the Automatic
Redemption Date (as defined below) Pioneer Canada will redeem all but not less
than all of the then outstanding Exchangeable Shares for one share of Common
Stock for each Exchangeable Share plus an additional amount equivalent to the
full amount of all unpaid dividends thereon. "Automatic Redemption Date" means
December 18, 2003, unless (a) such date shall be extended at any time or from
time to time to a specified later date by the Board of Directors of Pioneer
Canada but not later than December 31, 2005, or (b) such date shall be
accelerated at any time to a specified earlier date (but no earlier than the
third anniversary of the first issuance of Exchangeable Shares) by the Board of
Directors of Pioneer Canada if at such time there are issued and outstanding
less than 5% of the number of Exchangeable Shares initially issued and
outstanding in the Chauvco Transaction.
Support Agreement
Under the Support Agreement, the Company agreed that: (i) it will not
declare or pay dividends on the Common Stock unless Pioneer Canada is able to
and simultaneously pays an equivalent dividend on the Exchangeable Shares; (ii)
it will advise Pioneer Canada in advance of the declaration of any dividend on
the Common Stock and ensure that the declaration date, record date and payment
date for dividends on the Exchangeable Shares are the same as that for the
Common Stock; (iii) it will take all actions and do all things necessary to
ensure that Pioneer Canada is able to provide to the holders of the Exchangeable
Shares the equivalent number of shares of Common Stock in the event of a
liquidation, dissolution, or winding-up of Pioneer Canada, a redemption request
by a holder of Exchangeable Shares, or a redemption of Exchangeable Shares of
Pioneer Canada; and (iv) it will not vote or otherwise take any action or omit
to take any action causing the liquidation, dissolution or winding-up of Pioneer
Canada.
The Support Agreement also provides that, without the prior approval
of Pioneer Canada and the holders of the Exchangeable Shares, the Company will
not distribute additional shares of Common Stock or rights to subscribe
therefor or other property or assets to all or substantially all holders of
shares of Common Stock, nor change the Common Stock nor effect any tender
offer, share exchange offer, issuer bid, take-over bid or similar transaction
affecting the Common Stock, unless the same or an equivalent distribution on or
change to the Exchangeable Shares (or in the rights of the holders thereof) is
made simultaneously. The Company has agreed that so long as there remain
outstanding any Exchangeable Shares not owned by the Company or any entity
controlled by the Company, the Company will remain the beneficial owner,
directly or indirectly, of all outstanding shares of Pioneer Canada other than
the Exchangeable Shares.
With certain limited exceptions, the Support Agreement may not be
amended without the approval of the holders of the Exchangeable Shares.
Under the Support Agreement, the Company has agreed not to exercise
any voting rights attached to the Exchangeable Shares owned by it or any entity
controlled by it on any matter considered at meetings of holders of
Exchangeable Shares (including any approval sought from such holders in respect
of matters arising under the Support Agreement).
Voting and Exchange Trust Agreement
Under the terms of the Voting and Exchange Trust Agreement, the Company
will issue and grant to the Share Trustee the (i) rights of the holders of
Exchangeable Shares to direct the voting of the
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<PAGE> 20
Voting Share in accordance with the Voting and Exchange Trust Agreement (the
"Voting Rights"), and (ii) the Automatic Exchange Rights (as defined below) and
the optional exchange right granted to the Share Trustee for the use and benefit
of the holders of the Exchangeable Shares pursuant to the Voting and Exchange
Trust Agreement to require the Company to purchase Exchangeable Shares from the
holders thereof in exchange for shares of Common Stock upon the occurrence of a
Pioneer Canada Insolvency Event (as defined herein). "Automatic Exchange Rights"
means the rights granted to the Share Trustee for the benefit of the holders of
the Exchangeable Shares pursuant to the Voting and Exchange Trust Agreement to
automatically exchange the Exchangeable Shares for shares of Common Stock upon a
Pioneer Liquidation Event (as defined herein).
Voting Rights. Under the Voting and Exchange Trust Agreement, the
Company will issue the Voting Share to the Share Trustee for the benefit of the
holders (other than the Company and its subsidiaries) of the Exchangeable
Shares. The Voting Share will have those voting rights with respect to the
Company's Common Stock as previously discussed in "Description of Capital
Stock--Special Preferred Voting Stock."
Exchange Rights. Under the Voting and Exchange Trust Agreement, the
Company will grant the Exchange Rights (as defined below) to the Trustee for the
benefit of the holders of the Exchangeable Shares. "Exchange Rights" means the
Automatic Exchange Rights and the optional exchange right granted to the Share
Trustee for the use and benefit of the holders of the Exchangeable Shares
pursuant to the Voting and Exchange Trust Agreement to require the Company to
purchase Exchangeable Shares from the holders thereof in exchange for shares of
Common Stock upon the occurrence of a Pioneer Canada Insolvency Event.
Optional Exchange Right. Upon the occurrence and during the
continuance of a Pioneer Canada Insolvency Event, a holder of Exchangeable
Shares will be entitled to instruct the Share Trustee to exercise the optional
Exchange Right with respect to any or all of the Exchangeable Shares held by
such holder, thereby requiring the Company to purchase such Exchangeable Shares
from the holder. Immediately upon the occurrence of a Pioneer Canada Insolvency
Event or any event which may with the passage of time or the giving of notice
become a Pioneer Canada Insolvency Event, Pioneer Canada and the Company will
give written notice thereof to the Share Trustee. As soon as practicable
thereafter, the Trustee will notify each holder of Exchangeable Shares of such
event or potential event and will advise the holder of its rights with respect
to the optional Exchange Right. "Pioneer Canada Insolvency Event" means any
insolvency or bankruptcy proceeding instituted by or against Pioneer Canada,
including any such proceeding under the Companies' Creditors Arrangement Act
(Canada) and the Bankruptcy and Insolvency Act (Canada) and the admission in
writing by Pioneer Canada of its inability to pay its debts generally as they
become due and the inability of Pioneer Canada, as a result of solvency
requirements of applicable law, to redeem any Exchangeable Shares tendered for
redemption.
The consideration for each Exchangeable Share to be acquired under the
optional Exchange Right will be one share of Common Stock plus an additional
amount equivalent to the full amount of all dividends declared and unpaid on the
Exchangeable Share.
If, as a result of liquidity or solvency provisions of applicable law,
Pioneer Canada is unable to redeem all of the Exchangeable Shares tendered for
redemption by a holder in accordance with the Exchangeable Share Provisions, the
holder will be deemed to have exercised the optional Exchange Right with respect
to the unredeemed Exchangeable Shares and the Company will be required to
purchase such shares from the holder in the manner set forth above.
Automatic Exchange Right. In the event of a Pioneer Liquidation Event,
the Company will be required to acquire each outstanding Exchangeable Share by
exchanging one share of Common Stock for each such Exchangeable Share, plus an
additional amount equivalent to the full amount of all declared and unpaid
dividends on the Exchangeable Shares. "Pioneer Liquidation Event" means: (i)
any determination by the Company's Board of Directors to institute voluntary
liquidation, dissolution or winding-up proceedings with respect to the Company
or to effect any other distribution of assets of the Company among its
stockholders for the purpose of winding up its affairs; or (ii) immediately upon
the earlier of (A) receipt by the Company of notice of, and (B) the Company
becoming aware of any threatened or instituted claim, suit, petition or other
proceeding with respect to the involuntary liquidation, dissolution or
winding-up of the Company or to effect any other distribution of assets of the
Company among its stockholders for the purpose of winding- up its affairs.
Delivery of Pioneer Common Stock
The Company has agreed to ensure that all shares of Common Stock to be
delivered by it under the Support Agreement or on the exercise of the Exchange
Rights under the Voting and Exchange Trust Agreement are duly registered,
qualified or approved under applicable Canadian and United States securities
laws, if required so that such shares may be freely traded by the holder thereof
(other than any restriction on transfer by reason of a holder being a "control
person" of the Company for purposes of Canadian law or an "affiliate" of the
Company for purposes of United States law). In addition, the Company will take
all actions necessary to cause all such shares of Common Stock to be listed or
quoted for trading on all stock exchanges or quotation systems on which
outstanding shares of Common Stock are then listed or quoted for trading.
18
<PAGE> 21
Call Rights
The following section describes (i) the right of the Company, in the
event of a proposed liquidation, dissolution or winding-up of Pioneer Canada, to
purchase all of the outstanding Exchangeable Shares from the holders thereof on
the effective date of any such liquidation, dissolution or winding-up in
exchange for shares of Common Stock pursuant to the Plan of Arrangement (the
"Liquidation Call Right"), (ii) the right of the Company to purchase all of the
outstanding Exchangeable Shares from the holders thereof on the Automatic
Redemption Date in exchange for shares of Common Stock pursuant to the Plan of
Arrangement, and (iii) the overriding right of the Company, in the event of a
proposed redemption of Exchangeable Shares by a holder thereof, to purchase
from such holder on the redemption date the Exchangeable Shares tendered for
redemption in exchange for shares of Common Stock pursuant to the
Exchangeable Share Provisions.
Optional Redemption By The Holders. Pursuant to the
Exchangeable Share Provisions, a holder requesting Pioneer Canada to redeem the
Exchangeable Shares will be deemed to offer such shares to the Company, and the
Company will have an overriding redemption call right to acquire all but not
less than all of the Exchangeable Shares that the holder has requested Pioneer
Canada to redeem in exchange for one share of Common Stock for each Exchangeable
Share, plus an additional amount equivalent to the full amount of all declared
and unpaid dividends thereon.
At the time of a redemption request by a holder of Exchangeable
Shares, Pioneer Canada will immediately notify the Company. The Company must
then advise Pioneer Canada within two business days as to whether the Company
will exercise its redemption call right. If the Company does not advise Pioneer
Canada within such two business day period, Pioneer Canada will notify the
holder as soon as possible thereafter that the Company will not exercise its
redemption call right. A holder may revoke his or her redemption request, at any
time prior to the close of business on the business day preceding the redemption
date, in which case the holder's Exchangeable Shares will neither be purchased
by the Company nor redeemed by Pioneer Canada. If the holder does not revoke his
or her redemption request, on the redemption date the Exchangeable Shares that
the holder has requested Pioneer Canada to redeem will be acquired by the
Company (assuming the Company exercises its redemption call right) or redeemed
by Pioneer Canada, as the case may be, in each case for one share of Common
Stock for each Exchangeable Share plus an additional amount equal to the full
amount of all declared and unpaid dividends on the Exchangeable Shares.
Liquidation Call Right. Pursuant to the Plan of Arrangement,
the Company will be granted an overriding Liquidation Call Right, in the event
of and notwithstanding a proposed Pioneer Canada Insolvency Event, to acquire
all but not less than all of the Exchangeable Shares then outstanding in
exchange for Common Stock and, upon the exercise by the Company of the
Liquidation Call Right, the holders thereof will be obligated to transfer such
shares to the Company. The acquisition by the Company of all of the
outstanding Exchangeable Shares upon the exercise of the Liquidation Call Right
will occur on the effective date of the voluntary or involuntary liquidation,
dissolution or winding-up of Pioneer Canada.
Optional Redemption By The Company. Pursuant to the Plan of
Arrangement, the Company will be granted an overriding redemption call right,
notwithstanding the proposed automatic redemption of the Exchangeable Shares
by Pioneer Canada pursuant to the Exchangeable Share Provisions, to acquire on
the Automatic Redemption Date all but not less than all of the Exchangeable
Shares then outstanding in exchange for Common Stock plus an additional amount
equal to the full amount of all declared and unpaid dividends on the
Exchangeable Shares and, upon the exercise by the Company of the redemption
call right, the holders thereof will be obligated to transfer such shares to
the Company.
Effect of Call Right Exercise. If the Company exercises one or
more of its call rights, it will directly issue shares of Common Stock to
holders of Exchangeable Shares and will become the holder of such Exchangeable
Shares. The Company will not be entitled to exercise any voting rights attached
to the Exchangeable Shares it so acquires. If the Company declines to exercise
its call rights when applicable, it will be required, pursuant to the Support
Agreement, to issue shares of Common Stock to Pioneer Canada which will, in
turn, transfer such stock to the holders of Exchangeable Shares in consideration
for the return and cancellation of such Exchangeable Shares.
19
<PAGE> 22
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of
certain provisions of the Deposit Agreement (as defined below), Depositary
Shares (as defined below) and Depositary Receipts (as defined below) does not
purport to be complete and is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipts to each
series of Preferred Stock that will be filed with the SEC in connection with
the offering of the series of Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
depositary to the public of receipts for depositary shares ("Depositary
Shares"), each of which will represent fractional interests of a particular
series of Preferred Stock (which will be set forth in the Prospectus Supplement
to a particular series of Preferred Stock).
The shares of any series of Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50 million. The Prospectus Supplement to a
series of Depositary Shares will set forth the name and address of the
depositary with respect to the Depositary Shares. Subject to the terms of the
Deposit Agreement, each owner of Depositary Shares will be entitled, in
proportion to the applicable fractional interests in shares of Preferred Stock
underlying the Depositary Shares, to all the rights and preferences of the
Preferred Stock underlying the Depositary Shares (including dividend, voting,
redemption, conversion, and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional
interests in shares of the related series of Preferred Stock in accordance with
the terms of the offering described in the related Prospectus Supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to Preferred Stock to the record holders of
Depositary Shares to the Preferred Stock in proportion to the numbers of the
Depositary Shares owned by the holders on the relevant record date. The
depositary shall distribute only the amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and the balance not so distributed shall be added to and treated as part of the
next sum received by the depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the depositary determines that it is not feasible to
make the distribution, in which case the depositary may, with the approval of
the Company, sell the property and distribute the net proceeds from the sale to
the holders.
The Deposit Agreement will also contain provisions to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to the holders of Depositary
Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the depositary resulting from the redemption, in whole or in part,
of the series of the Preferred Stock held by the depositary. The depositary
shall mail notice of redemption not less than 30 and not more than 60 days
prior to the date fixed for redemption to the record holders of the Depositary
Shares to be so redeemed at their respective addresses appearing in the
depositary's books. The redemption price per Depositary Share will be equal to
the applicable fraction of the redemption price per share payable with respect
to the series of the Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the depositary, the depositary will redeem as of the
same redemption date the number of Depositary Shares to shares of Preferred
Stock so redeemed. If less than all the Depositary Shares are to be redeemed,
the Depositary Shares to be redeemed will be selected by lot or pro rata as may
be determined by the depositary.
After the date fixed for redemption, the Depositary Shares so called
for redemption will no longer be outstanding and all rights of the holders of
the Depositary Shares will cease, except the right to receive the money,
securities, or other property payable upon the redemption and any money,
securities, or other property to which the holders of the Depositary Shares
were entitled upon the redemption upon surrender to the depositary of the
Depositary Receipts evidencing the Depositary Shares.
20
<PAGE> 23
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the depositary will mail the information
contained in the notice of meeting to the record holders of the Depositary
Shares to the Preferred Stock. Each record holder of the Depositary Shares on
the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying the holder's Depositary Shares. The depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying the Depositary Shares in accordance with the instructions, and the
Company will agree to take all action that may be deemed necessary by the
depositary in order to enable the depositary to do so.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and
any provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the depositary. However, any amendment that materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless the amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the depositary only if
(a) all outstanding Depositary Shares thereto have been redeemed or, (b) there
has been a final distribution with respect to the Preferred Stock of the
relevant series in connection with any liquidation, dissolution, or winding up
of the Company and the distribution has been distributed to the holders of the
related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Company will pay charges of the depositary in connection with the initial
deposit of the Preferred Stock and any redemption of the Preferred Stock.
Holders of Depositary Shares will pay transfer and other taxes and governmental
charges and the other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to the Company
notice of its election to do so, and the Company may at any time remove the
depositary, any such resignation or removal to take effect upon the appointment
of a successor depositary and its acceptance of the appointment. The successor
depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50 million.
MISCELLANEOUS
The depositary will forward to the holders of Depositary Shares all
reports and communications from the Company that are delivered to the
depositary and that the Company is required to furnish to the holders of the
Preferred Stock.
Neither the depositary nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the depositary under the Deposit Agreement will be limited to
performance in good faith of their duties thereunder and they will not be
obligated to prosecute or defend any legal proceeding with respect to any
Depositary Shares or Preferred Stock unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, or
information provided by persons presenting Preferred Stock for deposit, holders
of Depositary Shares, or other persons believed to be competent and on
documents believed to be genuine.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock or Common Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from any such Offered
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Warrant Agent"). The Warrant
Agent will act solely as an agent of the Company in connection with the
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of Warrants. The following summary
of certain provisions of the Warrants does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the provisions of
the Warrant Agreement that will be filed with the SEC in connection with the
offering of the Warrants.
21
<PAGE> 24
DEBT WARRANTS
The Prospectus Supplement to a particular issue of Debt Warrants will
describe the terms of the Debt Warrants, including the following: (a) the title
of the Debt Warrants; (b) the offering price for the Debt Warrants, if any; (c)
the aggregate number of the Debt Warrants; (d) the designation and terms of the
Debt Securities purchasable upon exercise of the Debt Warrants; (e) if
applicable, the designation and terms of the Debt Securities with which the
Debt Warrants are issued and the number of the Debt Warrants issued with each
Debt Security; (f) if applicable, the date from and after which the Debt
Warrants and any Debt Securities issued therewith will be separately
transferable; (g) the principal amount of Debt Securities purchasable upon
exercise of a Debt Warrant and the price at which the principal amount of Debt
Securities may be purchased upon exercise (which price may be payable in cash,
securities, or other property); (h) the date on which the right to exercise the
Debt Warrants shall commence and the date on which the right shall expire; (i)
if applicable, the minimum or maximum amount of the Debt Warrants that may be
exercised at any one time; (j) whether the Debt Warrants represented by the
Debt Warrant certificates or Debt Securities that may be issued upon exercise
of the Debt Warrants will be issued in registered or bearer form; (k)
information with respect to book- entry procedures, if any; (l) the currency or
currency units in which the offering price, if any, and the exercise price are
payable; (m) if applicable, a discussion of material United States federal
income tax considerations; (n) the antidilution provisions of the Debt
Warrants, if any; (o) the redemption or call provisions, if any, applicable to
the Debt Warrants; and (p) any additional terms of the Debt Warrants, including
terms, procedures, and limitations to the exchange and exercise of the Debt
Warrants.
STOCK WARRANTS
The Prospectus Supplement to any particular issue of Preferred Stock
Warrants or Common Stock Warrants will describe the terms of the Warrants,
including the following: (a) the title of the Warrants; (b) the offering price
for the Warrants, if any; (c) the aggregate number of the Warrants; (d) the
designation and terms of the Common Stock or Preferred Stock purchasable upon
exercise of the Warrants; (e) if applicable, the designation and terms of the
Offered Securities with which the Warrants are issued and the number of the
Warrants issued with each Offered Security; (f) if applicable, the date from
and after which the Warrants and any Offered Securities issued therewith will
be separately transferable; (g) the number of shares of Common Stock or
Preferred Stock purchasable upon exercise of a Warrant and the price at which
the shares may be purchased upon exercise (which price may be payable in cash,
securities, or other property); (h) the date on which the right to exercise the
Warrants shall commence and the date on which the right shall expire; (i) if
applicable, the minimum or maximum amount of the Warrants that may be exercised
at any one time; (j) the currency or currency units in which the offering
price, if any, and the exercise price are payable; (k) if applicable, a
discussion of material United States federal income tax considerations; (l) the
antidilution provisions of the Warrants, if any; (m) the redemption or call
provisions, if any, applicable to the Warrants; and (n) any additional terms of
the Warrants, including terms, procedures and limitations to the exchange and
exercise of the Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities within or outside the
United States through underwriters, brokers or dealers, directly to one or more
purchasers, or through agents. The Prospectus Supplement with respect to the
Offered Securities will set forth the terms of the offering of the Offered
Securities, including the name or names of any underwriters, dealers or agents,
the purchase price of the Offered Securities and the proceeds to the Company
from the sale, any delayed delivery arrangements, any underwriting discounts
and other items constituting underwriters' compensation, the initial public
offering price, any discounts or concessions allowed or reallowed or paid to
dealers, and any securities exchanges on which the Offered Securities may be
listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering of Offered
Securities will be named in the Prospectus Supplement to the offering, and if
an underwriting syndicate is used, the managing underwriter or underwriters
will be set forth on the cover of the Prospectus Supplement. Unless otherwise
set forth in the Prospectus Supplement thereto, the obligations of the
underwriters or agents to purchase the Offered Securities will be subject to
conditions precedent and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased. The initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
The Company may also sell the Offered Securities pursuant to one or
more standby agreements with one or more underwriters in connection with the
call for redemption of a specified class or series of any securities of the
Company or any subsidiary of the Company. In such a standby agreement, the
underwriter or underwriters would agree either (a) to purchase from
22
<PAGE> 25
the Company up to the number of shares of Common Stock that would be issuable
upon conversion of all the shares of the class or series of securities of the
Company or its subsidiary at an agreed price per share of Common Stock, or (b)
to purchase from the Company up to a specified dollar amount of Offered
Securities at an agreed price per Offered Security which price may be fixed or
may be established by formula or other method and which may or may not relate
to market prices of the Common Stock or any other security of the Company then
outstanding. The underwriter or underwriters would also agree, if applicable,
to convert into Common Stock or other security of the Company any securities of
the class or series held or purchased by the underwriter or underwriters. The
underwriter or underwriters may assist in the solicitation of conversions by
holders of the class or series of securities.
If dealers are used in the sale of Offered Securities with respect to
which this Prospectus is delivered, the Company will sell the Offered
Securities to the dealers as principals. The dealers may then resell the
Offered Securities to the public at varying prices to be determined by the
dealers at the time of resale. The names of the dealers and the terms of the
transaction will be set forth in the Prospectus Supplement thereto.
Offered Securities may be sold directly by the Company or through
agents designated by the Company from time to time at fixed prices, which may
be changed, or at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the Offered Securities with respect to which
this Prospectus is delivered will be named, and any commissions payable by the
Company to the agent will be set forth, in the Prospectus Supplement thereto.
Unless otherwise indicated in the Prospectus Supplement, any agent will be
acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Offered Securities, underwriters or
agents may receive compensation from the Company or from purchasers of Offered
Securities for whom they may act as agents in the form of discounts,
concessions, or commissions. Underwriters, agents, and dealers participating in
the distribution of the Offered Securities may be deemed to be underwriters,
and any discounts or commissions received by them from the Company and any
profit on the resale of the Offered Securities by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. The contracts will be subject only to those conditions set forth in
the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of the contracts.
Agents, dealers and underwriters may be entitled under agreements
entered into with the Company to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that the agents, dealers or underwriters
may be required to make with respect thereto. Agents, dealers and underwriters
may be customers of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
The Offered Securities may or may not be listed on a national
securities exchange. No assurances can be given that there will be a market for
the Offered Securities.
LEGAL OPINIONS
Certain legal matters in connection with the Offered Securities will
be passed upon for the Company by Vinson & Elkins L.L.P., Dallas, Texas, and
for any underwriters or agents by a firm named in the Prospectus Supplement to
a particular issue of Offered Securities. Michael D. Wortley, a partner of
Vinson & Elkins L.L.P., is also a director of the Company and beneficially owns
6,623 shares of Common Stock of the Company.
EXPERTS
The Consolidated Financial Statements of the Company (successor to
Parker & Parsley and subsidiaries) have been incorporated by reference in this
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, and upon the authority of said firm
as experts in accounting and auditing. The report of KPMG Peat Marwick LLP
refers to a change in the method of accounting for the impairment of long-lived
assets and for long-lived assets to be disposed of in 1995 and a change in the
method of accounting for income taxes in 1993.
The Consolidated Financial Statements of Mesa incorporated by
reference in this Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said report.
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<PAGE> 26
The Financial Statements of Greenhill Petroleum Corporation
incorporated by reference in this Registration Statement, have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The Consolidated Financial Statements of Chauvco Resources Ltd.
incorporated by reference in this Registration Statement have been audited by
Price Waterhouse, chartered accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said report.
The estimates of the proved reserves of the Company (successor to
Parker & Parsley and subsidiaries) as of December 31, 1996, incorporated by
reference in this Registration Statement, are based upon a reserve report
prepared by the Company and audited by Netherland, Sewell & Associates, Inc.,
independent petroleum consultants, and are incorporated by reference herein upon
the authority of such firm as experts with respect to such matters covered by
such report.
The estimates of Mesa's proved reserves as of December 31, 1996,
incorporated by reference in this Registration Statement with respect to its
Hugoton and West Panhandle field properties are based upon a reserve report
prepared by Williamson Petroleum Consultants, Inc., independent petroleum
consultants, and are incorporated by reference herein upon the authority of
such firm as experts with respect to such matters covered by such report. The
estimates of Greenhill Petroleum Corporation's proved reserves as of December
31, 1996, incorporated by reference in this Registration Statement pursuant to
items 9 and 14 under the section entitled "Incorporation of Certain Documents
By Reference" in this Registration Statement, are based upon a reserve report
prepared by Miller and Lents, Ltd., independent petroleum consultants, and are
incorporated by reference herein upon the authority of such firm as experts
with respect to such matters covered by such report.
The estimates of Chauvco Resources Ltd. proved reserves as of December
31, 1996, incorporated by reference in this Registration Statement, are based
upon reserve reports prepared by Gilbert Lausten Jung Associates, Ltd. and
Martin Petroleum and Associates, independent petroleum consultants, and are
incorporated by reference herein upon the authority of such firm as experts
with respect to such matters covered by such report.
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<PAGE> 27
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN A
PROSPECTUS SUPPLEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OTHER PERSON. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY
ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION IN WHICH THE OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE THE OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT ANY INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . 3
Ratios of Earnings to Fixed Earnings Charges
and Earnings to Fixed Charges and Preferred
Stock Dividends . . . . . . . . . . . . . . . 3
Description of Debt Securities . . . . . . . . . . 4
Description of Capital Stock . . . . . . . . . . . 14
Description of Depositary Shares . . . . . . . . . 20
Description of Warrants . . . . . . . . . . . . . . 21
Plan of Distribution . . . . . . . . . . . . . . . 22
Legal Opinions . . . . . . . . . . . . . . . . . . 23
Experts . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
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================================================================================
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LOGO
PIONEER NATURAL
RESOURCES
COMPANY
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
---------------
PROSPECTUS
---------------
December , 199
================================================================================
<PAGE> 28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 -- OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses to be incurred by the
registrant, Pioneer Natural Resources Company (the "Company"), in connection
with the issuance and distribution of the securities being registered. Except
for the Securities and Exchange Commission registration fee, all amounts shown
are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission
registration fee . . . . . . . . . . . . . $ 261,485
Accounting fees and expenses . . . . . . . 5,000
Legal fees and expenses . . . . . . . . . . 15,000
Transfer agent's fees and expenses . . . . 10,000
Blue Sky fees and expenses, including
counsel fees . . . . . . . . . . . . . . . 1,000
Fees of rating agencies . . . . . . . . . . 0
Listing fees . . . . . . . . . . . . . . . 24,500
Printing and engraving expenses . . . . . . 100,000
Miscellaneous . . . . . . . . . . . . . . . 10,000
----------
Total . . . . . . . . . . . . . . . . . . . $ 426,985
==========
</TABLE>
ITEM 15 -- INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Twelfth of the Amended and Restated Certificate of
Incorporation of the registrant provides that the registrant must indemnify its
officers and directors to the extent allowed by the Delaware General
Corporation Law. Pursuant to Section 145 of the Delaware General Corporation
Law, the registrant generally has the power to indemnify its present and former
directors and officers against expenses and liabilities incurred by them in
connection with any suit to which they are, or are threatened to be made, a
party by reason of their serving in those positions so long as they acted in
good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interests of the registrant, and with respect to any criminal
action, they had no reasonable cause to believe their conduct was unlawful.
With respect to suits by or in the right of the registrant, however,
indemnification is generally limited to attorneys' fees and other expenses and
is not available if the person is adjudged to be liable to the registrant
unless the court determines that indemnification is appropriate. The statute
expressly provides that the power to indemnify authorized thereby is not
exclusive of any rights granted under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise. The registrant also has
the power to purchase and maintain insurance for its directors and officers.
Additionally, Article Twelfth of the Amended and Restated Certificate of
Incorporation provides that, in the event that an officer or director files
suit against the registrant seeking indemnification of liabilities or expenses
incurred, the burden will be on the registrant to prove that the
indemnification would not be permitted under the Delaware General Corporation
Law.
The registrant has entered into Indemnification Agreements with each
of its directors and officers. These agreements provide that the registrant
must indemnify an officer or director for liabilities incurred to the fullest
extent permitted by the Delaware General Corporation Law. The registrant must,
within ten days of a request, indemnify an officer or director for expenses
incurred in the defense of a claim or other proceeding. The obligation of the
registrant to provide the indemnification does not apply if, before the date on
which the registrant must provide the indemnification, the registrant's Board
of Directors, or a representative chosen by the Board of Directors, concludes
that indemnification would be improper under the Delaware General Corporation
Law.
The preceding discussion of the registrant's Amended and Restated
Certificate of Incorporation, Section 145 of the Delaware General Corporation
Law, and the Indemnification Agreements is not intended to be exhaustive and is
qualified in its entirety by the Amended and Restated Certificate of
Incorporation, Section 145 of the Delaware General Corporation Law, and the
Indemnification Agreements.
ITEM 16 -- EXHIBITS
There are filed with the Registration Statement the following
exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
1.1* -- Underwriting Agreement.
2.1 -- Amended and Restated Agreement and Plan of Merger, dated as of April 6, 1997, by and among
Mesa, Mesa Operating Co. ("MOC"), MXP Reincorporation Corp. and Parker & Parsley
(incorporated by reference to Exhibit 2.1 to the Company's Registration Statement on Form
S-4, dated June 27, 1997, Registration No. 333-26951).
</TABLE>
II-1
<PAGE> 29
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
2.2** -- Combination Agreement, dated as of September 3, 1997, between the Company and Chauvco.
2.3 -- Plan of Arrangement under Section 186 of the Business Corporations Act (Alberta)
(incorporated by reference to Annex E to the Definitive Joint Management Information
Circular and Proxy Statement of the Company and Chauvco Resources Ltd., File No. 001-13245,
filed with the SEC on November 17, 1997).
2.4 -- Form of Support Agreement between the Company and Pioneer Canada (incorporated by reference to
Annex H to the Definitive Joint Management Information Circular and Proxy Statement of the
Company and Chauvco Resources Ltd., File No. 001-13245, filed with the SEC on November 17,
1997).
2.5 -- Form of Voting and Exchange Trust Agreement among the Company, Pioneer Canada and Montreal
Trust Company of Canada, as Trustee (incorporated by reference to Pioneer's Current Report
on Form 8-K, File No. 001-13245, filed with the SEC on October 2, 1997).
2.6** -- Amended and Restated Shareholders Agreement, dated as of September 3, 1997, by and among
the Company and Guy J. Turcotte.
2.7 -- Shareholders Agreement, dated as of September 3, 1997, by and among the Company, Chauvco, DNR-
MESA Holdings, L.P. ("DNR"), Scott D. Sheffield and I. Jon Brumley (incorporated by
reference to Exhibit 2.3 to the Company's Current Report on Form 8-K, File No. 001-13245, filed
with the SEC on October 2, 1997).
2.8 -- Shareholders Agreement, dated as of September 3, 1997, by and among the Company, Trimac
Corporation and Gendis Inc. (incorporated by reference to Exhibit 2.4 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the SEC on October 2, 1997).
3.1 -- Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form S-4, Registration No. 333-26951).
3.2 -- Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-4, Registration No. 333-26951).
3.3** -- Certificate of Designations of Special Preferred Voting Stock.
3.4 -- Terms and Conditions of Exchangeable Shares (incorporated by reference to Annex F to the
Definitive Joint Management Information Circular and Proxy Statement of the Company and
Chauvco Resources Ltd., File No. 001-13245, filed with the SEC on November 17, 1997).
4.1 -- Form of Certificate of Common Stock, par value $.01 per share, of the Company (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4, Registration
No. 333-26951).
4.2** -- Form of Indenture between the Company and one or more commercial banks to be named, as trustee.
4.3* -- Form of Senior Debt Security.
4.4* -- Form of Subordinated Debt Security.
4.5* -- Form of Deposit Agreement.
4.6* -- Form of Depositary Receipt.
4.7* -- Form of Warrant Agreement.
4.8* -- Form of Warrant Certificate.
5.1** -- Form of opinion of Vinson & Elkins L.L.P. as to the legality of the securities to be
registered.
</TABLE>
II-2
<PAGE> 30
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
9.1 -- Shareholder Agreement, dated as of April 6, 1997, between Mesa, Boone Pickens and Parker &
Parsley (incorporated by reference to Exhibit 2.4 of Mesa's Form 8-K filed April 8, 1997).
9.2 -- Shareholders Agreement, dated as of April 6, 1997, between DNR and Mesa (incorporated by
reference to Exhibit 2.2 of Mesa's Form 8-K filed April 8, 1997).
10.1 -- Indenture, dated July 2, 1996, among Pioneer Natural Resources USA, Inc. ("Pioneer USA")
(formerly MOC), as Issuer, the Company (Mesa's successor), as Guarantor, and Harris Trust and
Savings Bank, as Trustee, relating to the 11 5/8% Senior Subordinated Discount Notes Due
2006 (incorporated by reference to Exhibit 4.17 of Mesa's Form 10-Q dated August 13, 1996).
10.2 -- First Supplemental Indenture, dated as of April 15, 1997, among Pioneer USA (formerly MOC),
as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust and
Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit 10.1
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997, File No. 001-13245).
10.3 -- Second Supplemental Indenture, dated as of August 7, 1997, among Pioneer USA (formerly
MOC), as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust
and Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit
10.1 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1997, File No. 001-13245).
10.4 -- Indenture, dated July 2, 1996, among Pioneer USA (formerly MOC), as Issuer, the Company (Mesa's
successor), as Guarantor, and Harris Trust and Savings Bank, as Trustee, relating to 10
5/8% Senior Subordinated Notes Due 2006 (incorporated by reference to Exhibit 4.18 of
Mesa's Form 10-Q, dated August 13, 1996).
10.5 -- First Supplemental Indenture, dated as of April 15, 1997, among Pioneer USA (formerly MOC),
as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust and
Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit 10.4
(incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997, File No. 001-13245).
10.6 -- Second Supplemental Indenture, dated as of August 7, 1997, among Pioneer USA (formerly
MOC), as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust
and Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit
10.4 (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1997, File No. 001-13245).
10.7 -- Indentures relating to $50,000,000 principal amount of 8 1/2% Convertible Subordinated
Debentures due 2005 of Dorchester Master Limited Partnership ($3,762,000 principal amount
of which were outstanding and held by non affiliates at December 31, 1996) and $100,000,000
principal amount of 9 1/2% Senior Notes due 2000 of Bridge Oil (U.S.A.) Inc. ($2,063,000
principal amount of which were outstanding at December 31, 1996) have been omitted pursuant
to Item 601(b)(4)(iii)(A) of Regulation S-K. The Company hereby agrees to furnish a copy of
the indentures to the Securities and Exchange Commission upon request (incorporated by
reference to Parker & Parsley's Form 10-K, dated December 31, 1996).
10.8 -- Indenture, dated April 12, 1995, between Pioneer USA (successor to Parker & Parsley), and
The Chase Manhattan Bank (National Association), as Trustee (incorporated by reference to
Exhibit 4.1 to Parker & Parsley's Current Report on Form 8-K, dated April 12, 1995, File
No. 1-10695).
</TABLE>
II-3
<PAGE> 31
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.9 -- First Supplemental Indenture, dated as of August 7, 1997, among Parker & Parsley, The Chase
Manhattan Bank, as Trustee, and Pioneer USA, with respect to the indenture identified above
as Exhibit 10.8 (incorporated by reference to Exhibit 10.5 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1997, File No. 001-13245).
10.10 -- Form of 8 7/8% Senior Notes Due 2005, dated as of April 12, 1995, in the aggregate
principal amount of $150,000,000, together with Officers' Certificate dated April 12, 1995,
establishing the terms of the 8 7/8% Senior Notes Due 2005 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by reference to Exhibit 4.2 to Parker &
Parsley's Quarterly Report on Form 10-Q for the period ended June 30, 1995, File
No. 1-10695).
10.11 -- Form of 8 1/4% Senior Notes due 2007, dated as of August 22, 1995, in the aggregate
principal amount of $150,000,000, together with Officers' Certificate, dated August 22,
1995, establishing the terms of the 8 1/4% Senior Notes due 2007 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by reference to Exhibit 1.2 to Parker &
Parsley's Current Report on Form 8-K, dated August 17, 1995, File No. 1-10695).
10.12 -- Agreement of Sale between Pioneer Corporation and Cabot Corporation, dated August 29, 1984
(incorporated by reference to Exhibit 10.5 to Pioneer Corporation's Form 10-K, dated
December 31, 1985).
10.13 -- Settlement Agreement, dated March 15, 1989, by and among Mesa Operating Limited Partnership
and Mesa Limited Partnership, et al., Energas Company and the City of Amarillo
(incorporated by reference to Exhibit 10(k) to Mesa Limited Partnership's Form 10-K, dated
December 31, 1990).
10.14 -- Gas Purchase Agreement, dated December 1, 1989, between Williams Natural Gas Company and
Mesa Operating Limited Partnership acting on behalf of itself and as agent for Mesa
Midcontinent Limited Partnership (incorporated by reference to Exhibit 10.1 to Registration
Statement of Mesa Limited Partnership on Form S-3, Registration No. 33-32978).
10.15 -- "B" Contract Production Allocation Agreement, dated July 29, 1991, and effective as of
January 1, 1991, between Colorado Interstate Gas Company and Mesa Operating Limited
Partnership (incorporated by reference to Exhibit 10(r) to Mesa's Form 10-K, dated
December 31, 1991).
10.16 -- Amendment to "B" Contract Production Allocation Agreement effective as of January 1, 1993,
between Colorado Interstate Gas Company and Mesa Operating Limited Partnership
(incorporated by reference to Exhibit 10.24 to Mesa's Registration Statement on Form S-1,
Registration No. 033-51909).
10.17 -- Amended Peak Day Gas Purchase Agreement, dated effective June 19, 1991, between Colorado
Interstate Gas Company and Mesa Operating Limited Partnership (incorporated by reference to
Exhibit 10(t) to Mesa's Form 10-K, dated December 31, 1991).
10.18 -- Omnibus Amendment to Collateral Instruments to Supplemental Stipulation and Agreement,
dated June 19, 1991, between Colorado Interstate Gas Company and Mesa Operating Limited
Partnership (incorporated by reference to Exhibit 10(u) to Mesa's Form 10-K, dated
December 31, 1991).
10.19 -- Amarillo Supply Agreement between Mesa Operating Limited Partnership, Seller, and Energas
Company, a division of Atmos Energy Corporation, Buyer, dated effective January 2, 1993
(incorporated by reference to Exhibit 10.14 to Mesa's Form 10-K dated, December 31, 1995).
10.20 -- Gas Supply Agreement, dated May 11, 1994, between MOC, as successor to Mesa Operating
Limited Partnership, acting on behalf of itself and as agent for Hugoton Capital Limited
Partnership, and Williams Gas Marketing Company, and Gas Supply Guarantee, dated May 11,
1994 (incorporated by reference to Exhibit 10.16 to Mesa's Form 10-K, dated December 31,
1995).
</TABLE>
II-4
<PAGE> 32
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.21 -- Gas Transportation Agreement, dated June 14, 1994, between Western Resources, Inc. and MOC,
acting on behalf of itself and as agent for Hugoton Capital Limited Partnership
(incorporated by reference to Exhibit 10.24 to Mesa's Form 10-K, dated December 31, 1994).
10.22 -- 1991 Stock Option Plan of Mesa (incorporated by reference to Exhibit 10(v) to Mesa's Form
10-K, dated December 31, 1991).
10.23 -- Interruptible Gas Transportation and Sales Agreement, dated January 1, 1991, between Mesa
Operating Limited Partnership and Energas Company and Amendment, dated January 1, 1995
(incorporated by reference to Exhibit 10.22 to Mesa's Form 10-K, dated December 31, 1995).
10.24 -- "B" Contract Operating Agreement, dated January 1, 1988, between Mesa Operating Limited
Partnership and Colorado Interstate Gas Company (incorporated by reference to Exhibit 10.23
to Mesa's Form 10-K, dated December 31, 1995).
10.25 -- Gathering Agreement, dated May 29, 1987, between Mesa Operating Limited Partnership and
Colorado Interstate Gas Company (incorporated by reference to Exhibit 10.15 to the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 1997, File No.
001-13245).
10.26 -- Amendment to Gathering Agreement, dated July 15, 1990, between Colorado Interstate Gas
Company and Mesa Operating Limited Partnership (incorporated by reference to Exhibit 10.24
to Mesa's Form 10-K, dated December 31, 1995).
10.27 -- Amendment to 1990 Gathering Agreement Amendment, dated September 1, 1997, between Colorado
Interstate Gas Company and Pioneer USA (incorporated by reference to Exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 1997,
File No. 001-13245).
10.28 -- Gas Purchase Agreement, dated January 1, 1996, between MOC, as Seller, and KN Marketing
L.P., as Buyer, and Amendment, dated August 1, 1995 (incorporated by reference to
Exhibit 10.25 to Mesa's Form 10-K, dated December 31, 1995).
10.29 -- Employment Agreement, dated as of August 21, 1996, between Mesa and I. Jon Brumley
(incorporated by reference to Exhibit 10.26 of Mesa's Form 10-K, dated December 31, 1996).
10.30 -- Stock Purchase Agreement, dated April 26, 1996, between Mesa and DNR (incorporated by
reference to Exhibit No. 10 to Mesa's Form 8-K filed on April 29, 1996).
10.31 -- 1996 Incentive Plan of Mesa (incorporated by reference to Exhibit 10.28 to the Company's
Registration Statement on Form S-4, dated June 27, 1997, Registration No. 333-26951).
10.32 -- Mesa Management Severance Plan, dated April 4, 1997, including a Schedule of Participants
on Schedule A for the purpose of defining the payment of certain benefits upon the
termination of the officer's employment under certain circumstances (incorporated by
reference to Exhibit 10.29 to the Company's Registration Statement on Form S-4, dated
June 27, 1997, Registration No. 333-26951).
10.33 -- Parker & Parsley Petroleum Company Long-Term Incentive Plan, dated February 19, 1991,
(incorporated by reference to Exhibit 4.1 to Parker & Parsley's Registration Statement on
Form S-8, Registration No. 33-38971).
10.34 -- First Amendment to the Parker & Parsley Petroleum Company Long-Term Incentive Plan, dated
August 23, 1991 (incorporated by reference to Exhibit 10.2 to Parker & Parsley's
Registration Statement on Form S-1, dated February 28, 1992, Registration No. 33-46082).
</TABLE>
II-5
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.35 -- Agreement of Partnership of P&P Employees 89-B Conv., L.P. (formerly P&P Employees 89-B
GP), dated October 31, 1989, among Parker & Parsley, Ltd. and the Investor Partners (as
defined therein, which includes individuals who are directors and executive officers of
Parker & Parsley), together with a schedule identifying substantially identical documents
and setting forth the material details in which those documents differ from the foregoing
document (incorporated by reference to Exhibit 10.50 to Parker & Parsley's Registration
Statement on Form S-4, dated December 31, 1990, Registration No. 33-38436).
10.36 -- Amendment to Agreement of Partnership of P&P Employees 89-B GP, dated May 31, 1990, among
Parker & Parsley, Ltd. and the Investor Partners (as defined therein, which includes
individuals who are directors and executives officers of Parker & Parsley), together with a
schedule identifying substantially identical documents and setting forth the material
details in which those documents differ form the foregoing document (incorporated by
reference to Exhibit 10.51 to Parker & Parsley's Registration Statement on Form S-4, dated
December 31, 1990, Registration No. 33-38436).
10.37 -- Schedule identifying additional documents substantially identical to the Amendment to
Agreement of Partnership of P&P Employees 89-B GP included as Exhibit 10.5 and setting
forth the material details in which those documents differ from that document (incorporated
by reference to Exhibit 10.52 to Parker & Parsley's Registration Statement on Form S-1,
dated February 28, 1992, Registration No. 33-46082).
10.38 -- Agreement of Partnership of P&P Employees 90 Spraberry Private Development GP, dated
October 16, 1990, among Parker & Parsley, Ltd., James D. Moring, and the General Partners
(as defined therein, which includes individuals who are directors and executive officers of
Parker & Parsley), and form of Amendment to Agreement of Partnership of P&P Employees 90
Spraberry Private Development GP, together with a schedule identifying substantially
identical documents and setting forth the material details in which those documents differ
from the foregoing document (incorporated by reference to Exhibit 10.52 to Parker &
Parsley's Registration Statement on Form S-4, dated December 31, 1990, Registration No. 33-
38436).
10.39 -- Amendment to Agreement of Partnership of Parker & Parsley 90-A GP, dated February 19, 1991,
among Parker & Parsley Development Company and the Investor Partners (as defined therein,
which includes individuals who are directors and executive officers of Parker & Parsley),
together with a schedule identifying substantially identical documents and setting forth
the material details in which those documents differ from the foregoing document
(incorporated by reference to Exhibit 10.58 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No. 33-46082).
10.40 -- Agreement of Partnership of P&P Employees 91-A, GP, dated September 30, 1991, among Parker
& Parsley Development Company, James D. Moring, and the General Partners (as defined
therein, which includes individuals who are directors and executive officers of Parker &
Parsley), together with a schedule identifying substantially identical documents and
setting forth the material details in which those documents differ from the foregoing
document (incorporated by reference to Exhibit 10.61 to Parker & Parsley's Registration
Statement on Form S-1, dated February 28, 1992, Registration No. 33-46082).
10.41 -- Development Drilling Program Agreement of Parker & Parsley 91-A Development Drilling
Program, dated September 30, 1991, among Parker & Parsley Development Company, the P&P
Employee Participants (as defined therein, which includes individuals who are directors and
executive officers of Parker & Parsley), P&P Employees 91-A, GP, and Parker & Parsley 91-A,
L.P., together with a schedule identifying substantially identical documents and setting
forth the material details in which those documents differ from the foregoing document
(incorporated by reference to Exhibit 10.63 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No. 33-46082).
</TABLE>
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<PAGE> 34
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.42 -- Development Drilling Program Agreement, dated August 1, 1989, among Parker & Parsley, Ltd.,
Parker & Parsley Development Partners L.P., certain key employees of Parker & Parsley, Ltd.
(which includes individuals who are directors and executive officers of Parker & Parsley),
and related persons, P&P Employees 89-A GP, and Parker & Parsley 89-A, GP, and Parker &
Parsley 89-A, L.P., together with a schedule identifying substantially identical documents
and setting forth the material details in which those documents differ from the foregoing
document (incorporated by reference to Exhibit 10.56 to Parker & Parsley's Registration
Statement on Form S-4, dated December 31, 1990, Registration No. 33-38436).
10.43 -- Amendment to Development Drilling Program Agreement, dated February 19, 1991, amending the
Development Drilling Program Agreement included in Exhibit 10.11, together with a schedule
identifying substantially identical documents and setting forth the material details in
which those documents differ from the foregoing document (incorporated by reference to
Exhibit 10.66 to Parker & Parsley's Registration Statement on Form S-1, dated February 28,
1992, Registration No. 33-46082).
10.44 -- Amendment to Agreement of Partnership of P&P Employees 90 Spraberry Private Development GP,
dated April 22, 1991, among the Partners (as defined therein, which includes individuals
who are directors and executive officers of Parker & Parsley) (incorporated by reference to
Exhibit 10.67 to Parker & Parsley's Registration Statement on Form S-1, dated February 28,
1992, Registration No. 33-46082).
10.45 -- Agreement of Limited Partnership of Parker & Parsley 1992 Direct Investment Program, Ltd.,
dated as of July 24, 1992, among Parker & Parsley Development Company, as managing general
partner, and certain key employees of Parker & Parsley (including individuals who are
directors and executive officers of Parker & Parsley), as non-managing general partners and
limited partners (incorporated by reference to Exhibit 10.57 to Parker Parsley's Annual
Report on Form 10-K for the year ended December 31, 1993, Commission File No. 1-10695).
10.46 -- Agreement of Limited Partnership of Parker & Parsley 1993 Direct Investment Program, Ltd.,
dated as of January 1, 1993, among Parker & Parsley Development Company, as managing
general partner, and certain key employees of Parker & Parsley (including individuals who
are directors and executive officers of Parker & Parsley), as non-managing general partners
and limited partners (incorporated by reference to Exhibit 10.49 to Parker & Parsley's
Annual Report on Form 10-K for the year ended December 31, 1993, Commission File No. 1-
10695).
10.47 -- Agreement of Limited Partnership of Parker & Parsley 1994 Direct Investment Program, Ltd.,
dated as of January 1, 1994, among Parker & Parsley Development Company, as managing
general partner, and certain key employees of Parker & Parsley (including individuals who
are directors and executive officers of Parker & Parsley), as non-managing general partners
and limited partners (incorporated by reference to Exhibit 10.20 to Parker & Parsley's
Annual Report on Form 10-K for the year ended December 31, 1994, Commission File
No. 1-10695).
10.48** -- Stock Acquisition Loan Agreements entered into as of June 15, 1995, between Parker &
Parsley and Scott D. Sheffield, together with Schedule I identifying named executive
officers with substantially identical agreements providing for Parker & Parsley's loans to
such officers.
10.49 -- Omnibus Amendment to Nonstatutory Stock Option Agreements, included as part of the
Long-Term Incentive Plan, dated as of November 16, 1995, between Parker & Parsley and Named
Executive Officers identified on Schedule 1 setting forth additional details relating to
the Long-Term Incentive Plan (incorporated by reference to Parker & Parsley's Annual Report
on Form 10-K for the year ended December 31, 1995, Commission File No. 1-10695).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.50 -- Severance Agreement, dated as of August 8, 1997, between the Company and Scott D. Sheffield,
together with a schedule identifying substantially identical agreements between the Company and
each of the other named executive officers identified on Schedule I for the purpose of
defining the payment of certain benefits upon the termination of the officer's employment
under certain circumstances (incorporated by reference to Exhibit 10.7 to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1997, File No. 001-13245).
10.51 -- Indemnification Agreement, dated as of August 8, 1997, between the Company and Scott D.
Sheffield, together with a schedule identifying substantially identical agreements between
the Company and each of the Company's other directors and named executive officers identified on
Schedule I (incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1997, File No. 001-13245).
10.52 -- Pioneer Natural Resources Company Long-Term Incentive Plan (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form S-8, Registration No. 333-35087).
10.53 -- Pioneer Natural Resources Company Employee Stock Purchase Plan (incorporated by reference
to Exhibit 4.1 to the Company's Registration Statement on Form S-8, Registration No. 333-
35165).
10.54 -- Pioneer Natural Resources Company Deferred Compensation Retirement Plan (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8, Registration
No. 333- 39153).
10.55 -- Pioneer Natural Resources USA, Inc. 401(k) Plan (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form S-8, Registration No. 333-39249).
10.56 -- Credit Facility Agreement (Primary Facility), dated as of August 7, 1997, between Pioneer
USA, as Borrower, and NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as Documentation Agent, and
The Chase Manhattan Bank, as Syndication Agent; Bank of America Natural Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of Canada, Union
Bank of California, N.A., The Fuji Bank, Limited-Houston Agency and Wells Fargo Bank, N.A.,
as Co-Agents; and certain other lenders (incorporated by reference to Exhibit 10.1 to
the Company's Form 8-K, dated August 7, 1997, File No. 333-26951).
10.57 -- Credit Facility Agreement (364 Day Facility), dated as of August 7, 1997, between Pioneer
USA, as Borrower, and NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as Documentation Agent, and
The Chase Manhattan Bank, as Syndication Agent; Bank of America Natural Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of Canada, Union
Bank of California, N.A., The Fuji Bank, Limited-Houston Agency and Wells Fargo Bank, N.A.,
as Co-Agents; and certain other lenders (incorporated by reference to Exhibit 10.2 to
the Company's Form 8-K, dated August 7, 1997, File No. 333-26951).
12.1** -- Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
23.1** -- Consent of KPMG Peat Marwick LLP.
23.2** -- Consent of Arthur Andersen LLP.
23.3** -- Consent of Price Waterhouse, chartered accountants.
23.4** -- Consent of Coopers & Lybrand L.L.P.
23.5** -- Consent of Netherland, Sewell & Associates, Inc.
23.6** -- Consent of Williamson Petroleum Consultants, Inc.
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
23.7** -- Consent of Miller and Lents, Ltd.
23.8** -- Consent of Gilbert Lausten Jung Associates, Ltd.
23.9** -- Consent of Martin Petroleum and Associates.
23.10* -- Consent of Vinson & Elkins L.L.P. (included in the opinion filed as Exhibit 5.1 to this
Registration Statement).
24.1** -- Powers of Attorney of directors and officers of the Company (included on page II-11 to this
Registration Statement).
25.1* -- Form T-1 Statement for eligibility under the Trust Indenture Act of 1939 of trustee.
</TABLE>
- --------------------
* To be filed.
** Filed herewith.
ITEM 17 -- UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement.
(1) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (the "Securities Act");
(2) To reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement; and
(3) To include any material information with
respect to the plan of distribution not previously disclosed in
this Registration Statement or any material change to the
information in this Registration Statement;
Provided, however, that clauses (1) and (2) above do
not apply if the information required to be included in a
post-effective amendment by those clauses is contained in
periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference into this Registration Statement;
(b) That, for the purpose of determining any liability
under the Securities Act, each such post- effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of the securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered that
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-9
<PAGE> 37
The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the provisions described in Item 15 above or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by the director, officer, or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of the issue.
II-10
<PAGE> 38
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Irving, Texas, on December 12, 1997.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Scott D. Sheffield
----------------------------------------------------
Scott D. Sheffield, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby authorizes and appoints Scott D. Sheffield, Mark L. Withrow and M.
Garrett Smith, or any of them, as his attorney-in- fact to sign on his behalf
individually and in the capacity stated below all amendments and post-effective
amendments to this Registration Statement (including any additional
registration statement filed pursuant to Rule 462 of the Securities Act of 1933
with respect to this Registration Statement) as that attorney-in-fact may deem
necessary or appropriate.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C> <C>
/s/ I. Jon Brumley Chairman of the Board and Director December 12, 1997
----------------------
I. Jon Brumley
/s/ Scott D. Sheffield Director, President and Chief Executive Officer December 12, 1997
---------------------- (principal executive officer)
Scott D. Sheffield
/s/ M. Garrett Smith Executive Vice President and Chief Financial December 12, 1997
---------------------- Officer (principal financial and accounting
M. Garrett Smith officer)
/s/ R. Hartwell Gardner Director December 12, 1997
----------------------
R. Hartwell Gardner
/s/ Kenneth A. Hersh Director December 12, 1997
----------------------
Kenneth A. Hersh
/s/ James L. Houghton Director December 12, 1997
----------------------
James L. Houghton
/s/ Jerry P. Jones Director December 12, 1997
----------------------
Jerry P. Jones
/s/ Charles E. Ramsey, Jr. Director December 12, 1997
----------------------
Charles E. Ramsey, Jr.
/s/ Philip B. Smith Director December 12, 1997
----------------------
Philip B. Smith
/s/ Robert L. Stillwell Director December 12, 1997
----------------------
Robert L. Stillwell
/s/ Michael D. Wortley Director December 12, 1997
----------------------
Michael D. Wortley
</TABLE>
II-11
<PAGE> 39
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
1.1* -- Underwriting Agreement.
2.1 -- Amended and Restated Agreement and Plan of Merger, dated as of April 6, 1997, by and among
Mesa, Mesa Operating Co. ("MOC"), MXP Reincorporation Corp. and Parker & Parsley
(incorporated by reference to Exhibit 2.1 to the Company's Registration Statement on Form
S-4, dated June 27, 1997, Registration No. 333-26951).
2.2** -- Combination Agreement, dated as of September 3, 1997, between the Company and Chauvco.
2.3 -- Plan of Arrangement under Section 186 of the Business Corporations Act (Alberta)
(incorporated by reference to Annex E to the Definitive Joint Management Information
Circular and Proxy Statement of the Company and Chauvco Resources Ltd., File No. 001-13245,
filed with the SEC on November 17, 1997).
2.4 -- Form of Support Agreement between the Company and Pioneer Canada (incorporated by reference to
Annex H to the Definitive Joint Management Information Circular and Proxy Statement of the
Company and Chauvco Resources Ltd., File No. 001-13245, filed with the SEC on November 17,
1997).
2.5 -- Form of Voting and Exchange Trust Agreement among the Company, Pioneer Canada and Montreal
Trust Company of Canada, as Trustee (incorporated by reference to Pioneer's Current Report
on Form 8-K, File No. 001-13245, filed with the SEC on October 2, 1997).
2.6** -- Amended and Restated Shareholders Agreement, dated as of September 3, 1997, by and among
the Company and Guy J. Turcotte.
2.7 -- Shareholders Agreement, dated as of September 3, 1997, by and among the Company, Chauvco, DNR-
MESA Holdings, L.P. ("DNR"), Scott D. Sheffield and I. Jon Brumley (incorporated by
reference to Exhibit 2.3 to the Company's Current Report on Form 8-K, File No. 001-13245, filed
with the SEC on October 2, 1997).
2.8 -- Shareholders Agreement, dated as of September 3, 1997, by and among the Company, Trimac
Corporation and Gendis Inc. (incorporated by reference to Exhibit 2.4 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the SEC on October 2, 1997).
3.1 -- Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form S-4, Registration No. 333-26951).
3.2 -- Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-4, Registration No. 333-26951).
3.3** -- Certificate of Designations of Special Preferred Voting Stock.
3.4 -- Terms and Conditions of Exchangeable Shares (incorporated by reference to Annex F to the
Definitive Joint Management Information Circular and Proxy Statement of the Company and
Chauvco Resources Ltd., File No. 001-13245, filed with the SEC on November 17, 1997).
4.1 -- Form of Certificate of Common Stock, par value $.01 per share, of the Company (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4, Registration
No. 333-26951).
4.2** -- Form of Indenture between the Company and one or more commercial banks to be named, as trustee.
4.3* -- Form of Senior Debt Security.
4.4* -- Form of Subordinated Debt Security.
4.5* -- Form of Deposit Agreement.
4.6* -- Form of Depositary Receipt.
4.7* -- Form of Warrant Agreement.
4.8* -- Form of Warrant Certificate
5.1** -- Form of opinion of Vinson & Elkins L.L.P. as to the legality of the securities to be
registered.
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
9.1 -- Shareholder Agreement, dated as of April 6, 1997, between Mesa, Boone Pickens and Parker &
Parsley (incorporated by reference to Exhibit 2.4 of Mesa's Form 8-K filed April 8, 1997).
9.2 -- Shareholders Agreement, dated as of April 6, 1997, between DNR and Mesa (incorporated by
reference to Exhibit 2.2 of Mesa's Form 8-K filed April 8, 1997).
10.1 -- Indenture, dated July 2, 1996, among Pioneer Natural Resources USA, Inc. ("Pioneer USA")
(formerly MOC), as Issuer, the Company (Mesa's successor), as Guarantor, and Harris Trust and
Savings Bank, as Trustee, relating to the 11 5/8% Senior Subordinated Discount Notes Due
2006 (incorporated by reference to Exhibit 4.17 of Mesa's Form 10-Q dated August 13, 1996).
10.2 -- First Supplemental Indenture, dated as of April 15, 1997, among Pioneer USA (formerly MOC),
as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust and
Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit 10.1
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997, File No. 001-13245).
10.3 -- Second Supplemental Indenture, dated as of August 7, 1997, among Pioneer USA (formerly
MOC), as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust
and Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit
10.1 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1997, File No. 001-13245).
10.4 -- Indenture, dated July 2, 1996, among Pioneer USA (formerly MOC), as Issuer, the Company (Mesa's
successor), as Guarantor, and Harris Trust and Savings Bank, as Trustee, relating to 10
5/8% Senior Subordinated Notes Due 2006 (incorporated by reference to Exhibit 4.18 of
Mesa's Form 10-Q, dated August 13, 1996).
10.5 -- First Supplemental Indenture, dated as of April 15, 1997, among Pioneer USA (formerly MOC),
as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust and
Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit 10.4
(incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997, File No. 001-13245).
10.6 -- Second Supplemental Indenture, dated as of August 7, 1997, among Pioneer USA (formerly
MOC), as Issuer, Mesa, the subsidiary guarantors named therein, the Company, and Harris Trust
and Savings Bank, as Trustee, with respect to the indenture identified above as Exhibit
10.4 (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1997, File No. 001-13245).
10.7 -- Indentures relating to $50,000,000 principal amount of 8 1/2% Convertible Subordinated
Debentures due 2005 of Dorchester Master Limited Partnership ($3,762,000 principal amount
of which were outstanding and held by non affiliates at December 31, 1996) and $100,000,000
principal amount of 9 1/2% Senior Notes due 2000 of Bridge Oil (U.S.A.) Inc. ($2,063,000
principal amount of which were outstanding at December 31, 1996) have been omitted pursuant
to Item 601(b)(4)(iii)(A) of Regulation S-K. The Company hereby agrees to furnish a copy of
the indentures to the Securities and Exchange Commission upon request (incorporated by
reference to Parker & Parsley's Form 10-K, dated December 31, 1996).
10.8 -- Indenture, dated April 12, 1995, between Pioneer USA (successor to Parker & Parsley), and
The Chase Manhattan Bank (National Association), as Trustee (incorporated by reference to
Exhibit 4.1 to Parker & Parsley's Current Report on Form 8-K, dated April 12, 1995, File
No. 1-10695).
</TABLE>
<PAGE> 41
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.9 -- First Supplemental Indenture, dated as of August 7, 1997, among Parker & Parsley, The Chase
Manhattan Bank, as Trustee, and Pioneer USA, with respect to the indenture identified above
as Exhibit 10.8 (incorporated by reference to Exhibit 10.5 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1997, File No. 001-13245).
10.10 -- Form of 8 7/8% Senior Notes Due 2005, dated as of April 12, 1995, in the aggregate
principal amount of $150,000,000, together with Officers' Certificate dated April 12, 1995,
establishing the terms of the 8 7/8% Senior Notes Due 2005 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by reference to Exhibit 4.2 to Parker &
Parsley's Quarterly Report on Form 10-Q for the period ended June 30, 1995, File
No. 1-10695).
10.11 -- Form of 8 1/4% Senior Notes due 2007, dated as of August 22, 1995, in the aggregate
principal amount of $150,000,000, together with Officers' Certificate, dated August 22,
1995, establishing the terms of the 8 1/4% Senior Notes due 2007 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by reference to Exhibit 1.2 to Parker &
Parsley's Current Report on Form 8-K, dated August 17, 1995, File No. 1-10695).
10.12 -- Agreement of Sale between Pioneer Corporation and Cabot Corporation, dated August 29, 1984
(incorporated by reference to Exhibit 10.5 to Pioneer Corporation's Form 10-K, dated
December 31, 1985).
10.13 -- Settlement Agreement, dated March 15, 1989, by and among Mesa Operating Limited Partnership
and Mesa Limited Partnership, et al., Energas Company and the City of Amarillo
(incorporated by reference to Exhibit 10(k) to Mesa Limited Partnership's Form 10-K, dated
December 31, 1990).
10.14 -- Gas Purchase Agreement, dated December 1, 1989, between Williams Natural Gas Company and
Mesa Operating Limited Partnership acting on behalf of itself and as agent for Mesa
Midcontinent Limited Partnership (incorporated by reference to Exhibit 10.1 to Registration
Statement of Mesa Limited Partnership on Form S-3, Registration No. 33-32978).
10.15 -- "B" Contract Production Allocation Agreement, dated July 29, 1991, and effective as of
January 1, 1991, between Colorado Interstate Gas Company and Mesa Operating Limited
Partnership (incorporated by reference to Exhibit 10(r) to Mesa's Form 10-K, dated
December 31, 1991).
10.16 -- Amendment to "B" Contract Production Allocation Agreement effective as of January 1, 1993,
between Colorado Interstate Gas Company and Mesa Operating Limited Partnership
(incorporated by reference to Exhibit 10.24 to Mesa's Registration Statement on Form S-1,
Registration No. 033-51909).
10.17 -- Amended Peak Day Gas Purchase Agreement, dated effective June 19, 1991, between Colorado
Interstate Gas Company and Mesa Operating Limited Partnership (incorporated by reference to
Exhibit 10(t) to Mesa's Form 10-K, dated December 31, 1991).
10.18 -- Omnibus Amendment to Collateral Instruments to Supplemental Stipulation and Agreement,
dated June 19, 1991, between Colorado Interstate Gas Company and Mesa Operating Limited
Partnership (incorporated by reference to Exhibit 10(u) to Mesa's Form 10-K, dated
December 31, 1991).
10.19 -- Amarillo Supply Agreement between Mesa Operating Limited Partnership, Seller, and Energas
Company, a division of Atmos Energy Corporation, Buyer, dated effective January 2, 1993
(incorporated by reference to Exhibit 10.14 to Mesa's Form 10-K dated, December 31, 1995).
10.20 -- Gas Supply Agreement, dated May 11, 1994, between MOC, as successor to Mesa Operating
Limited Partnership, acting on behalf of itself and as agent for Hugoton Capital Limited
Partnership, and Williams Gas Marketing Company, and Gas Supply Guarantee, dated May 11,
1994 (incorporated by reference to Exhibit 10.16 to Mesa's Form 10-K, dated December 31,
1995).
</TABLE>
<PAGE> 42
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.21 -- Gas Transportation Agreement, dated June 14, 1994, between Western Resources, Inc. and MOC,
acting on behalf of itself and as agent for Hugoton Capital Limited Partnership
(incorporated by reference to Exhibit 10.24 to Mesa's Form 10-K, dated December 31, 1994).
10.22 -- 1991 Stock Option Plan of Mesa (incorporated by reference to Exhibit 10(v) to Mesa's Form
10-K, dated December 31, 1991).
10.23 -- Interruptible Gas Transportation and Sales Agreement, dated January 1, 1991, between Mesa
Operating Limited Partnership and Energas Company and Amendment, dated January 1, 1995
(incorporated by reference to Exhibit 10.22 to Mesa's Form 10-K, dated December 31, 1995).
10.24 -- "B" Contract Operating Agreement, dated January 1, 1988, between Mesa Operating Limited
Partnership and Colorado Interstate Gas Company (incorporated by reference to Exhibit 10.23
to Mesa's Form 10-K, dated December 31, 1995).
10.25 -- Gathering Agreement, dated May 29, 1987, between Mesa Operating Limited Partnership and
Colorado Interstate Gas Company (incorporated by reference to Exhibit 10.15 to the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 1997, File No.
001-13245).
10.26 -- Amendment to Gathering Agreement, dated July 15, 1990, between Colorado Interstate Gas
Company and Mesa Operating Limited Partnership (incorporated by reference to Exhibit 10.24
to Mesa's Form 10-K, dated December 31, 1995).
10.27 -- Amendment to 1990 Gathering Agreement Amendment, dated September 1, 1997, between Colorado
Interstate Gas Company and Pioneer USA (incorporated by reference to Exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 1997,
File No. 001-13245).
10.28 -- Gas Purchase Agreement, dated January 1, 1996, between MOC, as Seller, and KN Marketing
L.P., as Buyer, and Amendment, dated August 1, 1995 (incorporated by reference to
Exhibit 10.25 to Mesa's Form 10-K, dated December 31, 1995).
10.29 -- Employment Agreement, dated as of August 21, 1996, between Mesa and I. Jon Brumley
(incorporated by reference to Exhibit 10.26 of Mesa's Form 10-K, dated December 31, 1996).
10.30 -- Stock Purchase Agreement, dated April 26, 1996, between Mesa and DNR (incorporated by
reference to Exhibit No. 10 to Mesa's Form 8-K filed on April 29, 1996).
10.31 -- 1996 Incentive Plan of Mesa (incorporated by reference to Exhibit 10.28 to the Company's
Registration Statement on Form S-4, dated June 27, 1997, Registration No. 333-26951).
10.32 -- Mesa Management Severance Plan, dated April 4, 1997, including a Schedule of Participants
on Schedule A for the purpose of defining the payment of certain benefits upon the
termination of the officer's employment under certain circumstances (incorporated by
reference to Exhibit 10.29 to the Company's Registration Statement on Form S-4, dated
June 27, 1997, Registration No. 333-26951).
10.33 -- Parker & Parsley Petroleum Company Long-Term Incentive Plan, dated February 19, 1991,
(incorporated by reference to Exhibit 4.1 to Parker & Parsley's Registration Statement on
Form S-8, Registration No. 33-38971).
10.34 -- First Amendment to the Parker & Parsley Petroleum Company Long-Term Incentive Plan, dated
August 23, 1991 (incorporated by reference to Exhibit 10.2 to Parker & Parsley's
Registration Statement on Form S-1, dated February 28, 1992, Registration No. 33-46082).
</TABLE>
<PAGE> 43
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.35 -- Agreement of Partnership of P&P Employees 89-B Conv., L.P. (formerly P&P Employees 89-B
GP), dated October 31, 1989, among Parker & Parsley, Ltd. and the Investor Partners (as
defined therein, which includes individuals who are directors and executive officers of
Parker & Parsley), together with a schedule identifying substantially identical documents
and setting forth the material details in which those documents differ from the foregoing
document (incorporated by reference to Exhibit 10.50 to Parker & Parsley's Registration
Statement on Form S-4, dated December 31, 1990, Registration No. 33-38436).
10.36 -- Amendment to Agreement of Partnership of P&P Employees 89-B GP, dated May 31, 1990, among
Parker & Parsley, Ltd. and the Investor Partners (as defined therein, which includes
individuals who are directors and executives officers of Parker & Parsley), together with a
schedule identifying substantially identical documents and setting forth the material
details in which those documents differ form the foregoing document (incorporated by
reference to Exhibit 10.51 to Parker & Parsley's Registration Statement on Form S-4, dated
December 31, 1990, Registration No. 33-38436).
10.37 -- Schedule identifying additional documents substantially identical to the Amendment to
Agreement of Partnership of P&P Employees 89-B GP included as Exhibit 10.5 and setting
forth the material details in which those documents differ from that document (incorporated
by reference to Exhibit 10.52 to Parker & Parsley's Registration Statement on Form S-1,
dated February 28, 1992, Registration No. 33-46082).
10.38 -- Agreement of Partnership of P&P Employees 90 Spraberry Private Development GP, dated
October 16, 1990, among Parker & Parsley, Ltd., James D. Moring, and the General Partners
(as defined therein, which includes individuals who are directors and executive officers of
Parker & Parsley), and form of Amendment to Agreement of Partnership of P&P Employees 90
Spraberry Private Development GP, together with a schedule identifying substantially
identical documents and setting forth the material details in which those documents differ
from the foregoing document (incorporated by reference to Exhibit 10.52 to Parker &
Parsley's Registration Statement on Form S-4, dated December 31, 1990, Registration No. 33-
38436).
10.39 -- Amendment to Agreement of Partnership of Parker & Parsley 90-A GP, dated February 19, 1991,
among Parker & Parsley Development Company and the Investor Partners (as defined therein,
which includes individuals who are directors and executive officers of Parker & Parsley),
together with a schedule identifying substantially identical documents and setting forth
the material details in which those documents differ from the foregoing document
(incorporated by reference to Exhibit 10.58 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No. 33-46082).
10.40 -- Agreement of Partnership of P&P Employees 91-A, GP, dated September 30, 1991, among Parker
& Parsley Development Company, James D. Moring, and the General Partners (as defined
therein, which includes individuals who are directors and executive officers of Parker &
Parsley), together with a schedule identifying substantially identical documents and
setting forth the material details in which those documents differ from the foregoing
document (incorporated by reference to Exhibit 10.61 to Parker & Parsley's Registration
Statement on Form S-1, dated February 28, 1992, Registration No. 33-46082).
10.41 -- Development Drilling Program Agreement of Parker & Parsley 91-A Development Drilling
Program, dated September 30, 1991, among Parker & Parsley Development Company, the P&P
Employee Participants (as defined therein, which includes individuals who are directors and
executive officers of Parker & Parsley), P&P Employees 91-A, GP, and Parker & Parsley 91-A,
L.P., together with a schedule identifying substantially identical documents and setting
forth the material details in which those documents differ from the foregoing document
(incorporated by reference to Exhibit 10.63 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No. 33-46082).
</TABLE>
<PAGE> 44
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.42 -- Development Drilling Program Agreement, dated August 1, 1989, among Parker & Parsley, Ltd.,
Parker & Parsley Development Partners L.P., certain key employees of Parker & Parsley, Ltd.
(which includes individuals who are directors and executive officers of Parker & Parsley),
and related persons, P&P Employees 89-A GP, and Parker & Parsley 89-A, GP, and Parker &
Parsley 89-A, L.P., together with a schedule identifying substantially identical documents
and setting forth the material details in which those documents differ from the foregoing
document (incorporated by reference to Exhibit 10.56 to Parker & Parsley's Registration
Statement on Form S-4, dated December 31, 1990, Registration No. 33-38436).
10.43 -- Amendment to Development Drilling Program Agreement, dated February 19, 1991, amending the
Development Drilling Program Agreement included in Exhibit 10.11, together with a schedule
identifying substantially identical documents and setting forth the material details in
which those documents differ from the foregoing document (incorporated by reference to
Exhibit 10.66 to Parker & Parsley's Registration Statement on Form S-1, dated February 28,
1992, Registration No. 33-46082).
10.44 -- Amendment to Agreement of Partnership of P&P Employees 90 Spraberry Private Development GP,
dated April 22, 1991, among the Partners (as defined therein, which includes individuals
who are directors and executive officers of Parker & Parsley) (incorporated by reference to
Exhibit 10.67 to Parker & Parsley's Registration Statement on Form S-1, dated February 28,
1992, Registration No. 33-46082).
10.45 -- Agreement of Limited Partnership of Parker & Parsley 1992 Direct Investment Program, Ltd.,
dated as of July 24, 1992, among Parker & Parsley Development Company, as managing general
partner, and certain key employees of Parker & Parsley (including individuals who are
directors and executive officers of Parker & Parsley), as non-managing general partners and
limited partners (incorporated by reference to Exhibit 10.57 to Parker Parsley's Annual
Report on Form 10-K for the year ended December 31, 1993, Commission File No. 1-10695).
10.46 -- Agreement of Limited Partnership of Parker & Parsley 1993 Direct Investment Program, Ltd.,
dated as of January 1, 1993, among Parker & Parsley Development Company, as managing
general partner, and certain key employees of Parker & Parsley (including individuals who
are directors and executive officers of Parker & Parsley), as non-managing general partners
and limited partners (incorporated by reference to Exhibit 10.49 to Parker & Parsley's
Annual Report on Form 10-K for the year ended December 31, 1993, Commission File No. 1-
10695).
10.47 -- Agreement of Limited Partnership of Parker & Parsley 1994 Direct Investment Program, Ltd.,
dated as of January 1, 1994, among Parker & Parsley Development Company, as managing
general partner, and certain key employees of Parker & Parsley (including individuals who
are directors and executive officers of Parker & Parsley), as non-managing general partners
and limited partners (incorporated by reference to Exhibit 10.20 to Parker & Parsley's
Annual Report on Form 10-K for the year ended December 31, 1994, Commission File
No. 1-10695).
10.48** -- Stock Acquisition Loan Agreements entered into as of June 15, 1995, between Parker &
Parsley and Scott D. Sheffield, together with Schedule I identifying named executive
officers with substantially identical agreements providing for Parker & Parsley's loans to
such officers.
10.49 -- Omnibus Amendment to Nonstatutory Stock Option Agreements, included as part of the
Long-Term Incentive Plan, dated as of November 16, 1995, between Parker & Parsley and Named
Executive Officers identified on Schedule 1 setting forth additional details relating to
the Long-Term Incentive Plan (incorporated by reference to Parker & Parsley's Annual Report
on Form 10-K for the year ended December 31, 1995, Commission File No. 1-10695).
</TABLE>
<PAGE> 45
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
10.50 -- Severance Agreement, dated as of August 8, 1997, between the Company and Scott D. Sheffield,
together with a schedule identifying substantially identical agreements between the Company and
each of the other named executive officers identified on Schedule I for the purpose of
defining the payment of certain benefits upon the termination of the officer's employment
under certain circumstances (incorporated by reference to Exhibit 10.7 to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1997, File No. 001-13245).
10.51 -- Indemnification Agreement, dated as of August 8, 1997, between the Company and Scott D.
Sheffield, together with a schedule identifying substantially identical agreements between
the Company and each of the Company's other directors and named executive officers identified on
Schedule I (incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1997, File No. 001-13245).
10.52 -- Pioneer Natural Resources Company Long-Term Incentive Plan (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form S-8, Registration No. 333-35087).
10.53 -- Pioneer Natural Resources Company Employee Stock Purchase Plan (incorporated by reference
to Exhibit 4.1 to the Company's Registration Statement on Form S-8, Registration No. 333-
35165).
10.54 -- Pioneer Natural Resources Company Deferred Compensation Retirement Plan (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8, Registration
No. 333- 39153).
10.55 -- Pioneer Natural Resources USA, Inc. 401(k) Plan (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form S-8, Registration No. 333-39249).
10.56 -- Credit Facility Agreement (Primary Facility), dated as of August 7, 1997, between Pioneer
USA, as Borrower, and NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as Documentation Agent, and
The Chase Manhattan Bank, as Syndication Agent; Bank of America Natural Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of Canada, Union
Bank of California, N.A., The Fuji Bank, Limited-Houston Agency and Wells Fargo Bank, N.A.,
as Co-Agents; and certain other lenders (incorporated by reference to Exhibit 10.1 to
the Company's Form 8-K, dated August 7, 1997, File No. 333-26951).
10.57 -- Credit Facility Agreement (364 Day Facility), dated as of August 7, 1997, between Pioneer
USA, as Borrower, and NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as Documentation Agent, and
The Chase Manhattan Bank, as Syndication Agent; Bank of America Natural Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of Canada, Union
Bank of California, N.A., The Fuji Bank, Limited-Houston Agency and Wells Fargo Bank, N.A.,
as Co-Agents; and certain other lenders (incorporated by reference to Exhibit 10.2 to
the Company's Form 8-K, dated August 7, 1997, File No. 333-26951).
12.1** -- Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
23.1** -- Consent of KPMG Peat Marwick LLP.
23.2** -- Consent of Arthur Andersen LLP.
23.3** -- Consent of Price Waterhouse, chartered accountants.
23.4** -- Consent of Coopers & Lybrand L.L.P.
23.5** -- Consent of Netherland, Sewell & Associates, Inc.
23.6** -- Consent of Williamson Petroleum Consultants, Inc.
</TABLE>
<PAGE> 46
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
23.7** -- Consent of Miller and Lents, Ltd.
23.8** -- Consent of Gilbert Lausten Jung Associates, Ltd.
23.9** -- Consent of Martin Petroleum and Associates.
23.10* -- Consent of Vinson & Elkins L.L.P. (included in the opinion filed as Exhibit 5.1 to this
Registration Statement).
24.1** -- Powers of Attorney of directors and officers of the Company (included on page II-11 to this
Registration Statement).
25.1* -- Form T-1 Statement for eligibility under the Trust Indenture Act of 1939 of trustee.
</TABLE>
- --------------------
* To be filed.
** Filed herewith.
<PAGE> 1
Exhibit 2.2
COMBINATION AGREEMENT
THIS COMBINATION AGREEMENT (this "Agreement") is entered into as of
September 3, 1997, by and between Pioneer Natural Resources Company, a Delaware
corporation ("US Co"), and Chauvco Resources Ltd., an Alberta corporation
("Chauvco").
RECITALS
WHEREAS, the respective boards of directors of US Co and Chauvco have
approved the transactions contemplated by this Agreement, and have agreed to
submit the applicable transactions included in the Plan of Arrangement (as
defined in Section 1.1) and other transactions contemplated hereby to their
respective shareholders for approval.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1
GENERAL
1.1 PLAN OF ARRANGEMENT
As promptly as practicable after the execution of this Agreement,
Chauvco will apply to the Court of Queen's Bench of Alberta (the "Court")
pursuant to Part 15 of the Business Corporations Act (Alberta) (the "ABCA") for
an interim order (the "Interim Order") providing for, among other things, the
calling and holding of the Chauvco Meeting (as hereinafter defined) for the
purpose of considering and, if deemed advisable, approving the arrangement (the
"Arrangement") under Part 15 of the ABCA and pursuant to this Agreement and the
Plan of Arrangement substantially in the form of Exhibit A hereto (the "Plan of
Arrangement"). If the Chauvco shareholders approve the Arrangement, thereafter
Chauvco will take the necessary steps to submit the Arrangement to the Court
and apply for a final order of the Court approving the Arrangement in such
fashion as the Court may direct (the "Final Order") and file Articles of
Arrangement in respect of the Arrangement. At 12:01 a.m. (the "Effective Time")
on the date (the "Effective Date") shown on the certificate of arrangement
issued by the Registrar under the ABCA giving effect to the Arrangement (which
shall be within 60 days after the date of the Final Order), the following shall
occur and shall be deemed to occur in the following order without any further
act or formality:
(a) Chauvco shall subscribe for that number of common shares in the
capital of Chauvco Resources International Ltd. ("CRI") as is equal to (i) the
number of common shares of Chauvco (the "Chauvco Common Shares") which are
issued and outstanding three trading days prior to the Effective Date (the
"Record Date"), (ii) plus that number of Chauvco Common Shares which all
Optionholders (as hereinafter defined) would otherwise be entitled to acquire
on the exercise of their Chauvco Options (as hereinafter defined) on a fully
vested basis on the Record Date (other than Chauvco Common Shares that could be
acquired by Optionholders who exercise their right of dissent in accordance
with the Interim Order and who are ultimately entitled to be paid the fair
value of their Chauvco Options), (iii) less that number of common shares of CRI
then held by Chauvco, and (iv) less that number of Chauvco Common Shares held
by shareholders who have exercised their rights of dissent in accordance with
the Interim Order and who are ultimately entitled to be paid the
<PAGE> 2
- 2 -
fair value for such shares. The subscription price for the common shares of CRI
shall be paid for in cash in the aggregate amount equal to US$5,000,000 plus
the fair market value on the Effective Date (as determined and adjusted in
accordance with Section 7.7) of the Gabon Securities (as hereinafter defined);
(b) CRI shall purchase from CR International Limited ("CR"), a
wholly-owned subsidiary of Chauvco, for cash in an aggregate amount equal to
the fair market value thereof on the Effective Date (as determined and adjusted
in accordance with Section 7.7), (i) all of the issued and outstanding
securities of Chauvco Resources (Gabon) S.A., Chauvco Resources (Gabon-Ngalo)
S.A., Chauvco Resources (Gabon-Maga) S.A., Chauvco Resources (Gabon-Avomo) S.A.
and CR Trading Co. Ltd. (collectively, the "Gabon Subsidiaries"), (ii) 75% of
the issued and outstanding securities of Westoil Marine & Transport Co. Ltd.
("Westoil"), and (iii) all of its rights under a loan in the amount of U.S.
$909,421.60 made by CR to Olympic Marine Services International, Inc. (which
owns the remaining 25% of the issued and outstanding securities of Westoil),
any and all advances made by CR to Westoil, and any and all advances made by
Chauvco (all of which shall have first been assigned by Chauvco to CR) to the
Gabon Subsidiaries and Westoil (such securities in Section 1.1(b)(i), (ii) and
(iii) collectively, the "Gabon Securities");
(c) Chauvco shall transfer, assign and convey to CRI, in consideration
for $1.00, all of Chauvco's right, title, benefit and interest in and to any
and all trademarks (including registrations and applications therefor), trade
names and the internet domain name "chauvco.com" owned by Chauvco as at the
Effective Time, and the other assets and property which are set out in Exhibit
F;
(d) US Co Sub (as hereinafter defined) shall purchase from Chauvco all
of the issued and outstanding common shares of CRI (the "CRI Shares") in
consideration of the payment by way of promissory note of US Co Sub to Chauvco
in an amount equal to the subscription price paid for such CRI Shares by
Chauvco under Section 1.1(a);
(e) each of the outstanding options to purchase Chauvco Common Shares
other than options held by a holder who has exercised its right of dissent in
accordance with the Interim Order and is ultimately entitled to be paid the
fair value of its options (collectively, the "Chauvco Options") (which includes
all outstanding options granted under Chauvco's stock option plan as amended
and restated on November 10, 1995 (the "Chauvco Option Plan")) will vest, if
not already vested, and be transferred to US Co Sub in consideration for one
(1) CRI Share and, in accordance with the election of each holder thereof (the
"Optionholder") and the remainder of this Section 1.1(e) and Section 1.1(f), a
number of shares of US Co common stock ("US Co Common Stock") determined in
accordance with the Exchange Ratio (as hereinafter defined) in which event, in
addition to transferring the Chauvco Options to US Co Sub, the Optionholder
will be required to make a payment to US Co Sub (the "Option Payment") in an
amount equal to the aggregate exercise price which the Optionholder would
otherwise be required to pay on the exercise of such options. As an alternative
to making the Option Payment, Optionholders will be entitled to elect to reduce
the number of shares of US Co Common Stock to be received by the number
obtained by dividing the Option Payment by the US Co Stock Price, as defined in
Section 1.3 (converted into Canadian dollars using the Currency Exchange Rate
(as hereinafter defined)). Each Optionholder will receive only a whole number
of shares of US Co Common Stock resulting from the transfer of his Chauvco
Options. In lieu of fractional shares of US Co Common Stock, each Optionholder
who would otherwise be entitled to receive such fractional shares shall be paid
by US Co Sub an amount
<PAGE> 3
- 3 -
determined in accordance with the Plan of Arrangement in full satisfaction of
such fractional entitlement;
(f) an Optionholder electing to make the Option Payment and receive
the applicable number of shares of US Co Common Stock under Section 1.1(e)
above shall give effect to the election by depositing with Montreal Trust
Company of Canada (the "Depositary"), prior to the date which is two (2) days
prior to the date of the Chauvco Meeting (the "Election Deadline"), a duly
completed letter of transmittal and election form (the "Option Letter of
Transmittal and Election Form") in the form provided by Chauvco along with the
proxy materials indicating such holder's election and by agreeing to pay the
Option Payment to the Depositary as agent for US Co Sub. Coincident with the
receipt of the CRI Shares and shares of US Co Common Stock, such Optionholder
shall pay the Option Payment to the Depositary as agent for US Co Sub less any
amounts receivable by such Optionholder in connection with fractional
entitlements under the Plan of Arrangement. In the event that an Optionholder
who has elected to make the Option Payment fails to make the Option Payment on
or before the day that is 60 days after the Effective Date, such Optionholder
shall be deemed to have elected the option to receive the reduced number of
shares of US Co Common Stock by not making the Option Payment. In the event
that an Optionholder has failed to validly make an election in the Option
Letter of Transmittal and Election Form pursuant to this paragraph, such
Optionholder shall be deemed to have elected the option to receive the reduced
number of shares of US Co Common Stock by not making the Option Payment;
(g) each of the outstanding Chauvco Common Shares that are not held by
a shareholder who has exercised its right of dissent in accordance with the
Interim Order and is ultimately entitled to be paid the fair value of its
Chauvco Common Shares will be transferred to US Co Sub in consideration for one
(1) CRI Share and, at the election of the holders of the Chauvco Common Shares:
(i) a number of shares of US Co Common Stock determined
in accordance with the Exchange Ratio. Each such
holder of Chauvco Common Shares will receive only a
whole number of shares of US Co Common Stock
resulting from the transfer of such holder's Chauvco
Common Shares to US Co Sub. In lieu of fractional
shares of US Co Common Stock, each holder of a
Chauvco Common Share who otherwise would be entitled
to receive such fractional share shall be paid by US
Co Sub an amount determined in accordance with the
Plan of Arrangement in full satisfaction of such
fractional entitlement; or
(ii) a number of shares of Exchangeable Shares determined
in accordance with the Exchange Ratio. Each such
holder of Chauvco Common Shares will receive only a
whole number of Exchangeable Shares resulting from
the transfer of such holder's Chauvco Common Shares
to US Co Sub. In lieu of fractional Exchangeable
Shares, each holder of a Chauvco Common Share who
otherwise would be entitled to receive such
fractional share shall be paid by US Co Sub an
amount determined in accordance with the Plan of
Arrangement in full satisfaction of such fractional
entitlement;
<PAGE> 4
- 4 -
provided that such holders shall be entitled to elect
to receive a combination of shares of US Co Common
Stock and Exchangeable Shares on the transfer of
their Chauvco Common Shares;
(h) a holder of Chauvco Common Shares shall give effect to the
election in Section 1.1(g) above by depositing with the Depositary, prior to
the Election Deadline, a duly completed letter of transmittal and election form
(the "Letter of Transmittal and Election Form") in the form provided by Chauvco
along with the proxy materials indicating such holder's election. In the event
that a holder of Chauvco Common Shares has failed to validly make an election
under Section 1.1(g) in the Letter of Transmittal and Election Form pursuant to
this paragraph, such holder shall be deemed to have elected the option under
Section 1.1(g)(i). Notwithstanding any provision to the contrary, holders of
Chauvco Common Shares who are not residents of Canada for the purposes of the
Income Tax Act (Canada) (the "ITA") will not be entitled to elect to receive
Exchangeable Shares under Section 1.1(g)(ii);
(i) upon the transfer of shares referred to in Section 1.1(g) above:
(i) each holder of a Chauvco Common Share shall cease to be such a holder,
shall have his name removed from the register of holders of Chauvco Common
Shares and shall become a holder of the number of fully paid CRI Shares and
Exchangeable Shares and/or shares of US Co Common Stock to which he is entitled
as a result of the transfer of shares referred to in Section 1.1(g) and such
holder's name shall be added to the register of holders of such securities
accordingly; and (ii) US Co Sub shall become the legal and beneficial owner of
all of the Chauvco Common Shares so transferred;
(j) holders of Chauvco Common Shares who are residents of Canada for
the purposes of the ITA and who have elected to receive Exchangeable Shares
under Section 1.1(g)(ii) above shall be entitled to make an income tax election
pursuant to subsection 85(1) of the ITA with respect to the transfer of their
Chauvco Common Shares to US Co Sub referred to in Section 1.1(g)(ii) by
providing two signed copies of the necessary election forms to US Co Sub within
90 days following the Effective Date, duly completed with the details of the
number of shares transferred and the applicable agreed amounts for the purposes
of such elections. Thereafter, subject to the election forms complying with the
provisions of the ITA, the forms will be signed by US Co Sub and returned to
such holders of Chauvco Common Shares for filing with Revenue Canada, Customs,
Excise and Taxation;
(k) US Co shall issue to and deposit with the Depositary the Voting
Share (as defined in the Voting and Exchange Trust Agreement (as defined
herein)), in consideration of the payment to US Co of US $1, to be hereafter
held of record by the Depositary as trustee for and on behalf of, and for the
use and benefit of, the holders of the Exchangeable Shares, in accordance with
the Voting and Exchange Trust Agreement; and
(l) US Co Sub shall be continued as a corporation under the ABCA and
its Articles of Continuance shall include the items set forth in Exhibit G.
1.2 US CO SUB
(a) On or prior to the Effective Date, US Co shall (directly or
through a wholly-owned subsidiary incorporated in the United States)
incorporate a new corporation under the Company Act
<PAGE> 5
- 5 -
(British Columbia) ("US Co Sub") to be named Pioneer Natural Resources (Canada)
Ltd. and shall include the following provisions in its memorandum of
association (or as may be amended by mutual agreement on the advice of outside
counsel to comply with the Company Act):
(i) a class of common voting shares (the "US Co Sub
Common Shares") unlimited in number;
(ii) a class of exchangeable shares (the "Exchangeable
Shares") unlimited in number; and
(iii) a restriction on the business of US Co Sub;
all as set out in Exhibit G and, in connection with such incorporation, US Co
shall (directly or through a wholly-owned subsidiary incorporated in the United
States) cause US Co Sub to purchase from US Co that number of newly issued
shares of US Co Common Stock which will enable US Co Sub to satisfy its
obligation to deliver US Co Common Stock to holders of Chauvco Common Shares
and to Optionholders who transfer their Chauvco Common Shares or Chauvco
Options to US Co Sub under Sections 1.1(g)(i) and 1.1(e) above.
(b) US Co shall cause US Co Sub to complete the transactions
contemplated herein.
1.3 EXCHANGE RATIO
As used herein, the term "Exchange Ratio" means in respect of
Exchangeable Shares or US Co Common Stock to be delivered upon the transfer of
Chauvco Common Shares or Chauvco Options to US Co Sub, a ratio of the number of
Exchangeable Shares or shares of US Co Common Stock per Chauvco Common Share or
Chauvco Option equal to:
(a) if the US Co Stock Price is less than US$33.50, (.493827);
(b) if the US Co Stock Price is at least US$33.50 but less than
US$39.01,
.493827 - ((US Co Stock Price - 33.50) X .042360)
5.51
and
(c) if the US Co Stock Price is equal to or greater than $39.01,
(.451467).
The Exchange Ratio as so determined in each case shall be rounded to six
decimal places. The "US Co Stock Price" shall mean the average closing sales
price, regular way, per share of the US Co Common Stock on the NYSE in United
States dollars as reported in the Wall Street Journal over the ten (10)
consecutive trading days ending on the third trading day next preceding the
date of the Chauvco Meeting. Notwithstanding the foregoing, if the Exchange
Ratio is above .465116, US Co may elect to cause US Co Sub to deliver, in lieu
of Exchangeable Shares and shares of US Co Common Stock, a number of
Exchangeable Shares or shares of US Co Common Stock for each Chauvco Common
Share or Chauvco Option based on the Exchange Ratio as set forth above equal
<PAGE> 6
- 6 -
to (.465116) and an amount in cash (in Canadian dollars) per Chauvco Common
Share or Chauvco Option equal to the product of (x) the US Co Stock Price
multiplied by the noon spot rate of exchange of US dollars to Canadian dollars
announced by the Bank of Canada on the day preceding the date of calculation
for the exchange (the "Currency Exchange Rate") and (y)
Exchange Ratio -- .465116
1.4 ADJUSTMENTS FOR CAPITAL CHANGES
Prior to the Effective Time, Chauvco shall not recapitalize through a
subdivision of its outstanding shares into a greater number of shares, or a
combination of its outstanding shares into a lesser number of shares, or
reorganize, reclassify or otherwise change its outstanding shares into the same
or a different number of shares of other classes, or declare a dividend on its
outstanding shares payable in shares of its capital stock or securities
convertible or exchangeable into shares of its capital stock. Prior to the
Effective Time, US Co may with prior written consent of Chauvco recapitalize
through a subdivision of its outstanding shares into a greater number of
shares, or a combination of its outstanding shares into a lesser number of
shares, or reorganize, reclassify or otherwise change its outstanding shares
into the same or a different number of shares of other classes, or declare a
dividend on its outstanding shares payable in shares of its capital stock or
securities convertible or exchangeable into shares of its capital stock,
provided that, in connection therewith the Exchange Ratio shall be adjusted
appropriately so as to maintain the relative proportionate interests of the
holders of Chauvco Common Shares and the holders of the shares of US Co Common
Stock and provided further that, the consent of Chauvco may not be withheld if
the foregoing proviso is complied with. No such changes shall be made by US Co
other than those made in accordance with this Agreement.
1.5 DISSENTING SHAREHOLDERS
Holders of Chauvco Common Shares may exercise rights of dissent with
respect to such shares in connection with the Arrangement pursuant to and in
the manner set forth in Section 184 of the ABCA and Section 3.1 of the Plan of
Arrangement (such holders referred to as "Dissenters" or as "Dissenting
Shareholders"). Chauvco shall give US Co (i) prompt notice of any written
demands of a right of dissent, withdrawals of such demands, and any other
instruments served pursuant to the ABCA and received by Chauvco and (ii) the
opportunity to participate in all negotiations and proceedings with respect to
such rights. Without the prior written consent of US Co, except as required by
applicable law, Chauvco shall not make any payment with respect to any such
rights or offer to settle or settle any such rights. The obligations in respect
of Dissenting Shareholders shall be apportioned between Chauvco and CRI as set
forth in the Plan of Arrangement.
1.6 OTHER EFFECTS OF THE ARRANGEMENT
The Arrangement will, from and after the Effective Time, have all of
the effects provided by applicable law, including, without limitation, the
ABCA.
<PAGE> 7
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1.7 JOINT PROXY STATEMENT; FORM F-4, FORM S-4 AND FORM S-3 REGISTRATION
STATEMENT
(a) As promptly as practicable after execution of this Agreement, US
Co and Chauvco shall prepare and file with the United States Securities and
Exchange Commission (the "SEC") a preliminary joint management information
circular and proxy statement (the "Joint Proxy Statement"), together with any
other documents required by the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in connection with the Arrangement and the other transactions
contemplated hereby. The Joint Proxy Statement shall constitute (i) the
management information circular of Chauvco with respect to the meeting of
shareholders of Chauvco relating to the Arrangement and the approval of certain
matters in connection therewith (the "Chauvco Meeting") and (ii) the proxy
statement of US Co with respect to the meeting of stockholders of US Co with
respect to the issuance of US Co Common Stock from time to time upon exchange
of Exchangeable Shares and any other matters requiring approval of such
stockholders in connection with the Arrangement (the "US Co Stockholders
Meeting"). As promptly as practicable after the preliminary Joint Proxy
Statement is cleared by the SEC, US Co and Chauvco shall cause the Joint Proxy
Statement to be mailed to each company's respective stockholders. If either
Chauvco or US Co determines on the advice of its outside counsel (with the
concurrence of outside counsel for the other) that the offer and sale of the
Exchangeable Shares or the CRI Shares in connection with the Arrangement is
required to be registered under the Securities Act, then as applicable, US Co
shall cause US Co Sub to file with the SEC a registration statement on Form S-4
(or other applicable form) (such registration statement, the "Form S-4") and if
it is determined that the offer and sale of the CRI Shares is not otherwise
exempt from such registration, Chauvco and US Co shall (a) agree on appropriate
and equitable adjustments to the Plan of Arrangement so that CRI Shares that
would otherwise be issued to holders who are residents of the United States
shall instead be sold by a trustee or agent and the net proceeds of such sales
remitted to such holders and otherwise as may be necessary to avoid offers and
sales of the CRI Shares being deemed to take place within the United States, if
such adjustments will avoid the necessity for such registration or (b) if such
adjustments cannot reasonably be undertaken so as to avoid the necessity for
such registration, Chauvco shall cause CRI to file with the SEC a registration
statement on Form F-4 (or other applicable form) covering such offer and sale
(such registration statement, the "Form F-4") and the Joint Proxy Statement
shall also constitute the prospectuses of US Co Sub and CRI, as applicable,
with respect to such offer and sale and shall be included in the Form S-4 or
Form F-4, as applicable. Notwithstanding anything herein to the contrary,
neither Chauvco nor US Co shall be under any obligation to cause to be filed
the Form S-4 or Forms F-4 if it shall have determined on the advice of its
outside counsel (with the concurrence of outside counsel for the other) that
the offer and sale of the Exchangeable Shares and the CRI Shares pursuant to
the Arrangement is exempt from the registration requirements of Section 5 of
the Securities Act by virtue of Section 3(a)(10) thereof. In connection with
such determination, US Co and Chauvco shall prepare and file with the SEC a
request for no action (the "No Action Request") seeking to confirm the
availability of such exemption. If US Co determines on the advice of its
outside counsel (with the concurrence of outside counsel for Chauvco) that it
is necessary to file a registration statement on Form S-3 (or other applicable
form)(the "Form S-3") in order to register the US Co Common Stock to be issued
from time to time after the Effective Time upon exchange of the Exchangeable
Shares, then US Co shall file the Form S-3 with the SEC and use its best
efforts to maintain the effectiveness of such registration for the period that
such Exchangeable Shares remain outstanding, and US Co and Chauvco shall use
their best efforts to cause the Form S-3 to become effective.
<PAGE> 8
- 8 -
(b) Each party shall promptly furnish to the other party all
information concerning such party and its stockholders as may be reasonably
required in connection with any action contemplated by this Section 1.5. The
Joint Proxy Statement and, if required, the Form F-4, Form S-4 and Form S-3,
shall comply in all material respects with all applicable requirements of law.
Each of US Co and Chauvco will notify the other promptly of the receipt of any
comments from the SEC and of any request by the SEC for amendments or
supplements to the Joint Proxy Statement or the Form F-4, Form S-4 or Form S-3,
if required, or for additional information, and will supply the other with
copies of all correspondence with the SEC with respect to the Joint Proxy
Statement or the Form S-3, if required. Whenever any event occurs which should
be set forth in an amendment or supplement to the Joint Proxy Statement or the
Form F-4, Form S-4 or Form S-3, if required, US Co or Chauvco, as the case may
be, shall promptly inform the other of such occurrence and cooperate in filing
with the SEC, and/or mailing to stockholders of US Co or Chauvco, as may be
applicable, such amendment or supplement.
(c) US Co and Chauvco shall take any action required to be taken under
any applicable provincial or state securities laws (including "blue sky" laws)
in connection with the issuance of the Exchangeable Shares, CRI Shares or US Co
Common Stock and the Arrangement; provided, however, that with respect to the
blue sky and Canadian provincial qualifications, neither US Co nor Chauvco
shall be required to register or qualify as a foreign corporation or reporting
issuer where any such entity is not now so registered or qualified except as to
matters and transactions arising solely from the offer and sale of the US Co
Common Stock, the CRI Shares or the issuance of the Exchangeable Shares.
1.8 REORGANIZATION
The parties intend to adopt this Agreement and the Plan of Arrangement
as a qualified stock purchase under Section 338(d)(3) of the Internal Revenue
Code of 1986, as amended (the "Code").
1.9 MATERIAL ADVERSE EFFECT
In this Agreement, any reference to any event, change or effect being
"material" with respect to any entity or group of entities means any material
event, change or effect related to the condition (financial or otherwise),
properties or business of such entity or group of entities. In this Agreement,
the term "Material Adverse Effect" used with respect to any party means any
event, change or effect that is materially adverse to the condition (financial
or otherwise), properties or business of such party and its subsidiaries, taken
as a whole; provided, that a Material Adverse Effect shall not include any
adverse effect resulting from changes in general economic conditions or
conditions generally affecting the industries in which US Co or Chauvco
operate.
1.10 CURRENCY
Unless otherwise specified, all references in this Agreement to
"dollars" or "$" shall mean Canadian dollars.
<PAGE> 9
- 9 -
1.11 EXHIBITS
The following exhibits attached hereto shall form part of this
Agreement:
(a) Exhibit A - Plan of Arrangement;
(b) Exhibit B - Support Agreement;
(c) Exhibit C - Voting and Exchange Trust Agreement;
(d) Exhibit D - Terms and Conditions of US Co Special
Voting Stock;
(e) Exhibit E - List of Lock-up Shareholders;
(f) Exhibit F - List of Other Assets to be Transferred to
CRI; and
(g) Exhibit G - Provisions of Memorandum of Association of
US Co Sub.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF CHAUVCO
Except as set forth in a letter dated the date of this Agreement and
delivered by Chauvco to US Co concurrently herewith (the "Chauvco Disclosure
Letter") and subject to Sections 7.7 and 7.8 hereof, Chauvco hereby represents
and warrants to US Co that:
2.1 ORGANIZATION AND STANDING
Chauvco and each partnership, joint venture, corporation, association
or other business entity of which more than 50% of the total voting power of
shares of stock or units of ownership or beneficial interest entitled to vote
in the election of directors (or members of a comparable governing body) is
owned or controlled, directly or indirectly, by Chauvco (the "Chauvco
Subsidiaries"), is duly incorporated or formed, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has full requisite power and authority to carry on
its business as it is currently conducted, and to own, lease and operate the
properties currently owned, leased and operated by it, and is duly qualified or
licensed to do business and is in good standing as a foreign corporation or
organization authorized to do business in all jurisdictions in which the
character of the properties owned or leased or the nature of the business
conducted by it would make such qualification or licensing necessary, except
where the failure to be so qualified or licensed would not have a Material
Adverse Effect on Chauvco. The Chauvco Disclosure Letter sets forth a complete
list of the Chauvco Subsidiaries (and all other subsidiaries in which Chauvco
has an interest of 50% or less determined as described above), the percentage
of each subsidiary's outstanding capital stock or other ownership interest
owned by Chauvco or another Chauvco Subsidiary and a description of any lien,
charge, mortgage, security interest, option, preferential purchase right or
other right or interest of any other person (collectively, an "Encumbrance") on
such stock, on treasury stock or other ownership interest and a complete list
of each jurisdiction in which each of Chauvco and each Chauvco Subsidiary is
duly qualified, registered and in good standing to do business.
2.2 AGREEMENT AUTHORIZED AND ITS EFFECT ON OTHER OBLIGATIONS
(a) Chauvco has all requisite corporate power and authority to enter
into this Agreement and, subject to approval of this Agreement and the
Arrangement by the shareholders of Chauvco and approval by the Court, to
perform its obligations hereunder and to consummate the Arrangement and
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the other transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Chauvco and, subject to approval of this
Agreement and the Arrangement by the shareholders of Chauvco and approval by
the Court, the consummation by Chauvco of the Arrangement and the other
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Chauvco. This Agreement has been duly executed
and delivered by Chauvco and is the valid and binding obligation of Chauvco,
enforceable in accordance with its terms, except that such enforceability may
be subject to (i) bankruptcy, insolvency, reorganization or other similar laws
affecting or relating to enforcement of creditors' rights generally and (ii)
general equitable principles.
(b) Neither the execution, delivery and performance of this Agreement
or the Arrangement by Chauvco, nor the consummation of the transactions
contemplated hereby or thereby by Chauvco nor compliance with the provisions
hereof or thereof by Chauvco will: (i) conflict with, or result in any
violations of, the articles of amalgamation or bylaws of Chauvco or any
equivalent document of any of the Chauvco Subsidiaries, or (ii) result in any
breach of or cause a default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, amendment, cancellation or
acceleration of any obligation contained in, or the loss of any material
benefit under, or result in the creation of any Encumbrance upon any of the
material properties or assets of Chauvco or any of the Chauvco Subsidiaries
under, any term, condition or provision of any loan or credit agreement, note,
bond, mortgage, indenture, lease or other material agreement, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Chauvco or
any of the Chauvco Subsidiaries or their respective properties or assets, other
than any such breaches, defaults, losses, or encumbrances which, individually
or in the aggregate, would not have a Material Adverse Effect on Chauvco.
2.3 GOVERNMENTAL CONSENTS
No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign (each a
"Governmental Entity"), is required to be obtained by Chauvco or any of the
Chauvco Subsidiaries in connection with the execution and delivery of this
Agreement or the Plan of Arrangement or the consummation of the transactions
contemplated hereby or thereby, except for: (i) the filing with the applicable
Canadian provincial securities commissions or regulatory authorities (the
"Commissions") and the Court and the mailing to shareholders of Chauvco of the
Joint Proxy Statement relating to the Chauvco Meeting to be held with respect
to the approval of this Agreement and the Arrangement, (ii) the furnishing to
the SEC of all required filings under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations promulgated by the
SEC thereunder, as may be required in connection with this Agreement and the
transactions contemplated hereby (the "SEC Filings"); (iii) approval by the
Court of the Arrangement and the filings of the articles of arrangement and
other required arrangement or other documents as required by the ABCA; (iv)
such filings, authorizations, orders and approvals as may be required under
state "control share acquisition," "anti-takeover" or other similar statutes,
any other applicable federal, provincial or state securities laws and the rules
of the NYSE or The Toronto Stock Exchange ("TSE"); (v) such filings and
notifications as may be necessary under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"); (vi) such notices and
filings as may be necessary under the Investment Canada Act and under the
Competition Act (Canada); and (vii) where the failure to obtain such consents,
approvals, etc., would not prevent or delay the consummation of
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the Arrangement or otherwise prevent Chauvco from performing its obligations
under this Agreement and would not reasonably be expected to have a Material
Adverse Effect on Chauvco.
2.4 CAPITALIZATION
The authorized capital stock of Chauvco consists of an unlimited
number of Chauvco Common Shares, no par value. At the close of business on
August 29, 1997, 48,464,312 Chauvco Common Shares were issued and outstanding,
and no Chauvco Common Shares were held by Chauvco in its treasury. As of August
29, 1997, an aggregate of 2,901,995 Chauvco Common Shares were reserved for
issuance pursuant to outstanding Chauvco Options granted under the Chauvco
Option Plan. All issued and outstanding Chauvco Common Shares have been duly
authorized, validly issued and are fully paid and non-assessable. Except in
connection with the Chauvco Option Plan and in connection with Chauvco's
shareholder rights plan adopted pursuant to that agreement dated April 24, 1997
between Chauvco and Montreal Trust Company of Canada (the "Chauvco SRP"), no
person, firm or corporation has any agreement or option or any right or
privilege, whether by law, pre-emptive or contractual, capable of becoming an
agreement, including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription, allotment or
issuance of any of the unissued shares in the capital of Chauvco or of any
securities of Chauvco.
2.5 SECURITIES REPORTS AND FINANCIAL STATEMENTS
Chauvco and all predecessor corporations to Chauvco have filed all
forms, reports and documents with the Commissions required to be filed by it or
them pursuant to relevant Canadian securities statutes, regulations, policies
and rules (collectively, the "Chauvco Securities Reports"), all of which have
complied in all material respects with all applicable requirements of such
statutes, regulations, policies and rules. None of the Chauvco Securities
Reports, at the time filed or as subsequently amended, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of Chauvco and such predecessor corporations contained in
the Chauvco Securities Reports complied in all material respects with the then
applicable accounting requirements and the published rules and regulations of
the relevant Canadian securities statutes with respect thereto, were prepared
in accordance with Canadian generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may have been
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by applicable laws, rules or regulations) and fairly present
(subject, in the case of the unaudited statements, to normal, year-end audit
adjustments) the consolidated financial position of Chauvco and such
predecessor corporations and the consolidated Chauvco Subsidiaries as at the
respective dates thereof and the consolidated results of their operations and
cash flows for the respective periods then ended. There has been no change in
the accounting policies or the methods of making accounting estimates of
Chauvco or its predecessor corporations or changes in estimates that are
material to such financial statements, except as described in the notes
thereto.
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2.6 LIABILITIES
Chauvco and the Chauvco Subsidiaries do not have any liabilities or
obligations, either accrued, absolute, contingent, or otherwise, or have any
knowledge of any potential liabilities or obligations, other than those (i)
disclosed in the Chauvco Securities Reports, (ii) set forth in the Chauvco
Disclosure Letter, (iii) incurred in the ordinary course of business since June
30, 1997; or (iv) which individually or in the aggregate would not reasonably
be expected to have a Material Adverse Effect on Chauvco.
2.7 INFORMATION SUPPLIED
None of the information supplied or to be supplied by Chauvco for
inclusion or incorporation by reference in the Joint Proxy Statement (and, if
filed, the Form S-3, S-4 or F-4) will, at the time the Joint Proxy Statement is
mailed to the shareholders of Chauvco and at the time of the Chauvco Meeting
(and, if filed, at the time the Form S-3, S-4 or F-4 is declared effective),
contain any 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 are made, not misleading. The
Joint Proxy Statement will comply as to form in all material respects with the
provisions of the ABCA and applicable Canadian securities laws and the rules
and regulations promulgated thereunder.
2.8 NO DEFAULTS
Neither Chauvco nor any Chauvco Subsidiary is, or has received notice
that it would be with the passage of time, in default or violation of any term,
condition or provision of (i) its charter documents or bylaws; (ii) any
judgment, decree or order applicable to it; or (iii) any loan or credit
agreement, note, bond, mortgage, indenture, material contract, agreement,
lease, license or other instrument to which Chauvco or any Chauvco Subsidiary
is now a party or by which it or any of its properties or assets may be bound,
except in the case of item (iii) for defaults and violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
Chauvco.
2.9 LITIGATION; INVESTIGATIONS
There is no claim, action, suit or proceeding pending or, to the
knowledge of Chauvco, threatened, which would, if adversely determined,
individually or in the aggregate, have a Material Adverse Effect on Chauvco,
nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Chauvco or any of the
Chauvco Subsidiaries having, or which, insofar as reasonably can be foreseen,
in the future could have, any such effect. There is no investigation pending
or, to the knowledge of Chauvco, threatened, against Chauvco or any of the
Chauvco Subsidiaries before any Governmental Entity which could have any such
effect.
2.10 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in the Chauvco Disclosure Letter, other than as a
result of the transactions contemplated by this Agreement, since June 30, 1997,
there has not been:
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(a) Financial Change. Any material adverse change in the financial
condition, operations, assets, liabilities or business of Chauvco or the
Chauvco Subsidiaries;
(b) Property Damage. Any material damage, destruction, or loss to the
business or properties of Chauvco or the Chauvco Subsidiaries (whether or not
covered by insurance);
(c) Dividends or Redemptions. Any declaration, setting aside, or
payment of any dividend or other distribution in respect of the capital stock
of Chauvco, or any direct or indirect redemption, purchase or any other
acquisition by Chauvco of any such stock;
(d) Capitalization Change. Any change in the capital stock or in the
number of shares or classes of Chauvco's authorized or outstanding capital
stock as described in Section 2.4 (other than as a result of exercises of
currently outstanding Chauvco Options); or
(e) Other Material Changes. Any other event or condition known to
Chauvco particularly pertaining to and adversely affecting the operations,
assets or business of Chauvco or the Chauvco Subsidiaries (other than events or
conditions which are of a general or industry-wide nature and of general public
knowledge) which would constitute a Material Adverse Effect on Chauvco.
2.11 ADDITIONAL CHAUVCO INFORMATION
The Chauvco Disclosure Letter contains true, complete and correct
lists of the following items with respect to Chauvco and the Chauvco
Subsidiaries, and Chauvco agrees that upon the request of US Co, it will
furnish to US Co true, complete and correct copies of any documents referred to
in such lists:
(a) Material Contracts. All contracts which involve, or may involve,
aggregate payments by any party thereto of $5,000,000 or more, which are to be
performed in whole or in part after the Effective Time;
(b) Employee Compensation Plans. All bonus, retention bonus, company
severance policy, employee stock option plans, incentive compensation, deferred
compensation, profit-sharing, retirement, pension, welfare, group insurance,
death benefit, or other fringe benefit plans, arrangements or trust agreements
together with copies of the most recent reports with respect to such plans,
arrangements, or trust agreements filed with any Governmental Entity and all
tax determination letters that have been received with respect to such plans;
(c) Employee Agreements. Any collective bargaining agreements with any
labor union or other representative of employees, including amendments and
supplements, in each case covering ten (10) or more employees, all employment
agreements involving, individually, remuneration greater than $100,000 per
annum and all executive termination agreements;
(d) Patents. All patents, trademarks, copyrights and other material
intellectual property rights owned, licensed or used;
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(e) Trade Names. All trade names and fictitious names used or held,
whether and where such names are registered and where used;
(f) Promissory Notes. All long-term and short-term promissory notes,
installment contracts, loan agreements, credit agreements, and any other
agreements relating thereto or with respect to collateral securing the same; and
(g) Guarantees. All indebtedness, liabilities and commitments of others
and as to which it is a guarantor, endorser, co-maker, surety, or accommodation
maker, or is contingently liable therefor (excluding liabilities as an endorser
of checks and the like in the ordinary course of business) and all letters of
credit, whether stand-by or documentary, issued by any third party.
2.12 CERTAIN AGREEMENTS
Except in connection with Chauvco's executive termination agreements,
retention bonus plan, company severance policy and Stock Option Plan, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including
without limitation, severance, unemployment compensation, parachute payment,
bonus or otherwise) becoming due to any director, employee or independent
contractor of Chauvco or the Chauvco Subsidiaries under any Chauvco Plan (as
hereinafter defined) or otherwise, (ii) materially increase any benefits
otherwise payable under any Chauvco Plan or otherwise or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.
2.13 EMPLOYEE BENEFIT PLANS
Except for health insurance, vacation, severance and similar plans
which are set forth in the Chauvco Disclosure Letter ("Chauvco Plans"), there
are no employee benefits plans covering active, former or retired employees of
Chauvco and the Chauvco Subsidiaries. Each Chauvco Plan has been maintained and
administered in material compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and regulations.
2.14 INTELLECTUAL PROPERTY
Chauvco or the Chauvco Subsidiaries owns or possesses licenses to use
all patents, patent applications, trademarks and service marks (including
registrations and applications therefor), trade names, copyrights and written
know-how, trade secrets and all other similar proprietary data and the goodwill
associated therewith (collectively, the "Chauvco Intellectual Property") that
are either material to the business of Chauvco or any Chauvco Subsidiary or
that are necessary for the manufacture, use, license or sale of any services or
products manufactured, used, licensed or sold by Chauvco or the Chauvco
Subsidiaries, including all such intellectual property listed in the Chauvco
Disclosure Letter. The Chauvco Intellectual Property is owned or licensed by
Chauvco or the Chauvco Subsidiaries free and clear of any Encumbrance other
than such Encumbrances as are listed in the Chauvco Disclosure Letter. Except
as otherwise indicated in such letter or in the ordinary course of business,
neither Chauvco nor the Chauvco Subsidiaries has granted to any other person
any license to use any Chauvco Intellectual Property. Neither Chauvco nor the
Chauvco Subsidiaries has received any notice of infringement, misappropriation,
or conflict with, the
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intellectual property rights of others in connection with the use by Chauvco or
the Chauvco Subsidiaries of the Chauvco Intellectual Property.
2.15 TITLE TO PROPERTIES
Except for goods and other property sold, used or otherwise disposed
of in the ordinary course of business for fair value, Chauvco has good and
indefeasible title to all its properties, interests in properties and assets,
real and personal, reflected in its June 30, 1997 financial statements, free
and clear of any Encumbrance, except (i) Encumbrances reflected in the balance
sheet of Chauvco dated June 30, 1997, (ii) liens for current taxes not yet due
and payable, and (iii) such imperfections of title, easements and Encumbrances,
if any, which would not, individually or in the aggregate, have a Material
Adverse Effect on Chauvco. All leases pursuant to which Chauvco or any Chauvco
Subsidiary leases (whether as lessee or lessor) any substantial amount of real
or personal property are in good standing, valid, and effective; and there is
not, under any such leases, any existing or prospective default or event of
default or event which with notice or lapse of time, or both, would constitute
a default by Chauvco or any Chauvco Subsidiary which would, individually or in
the aggregate, have a Material Adverse Effect on Chauvco and in respect to
which Chauvco or a Chauvco Subsidiary has not taken adequate steps to prevent a
default from occurring. The buildings and premises of Chauvco and the Chauvco
Subsidiaries that are used in its business are in good operating condition and
repair, subject only to ordinary wear and tear. All major items of operating
equipment of Chauvco and the Chauvco Subsidiaries are in good operating
condition and in a state of reasonable maintenance and repair, ordinary wear
and tear excepted, and are free from any known defects except as may be
repaired by routine maintenance and such minor defects as to not substantially
interfere with the continued use thereof in the conduct of normal operations.
2.16 ENVIRONMENTAL MATTERS
Except as set forth in the Chauvco Disclosure Letter:
(a) Environmental Conditions. There are no environmental conditions or
circumstances, such as the presence or release of any hazardous substance, on
any property presently or previously owned or leased by Chauvco or the Chauvco
Subsidiaries that could result in a Material Adverse Effect on Chauvco.
(b) Permits, etc. Chauvco and the Chauvco Subsidiaries have in full
force and effect all environmental permits, licenses, approvals and other
authorizations required to conduct their operations and are operating in
material compliance thereunder.
(c) Compliance. Chauvco's and the Chauvco Subsidiaries' operations and
use of their assets do not violate any applicable United States or Canadian or
other federal, provincial, state or local law, statute, ordinance, rule,
regulation, order or notice requirement (collectively the "Applicable
Environmental Laws") pertaining to (a) the condition or protection of air,
groundwater, surface water, soil, or other environmental media, (b) the
environment, including natural resources or any activity which affects the
environment, or (c) the regulation of any pollutants, contaminants, waste or
substances (whether or not hazardous or toxic), including, without limitation,
the Comprehensive Environmental Response Compensation and Liability Act (42 U.
S.C. ss. 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C.
ss. 1801 et seq.), the Resource
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Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.) the Clean Water Act
(33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et seq.),
the Toxic Substances Control Act (15 U. S.C. ss. 2601 et seq.), the Safe
Drinking Water Act (42 U. S.C. ss. 300f et seq.), the Rivers and Harbors Act
(33 U.S.C. ss. 401 et seq.), the Oil Pollution Act (33 U. S.C. ss. 2701 et
seq.) and analogous Canadian, Argentine, foreign, provincial, state and local
provisions, as any of the foregoing may have been amended or supplemented from
time to time, except for violations which, either singly or in the aggregate,
would not result in a Material Adverse Effect on Chauvco.
(d) Past Compliance. None of the operations or assets of Chauvco or
the Chauvco Subsidiaries has ever been conducted or used by Chauvco or the
Chauvco Subsidiaries in such a manner as to constitute a violation of any of
the Applicable Environmental Laws, except for violations which, either singly
or in the aggregate, would not result in a Material Adverse Effect on Chauvco.
(e) Environmental Claims. No notice has been served on Chauvco or any
Chauvco Subsidiaries from any entity, governmental agency or individual
regarding any existing, pending or threatened investigation or inquiry related
to alleged violations under any Applicable Environmental Laws, or regarding any
claims for remedial obligations or contribution under any Applicable
Environmental Laws, other than any of the foregoing which, either singly or in
the aggregate, would not result in a Material Adverse Effect on Chauvco.
(f) Renewals. Chauvco does not know of any reason it or US Co would
not be able to renew any of the permits, licenses, or other authorizations
required pursuant to any Applicable Environmental Laws to operate and use any
of Chauvco's or the Chauvco Subsidiaries' assets for their current purposes and
uses.
2.17 COMPLIANCE WITH OTHER LAWS
Except as set forth in the Chauvco Disclosure Letter, neither Chauvco
nor any Chauvco Subsidiary is in violation of or in default with respect to, or
in alleged violation of or alleged default with respect to any other applicable
law or any applicable rule, regulation, or any writ or decree of any court or
any governmental commission, board, bureau, agency, or instrumentality, or
delinquent with respect to any report required to be filed with any
Governmental Entity, except for violations which, either singly or in the
aggregate, do not and are not expected to result in a Material Adverse Effect
on Chauvco.
2.18 TAXES
Except with respect to failures which, in the aggregate, would not
result in a Material Adverse Effect on Chauvco, proper and accurate federal,
provincial, state and local income, capital, withholding, value added, sales,
use, franchise, gross revenue, turnover, excise, payroll, property, employment,
customs duties and any and all other tax returns, reports, and estimates have
been filed with appropriate governmental agencies, domestic and foreign, by
Chauvco and each of the Chauvco Subsidiaries for each period for which any
returns, reports, or estimates were due (taking into account any extensions of
time to file before the date hereof); all taxes shown by such returns to be
payable and any other taxes due and payable have been paid other than those
being contested in good faith by Chauvco or a Chauvco Subsidiary; and the tax
provision reflected in Chauvco's financial
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statements as of June 30, 1997, is adequate, in accordance with Canadian
generally accepted accounting principles, to cover liabilities of Chauvco and
the Chauvco Subsidiaries at the date thereof for all taxes, including any
interest, penalties and additions to taxes of any character whatsoever
applicable to Chauvco and the Chauvco Subsidiaries or their assets or
businesses. There are no tax liens on any assets of Chauvco or the Chauvco
Subsidiaries except for taxes not yet currently due and those which could not
reasonably be expected to result in a Material Adverse Effect on Chauvco.
2.19 VOTE REQUIRED
Except as may be provided in the Interim Order, at the Chauvco Meeting
at which a quorum is present, the affirmative vote of the holders of two-thirds
of the Chauvco Common Shares present is the only vote required to approve this
Agreement, the Arrangement and the consummation of the transactions
contemplated hereby.
2.20 BROKERS AND FINDERS
Other than Salomon Brothers Inc. and RBC Dominion Securities Inc. in
accordance with the terms of their respective engagement letters in final
forms, copies of which have previously been provided to US Co, none of Chauvco
or any of the Chauvco Subsidiaries nor any of their respective directors,
officers or employees has employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions or
similar payments in connection with the transactions contemplated by this
Agreement.
2.21 DISCLOSURE
No representation or warranty made by Chauvco in this Agreement, nor
any document, written information statement, financial statement, certificate
or Exhibit prepared and furnished or to be prepared and furnished by Chauvco or
its representatives pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contained any untrue statement of a
material fact when made, or omitted to state a material fact necessary to make
the statements or facts contained herein or therein not misleading in light of
the circumstances under which they were furnished.
2.22 FAIRNESS OPINION
Chauvco's board of directors has received favourable written opinions
from Salomon Brothers Inc and RBC Dominion Securities Inc. as to the fairness
of the Plan of Arrangement and the other transactions contemplated herein.
2.23 RESTRICTIONS ON BUSINESS ACTIVITIES
There is no material agreement, judgment, injunction, order or decree
binding upon Chauvco or any Chauvco Subsidiary that has or could reasonably be
expected to have the effect of prohibiting or materially impairing any business
practice of Chauvco or any Chauvco Subsidiary, any acquisition of property by
Chauvco or any Chauvco Subsidiary, the conduct of business by Chauvco or any
Chauvco Subsidiary as currently conducted or the consummation of the
Arrangement.
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2.24 BOOKS AND RECORDS
The books, records and accounts of Chauvco and the Chauvco
Subsidiaries (a) have been maintained in accordance with good business
practices on a basis consistent with prior years, (b) are stated in reasonable
detail and accurately and fairly reflect the transactions and dispositions of
the assets of Chauvco and the Chauvco Subsidiaries and (c) accurately and
fairly reflect the basis for the Chauvco financial statements. Chauvco has
devised and maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (a) transactions are executed in accordance
with management's general or specific authorization; and (b) transactions are
recorded as necessary (i) to permit preparation of financial statements in
conformity with Canadian generally accepted accounting principles or any other
criteria applicable to such statements and (ii) to maintain accountability for
assets.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF US CO
Except as set forth in a letter dated the date of this Agreement and
delivered by US Co to Chauvco concurrently herewith (the "US Co Disclosure
Letter"), US Co hereby represents and warrants to Chauvco, in each case with
respect to itself and with respect to its predecessor corporations, that:
3.1 ORGANIZATION AND STANDING
US Co and each partnership, joint venture, corporation, association or
other business entity of which more than 50% of the total voting power of
shares of stock or units of ownership or beneficial interest entitled to vote
in the election of directors (or members of a comparable governing body) is
owned or controlled, directly or indirectly, by US Co (the "US Co
Subsidiaries"), is duly incorporated or formed, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has full requisite power and authority to carry on
its business as it is currently conducted, and to own, lease and operate the
properties currently owned, leased and operated by it, and is duly qualified or
licensed to do business and is in good standing as a foreign corporation or
organization authorized to do business in all jurisdictions in which the
character of the properties owned or leased or the nature of the business
conducted by it would make such qualification or licensing necessary, except
where the failure to be so qualified or licensed would not have a Material
Adverse Effect on US Co. The US Co Disclosure Letter sets forth a complete list
of the US Co Subsidiaries.
3.2 AGREEMENT AUTHORIZED AND ITS EFFECT ON OTHER OBLIGATIONS
(a) US Co has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder and, subject to
approval of US Co's stockholders as provided in this Agreement, to consummate
the Arrangement and the other transactions contemplated by this Agreement. The
execution and delivery of this Agreement by US Co and, subject to approval of
US Co's stockholders as provided in this Agreement, the consummation by US Co
of the Arrangement and the other transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of US Co. This
Agreement has been duly executed and delivered by US Co and is the valid and
binding obligation of US Co, enforceable in accordance with
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its terms, except that such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) general equitable
principles.
(b) Neither the execution, delivery and performance of this Agreement
or the Arrangement by US Co, nor the consummation of the transactions
contemplated hereby or thereby by US Co nor compliance with the provisions
hereof or thereof by US Co will: (i) conflict with, or result in any violations
of, the certificate of incorporation or bylaws of US Co or any equivalent
document of any of the US Co Subsidiaries, or (ii) result in any breach of or
cause a default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or acceleration of
any obligation contained in, or the loss of any material benefit under, or
result in the creation of any Encumbrance upon any of the material properties
or assets of US Co or any of the US Co Subsidiaries under, any term, condition
or provision of any loan or credit agreement, note, bond, mortgage, indenture,
lease or other material agreement, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to US Co or any of the US Co
Subsidiaries or their respective properties or assets, other than any such
breaches, defaults, losses, or encumbrances which, individually or in the
aggregate, would not have a Material Adverse Effect on US Co. Without limiting
the generality of the foregoing, upon the consummation of the Arrangement,
except as contemplated herein, no person or group of persons shall have any
right, contingent or otherwise, to elect, designate or appoint any director of
US Co and no person or group of persons shall have any right, contingent or
otherwise that is inconsistent with the provisions hereof.
3.3 GOVERNMENTAL CONSENTS
No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required to be obtained
by US Co or any of the US Co Subsidiaries in connection with the execution and
delivery of this Agreement or the Plan of Arrangement or the consummation of
the transactions contemplated hereby or thereby, except for: (i) the filing
with the Commissions and the mailing to stockholders of US Co of the Joint
Proxy Statement relating to the US Co Stockholders Meeting, (ii) the furnishing
to the SEC of SEC Filings; (iii) approval by the Court of the Arrangement and
the filings of the articles of arrangement and other required arrangement or
other documents as required by the ABCA; (iv) such filings, authorizations,
orders and approvals as may be required under state "control share
acquisition," "anti-takeover" or other similar statutes, any other applicable
federal, provincial or state securities laws and the rules of the NYSE or the
TSE; (v) such filings and notifications as may be necessary under the HSR Act;
(vi) such notices and filings as may be necessary under the Investment Canada
Act and under the Competition Act (Canada); (vii) the filing of a Certificate
of Designation with the Delaware Secretary of State with respect to the
creation of special voting stock; and (viii) where the failure to obtain such
consents, approvals, etc., would not prevent or delay the consummation of the
Arrangement or otherwise prevent US Co from performing its obligations under
this Agreement and would not reasonably be expected to have a Material Adverse
Effect on US Co.
3.4 CAPITALIZATION
The authorized capital stock of US Co consists of 500,000,000 common
shares, U.S.$0.01 par value ("US Co Common Stock") and 100,000,000 preferred
shares, $0.01 par value (the "US Co
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Preferred Stock"). As of August 29, 1997, there were 73,555,501 shares of US Co
Common Stock outstanding, and 3,718,314 shares of US Co Common Stock were
reserved for issuance upon the exercise of stock options outstanding under US
Co's stock option plan; at the same date, no shares of US Co Preferred Stock
were outstanding. Except in connection with US Co's stock option plan, no
person, firm or corporation has any agreement or option or any right or
privilege, whether by law, pre-emptive or contractual, capable of becoming an
agreement, including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription, allotment or
issuance of any of the unissued shares in the capital of US Co or of any
securities of US Co. US Co has no shareholder rights plan or similar
arrangement in place in connection with the US Co Common Stock or otherwise
(provided that US Co shall be entitled to institute such a plan or similar
arrangement prior to the Effective Date so long as such plan treats the holders
of Exchangeable Shares in substantially the same manner as the holders of US Co
Common Stock and provided the institution of the shareholder rights plan does
not have a tax impact on the holders of Exchangeable Shares.
3.5 SECURITIES REPORTS AND FINANCIAL STATEMENTS
US Co and all predecessor corporations to US Co have filed all forms,
reports and documents required to be filed by them by the SEC or pursuant to
relevant United States securities statutes, regulations, policies and rules
(collectively, the "US Co Securities Reports"), all of which have complied in
all material respects with all applicable requirements of such statutes,
regulations, policies and rules. None of the US Co Securities Reports, at the
time filed or as subsequently amended, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of US Co and such predecessor corporations contained in the US Co
Securities Reports complied in all material respects with the then applicable
accounting requirements and the published rules and regulations of the relevant
United States securities statutes with respect thereto, were prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (except as may have been
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by applicable laws, rules or regulations) and fairly present
(subject, in the case of the unaudited statements, to normal, year-end audit
adjustments) the consolidated financial position of US Co and such predecessor
corporations and the consolidated US Co Subsidiaries as at the respective dates
thereof and the consolidated results of their operations and cash flows for the
respective periods then ended. There has been no change in the accounting
policies or the methods of making accounting estimates or changes in estimates
of US Co or its predecessor corporations that are material to such financial
statements, except as described in the notes thereto.
3.6 LIABILITIES
US Co and the US Co Subsidiaries do not have any liabilities or
obligations, either accrued, absolute, contingent, or otherwise, or have any
knowledge of any potential liabilities or obligations, other than those (i)
disclosed in the US Co Securities Reports or those of its predecessors, (ii)
set forth in the US Co Disclosure Letter, (iii) incurred in the ordinary course
of business since June 30, 1997, or (iv) which individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect on US Co.
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3.7 INFORMATION SUPPLIED
None of the information supplied or to be supplied by US Co for
inclusion or incorporation by reference in the Joint Proxy Statement (and, if
filed, the Form F-4 or Form S-3) will, at the time the Joint Proxy Statement is
mailed to the shareholders of US Co and at the time of the US Co Stockholders
Meeting (and, if filed, at the time the Form F-4 or Form S-3 is declared
effective), contain any 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 are made,
not misleading. The Joint Proxy Statement will comply as to form in all
material respects with the provisions of applicable United States securities
laws and the rules and regulations of the SEC.
3.8 NO DEFAULTS
Neither US Co nor any US Co Subsidiary is, or has received notice that
it would be with the passage of time, in default or violation of any term,
condition or provision of (i) its charter documents or bylaws; (ii) any
judgment, decree or order applicable to it; or (iii) any loan or credit
agreement, note, bond, mortgage, indenture, material contract, agreement,
lease, license or other instrument to which US Co or any US Co Subsidiary is
now a party or by which it or any of its properties or assets may be bound,
except in the case of item (iii) for defaults and violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
US Co.
3.9 LITIGATION; INVESTIGATIONS
There is no claim, action, suit or proceeding pending or, to the
knowledge of US Co, threatened, which would, if adversely determined,
individually or in the aggregate, have a Material Adverse Effect on US Co, nor
is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against US Co or any of the US Co Subsidiaries
having, or which, insofar as reasonably can be foreseen, in the future could
have, any such effect. There is no investigation pending or, to the knowledge
of US Co, threatened, against US Co or any of the US Co Subsidiaries before any
Governmental Entity which could have any such effect.
3.10 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in the US Co Disclosure Letter, other than as a
result of the transactions contemplated by this Agreement, since June 30, 1997,
there has not been:
(a) Financial Change. Any material adverse change in the financial
condition, operations, assets, liabilities or business of US Co or the US Co
Subsidiaries or its predecessors;
(b) Property Damage. Any material damage, destruction, or loss to the
business or properties of US Co or the US Co Subsidiaries (whether or not
covered by insurance);
(c) Dividends or Redemptions. Except as contemplated herein, any
declaration, setting aside, or payment of any dividend or other distribution in
respect of the capital stock of US Co, or any direct or indirect redemption,
purchase or any other acquisition by US Co of any such stock;
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(d) Capitalization Change. Any change in the capital stock or in the
number of shares or classes of US Co's authorized or outstanding capital stock
as described in Section 3.4 (other than as a result of exercises of currently
outstanding options to purchase US Co Common Stock and other than as
contemplated in Section 1.4); or
(e) Other Material Changes. Any other event or condition known to US
Co particularly pertaining to and adversely affecting the operations, assets or
business of US Co or the US Co Subsidiaries (other than events or conditions
which are of a general or industry-wide nature and of general public knowledge)
which would constitute a Material Adverse Effect on US Co.
3.11 ADDITIONAL US CO INFORMATION
The US Co Disclosure Letter contains true, complete and correct lists
of the following items with respect to US Co and the US Co Subsidiaries, and US
Co agrees that upon the request of Chauvco, it will furnish to Chauvco true,
complete and correct copies of any documents referred to in such lists:
(a) Material Contracts. All contracts which involve, or may involve,
aggregate payments by any party thereto of $25,000,000 or more, which are to be
performed in whole or in part after the Effective Time; or
(b) Employee Compensation Plans. All bonus, retention bonus, company
severance policy, employee stock option plans, incentive compensation, deferred
compensation, profit-sharing, retirement, pension, welfare, group insurance,
death benefit, or other fringe benefit plans, arrangements or trust agreements.
3.12 CERTAIN AGREEMENTS
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including without limitation, severance, unemployment compensation,
parachute payment, bonus or otherwise) becoming due to any director, employee
or independent contractor of US Co or the US Co Subsidiaries under any US Co
Plan (as hereinafter defined) or otherwise, (ii) materially increase any
benefits otherwise payable under any US Co Plan or otherwise or (iii) result in
the acceleration of the time of payment or vesting of any such benefits.
3.13 TITLE TO PROPERTIES
Except for goods and other property sold, used or otherwise disposed
of in the ordinary course of business for fair value, US Co has good and
indefeasible title to all its properties, interests in properties and assets,
real and personal, reflected in its June 30, 1997, pro forma financial
statements, free and clear of any Encumbrance, except (i) Encumbrances
reflected in the pro forma balance sheet of US Co dated June 30, 1997, (ii)
liens for current taxes not yet due and payable, and (iii) such imperfections
of title, easements and Encumbrances, if any, which would not individually or
in the aggregate, have a Material Adverse Effect on US Co. All leases pursuant
to which US Co or any US Co Subsidiary leases (whether as lessee or lessor) any
substantial amount of real or personal property are in good standing, valid,
and effective; and there is not, under any such leases,
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any existing or prospective default or event of default or event which with
notice or lapse of time, or both, would constitute a default by US Co or any US
Co Subsidiary which would, individually or in the aggregate, have a Material
Adverse Effect on US Co and in respect to which US Co or a US Co Subsidiary has
not taken adequate steps to prevent a default from occurring. The buildings and
premises of US Co and the US Co Subsidiaries that are used in its business are
in good operating condition and repair, subject only to ordinary wear and tear.
All major items of operating equipment of US Co and the US Co Subsidiaries are
in good operating condition and in a state of reasonable maintenance and
repair, ordinary wear and tear excepted, and are free from any known defects
except as may be repaired by routine maintenance and such minor defects as to
not substantially interfere with the continued use thereof in the conduct of
normal operations.
3.14 ENVIRONMENTAL MATTERS
Except as set forth in the US Co Disclosure Letter:
(a) Environmental Conditions. There are no environmental conditions or
circumstances, such as the presence or release of any hazardous substance, on
any property presently or previously owned or leased by US Co or the US Co
Subsidiaries that could result in a Material Adverse Effect on US Co.
(b) Permits, etc. US Co and the US Co Subsidiaries have in full force
and effect all environmental permits, licenses, approvals and other
authorizations required to conduct their operations and are operating in
material compliance thereunder.
(c) Compliance. US Co's and the US Co Subsidiaries' operations and use
of their assets do not violate any applicable United States or Canadian or
other federal, provincial, state or local law, statute, ordinance, rule,
regulation, order or notice requirement pertaining to (a) the condition or
protection of air, groundwater, surface water, soil, or other environmental
media, (b) the environment, including natural resources or any activity which
affects the environment, or (c) the regulation of any pollutants, contaminants,
waste, substances (whether or not hazardous or toxic), including, without
limitation, the Applicable Environmental Laws, except for violations which,
either singly or in the aggregate, would not result in a Material Adverse
Effect on US Co.
(d) Past Compliance. None of the operations or assets of US Co or the
US Co Subsidiaries has ever been conducted or used by US Co or the US Co
Subsidiaries in such a manner as to constitute a violation of any of the
Applicable Environmental Laws, except for violations which, either singly or in
the aggregate, would not result in a Material Adverse Effect on US Co.
(e) Environmental Claims. No notice has been served on US Co or any US
Co Subsidiaries from any entity, governmental agency or individual regarding
any existing, pending or threatened investigation or inquiry related to alleged
violations under any Applicable Environmental Laws, or regarding any claims for
remedial obligations or contribution under any Applicable Environmental Laws,
other than any of the foregoing which, either singly or in the aggregate, would
not result in a Material Adverse Effect on US Co.
(f) Renewals. US Co does not know of any reason it would not be able
to renew any of the permits, licenses, or other authorizations required
pursuant to any Applicable Environmental
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Laws to operate and use any of US Co's or the US Co Subsidiaries' assets for
their current purposes and uses.
3.15 COMPLIANCE WITH OTHER LAWS
Except as set forth in the US Co Disclosure Letter, neither US Co nor
any US Co Subsidiary is in violation of or in default with respect to, or in
alleged violation of or alleged default with respect to any other applicable
law or any applicable rule, regulation, or any writ or decree of any court or
any governmental commission, board, bureau, agency, or instrumentality, or
delinquent with respect to any report required to be filed with any
Governmental Entity, except for violations which, either singly or in the
aggregate, do not and are not expected to result in a Material Adverse Effect
on US Co.
3.16 TAXES
(a) Except with respect to failures which, in the aggregate, would not
result in a Material Adverse Effect on US Co, proper and accurate federal,
state and local income, capital, withholding, value added, sales, use,
franchise, gross revenue, turnover, excise, payroll, property, employment,
customs duties and any and all other tax returns, reports, and estimates have
been filed with appropriate governmental agencies, domestic and foreign, by US
Co and all predecessor corporations and each of the US Co Subsidiaries for each
period for which any returns, reports, or estimates were due (taking into
account any extensions of time to file before the date hereof); all taxes shown
by such returns to be payable and any other taxes due and payable have been
paid other than those being contested in good faith by US Co or a US Co
Subsidiary; and the tax provision reflected in US Co's pro forma financial
statements as of June 30, 1997, is adequate, in accordance with United States
generally accepted accounting principles, to cover liabilities of US Co and the
US Co Subsidiaries at the date thereof for all taxes, including any interest,
penalties and additions to taxes of any character whatsoever applicable to US
Co and the US Co Subsidiaries or their assets or businesses. There are no tax
liens on any assets of US Co or the US Co Subsidiaries except for taxes not yet
currently due and those which could not reasonably be expected to result in a
Material Adverse Effect on US Co.
(b) On and after the Effective Date and until such time as no person,
other than US Co or an affiliate of US Co, holds any Exchangeable Shares,
neither US Co nor any of its affiliates will be a "specified financial
institution" as that term is defined in the ITA.
3.17 VOTE REQUIRED
At a stockholders meeting at which a quorum is present, the
affirmative vote of the holders of a majority of the outstanding shares of US
Co Common Stock present at the meeting is required to approve the issuance of
the US Co Common Stock pursuant to this Agreement and upon exchange of the
Exchangeable Shares. Except as aforesaid, no vote or other approval of the
stockholders of US Co is required, under the stockholder approval policy of the
NYSE, corporate law or otherwise, to approve this Agreement, the Arrangement
and the consummation of the transactions contemplated hereby.
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3.18 BROKERS AND FINDERS
Other than Goldman, Sachs & Co. in accordance with the terms of its
engagement letter, none of US Co or any of the US Co Subsidiaries nor any of
their respective directors, officers or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or similar payments in connection with the transactions
contemplated by this Agreement.
3.19 DISCLOSURE
No representation or warranty made by US Co in this Agreement, nor any
document, written information, statement, financial statement, certificate or
Exhibit prepared and furnished or to be prepared and furnished by US Co or its
representatives pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contained any untrue statement of a
material fact when made, or omitted to state a material fact necessary to make
the statements or facts contained herein or therein not misleading in light of
the circumstances under which they were furnished.
3.20 FAIRNESS OPINION
US Co's board of directors has received a written opinion from
Goldman, Sachs & Co. that as of the date hereof the consideration to be paid by
US Co in connection with this Agreement is fair to US Co.
3.21 RESTRICTIONS ON BUSINESS ACTIVITIES
There is no material agreement, judgment, injunction, order or decree
binding upon US Co or any US Co Subsidiary that has or could reasonably be
expected to have the effect of prohibiting or materially impairing any business
practice of US Co or any US Co Subsidiary, any acquisition of property by US Co
or any US Co Subsidiary, the conduct of business by US Co or any US Co
Subsidiary as currently conducted or the consummation of the Arrangement.
3.22 BOOKS AND RECORDS
The books, records and accounts of US Co and the US Co Subsidiaries
(a) have been maintained in accordance with good business practices on a basis
consistent with prior years, (b) are stated in reasonable detail and accurately
and fairly reflect the transactions and dispositions of the assets of US Co and
the US Co Subsidiaries and (c) accurately and fairly reflect the basis for the
US Co financial statements. US Co has devised and maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorization; and (b) transactions are recorded as necessary (i) to
permit preparation of financial statements in conformity with United States
generally accepted accounting principles or any other criteria applicable to
such statements and (ii) to maintain accountability for assets.
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3.23 US CO SUB
US Co Sub will be incorporated solely for the purpose of participating
in the transactions contemplated herein, will carry on no other business, and,
except as contemplated herein, will not have any liabilities or obligations,
either accrued, absolute, contingent, or otherwise as of the Effective Date.
ARTICLE 4
OBLIGATIONS PENDING EFFECTIVE DATE
4.1 AGREEMENTS OF US CO AND CHAUVCO
US Co and Chauvco agree to take the following actions after the date
hereof:
(a) Regulatory Approvals. Each party will promptly execute and file or
join in the execution and filing of any application or other document that may
be necessary in order to obtain the authorization, approval or consent of any
Governmental Entity, the Commissions or the SEC which may be reasonably
required, or which the other party may reasonably request, in connection with
the consummation of the transactions contemplated by this Agreement. Each party
will use its commercially reasonable efforts to promptly obtain such
authorizations, approvals and consents. Without limiting the generality of the
foregoing, as promptly as practicable after the execution of this Agreement,
each party shall make all required filings with the Federal Trade Commission
(the "FTC") and the Antitrust Division of the Department of Justice (the
"DOJ"), a pre-merger notification report under the HSR Act and shall make such
filings as are necessary under the Investment Canada Act and the Competition
Act (Canada).
(b) Access. Each party will allow the other and its agents reasonable
access to the premises and properties of the other and to the files, books,
records and offices of the other and the other's subsidiaries, including,
without limitation, any and all information relating to such party's tax
matters, contracts, leases, licenses and real, personal and intangible property
and financial condition. Each party will cause its accountants to cooperate
with the other in making available to the other party all financial information
reasonably requested, including, without limitation, the right to examine all
working papers pertaining to tax matters and financial statements prepared or
audited by such accountants.
(c) Joint Proxy Statement. US Co and Chauvco shall cooperate in the
preparation and prompt filing of the Joint Proxy Statement (and, if required,
the Form F-4, S-4 or Form S-3) with the SEC;
(d) Notice of Material Developments. Each of US Co and Chauvco will
promptly notify the other in writing (i) of any event occurring subsequent to
the date of this Agreement which would render, or might reasonably be expected
to render, any representation and warranty of such party contained in this
Agreement untrue or inaccurate in any material respect, (ii) of any Material
Adverse Effect on such party and (iii) of any breach by such party of any
covenant or agreement contained in this Agreement; and
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(e) Satisfaction of Conditions Precedent. During the term of this
Agreement, each of US Co and Chauvco will use its commercially reasonable
efforts to satisfy or cause to be satisfied all the conditions precedent that
are set forth in Article 5 hereof, and each of US Co and Chauvco will use its
commercially reasonable efforts to cause the Arrangement and the other
transactions contemplated by this Agreement to be consummated.
4.2 ADDITIONAL AGREEMENTS OF CHAUVCO
Chauvco agrees that from the date hereof to the Effective Date, it
will, and will cause each of the Chauvco Subsidiaries to:
(a) Operate in Ordinary Course/Consult. Other than as contemplated by
this Agreement, operate its business only in the usual, regular, and ordinary
manner and, to the extent consistent with such operation, use all commercially
reasonable efforts to preserve intact its present business organization, keep
available the services of its present officers and employees, and preserve its
relationships with customers, suppliers, distributors, and others having
business dealings with it; permit US Co representatives to meet with Chauvco
officers and attend such Chauvco business meetings, and provide US Co with such
periodic reports, all as US Co may reasonably request to become and keep
generally informed as to Chauvco's business, assets and operations;
(b) Maintenance of Properties. Maintain all of its property and assets
in customary repair, order, and condition, reasonable wear and use and damage
by fire or unavoidable casualty excepted;
(c) Maintenance of Books and Records. Maintain its books of account
and records in the usual, regular, and ordinary manner, in accordance with
generally accepted accounting principles applied on a consistent basis;
(d) Compliance with Law. Duly comply in all material respects with all
laws applicable to it and to the conduct of its business;
(e) Employment Matters. Allow reasonable access by US Co to employees
in order for US Co to explore continuing employment arrangements; not (i) enter
into any contracts of employment which (1) cannot be terminated on notice of 30
days or less or (2) provide for any severance payments or benefits covering a
period beyond the termination date of such employment contract, except as may
be required by law; (ii) amend any employee benefit plan or stock option plan,
except as may be required for compliance with applicable law or as contemplated
by this Agreement; or (iii) except with the prior written consent of US Co,
such consent not to be unreasonably withheld, increase salaries or declare
bonuses prior to the Effective Date provided that Chauvco shall be permitted to
declare and pay bonuses in an amount not to exceed $750,000 without the consent
of US Co;
(f) Prohibition of Certain Loans. Not incur any borrowings except (i)
the refinancing of indebtedness now outstanding or additional borrowings under
its existing revolving credit facilities, (ii) the prepayment by customers of
amounts due or to become due for goods sold or services rendered or to be
rendered in the future, (iii) trade payables incurred in the ordinary course of
business, (iv) other borrowings incurred in the ordinary course of business to
finance normal
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operations, (v) borrowing to finance expenditures not prohibited under
paragraph (g) (provided however with respect to items (i) to (v) the borrowing
shall not exceed current borrowing limits under current credit facilities), or
(vi) as is otherwise agreed to in writing by US Co;
(g) Prohibition of Certain Commitments. Not enter into commitments of
a capital expenditure nature or incur any contingent liability which would
exceed $1,000,000, in the aggregate, except (i) as may be necessary for the
maintenance of existing facilities, machinery and equipment in good operating
condition and repair in the ordinary course of business, (ii) as may be
required by law, (iii) as contemplated in Chauvco's Estimated Capital
Expenditures for the period July 1, 1997 to December 31, 1997, a copy of which
has been attached to the Chauvco Disclosure Letter or (iv) as is otherwise
agreed to in writing by US Co;
(h) Disposal of Assets. Not sell, dispose of, or encumber, any
property or assets, except (i) in the ordinary course of business and not
exceeding $10,000,000 in value in the aggregate, (ii) Encumbrances as may be
reasonably required in connection with borrowings under Section 4.2(f), or
(iii) as is otherwise agreed to in writing by US Co;
(i) Maintenance of Insurance. Maintain insurance upon all its
properties and with respect to the conduct of its business of such kinds and in
such amounts as is customary in the type of business in which it is engaged,
but not less than that presently carried by it;
(j) No Amendment to Charter Documents, etc. Except as otherwise
provided in this Agreement, not amend its charter documents or bylaws or other
organizational documents or merge or consolidate with or into any other
corporation or change in any manner the rights of its capital stock or the
character of its business;
(k) No Issuance, Sale, or Purchase of Securities. Except as otherwise
provided in this Agreement, not issue or sell (except upon the exercise of
outstanding options), or issue options or rights to subscribe to, or enter into
any contract or commitment to issue or sell, any shares of its capital stock or
subdivide or in any way reclassify any shares of its capital stock, or acquire,
or agree to acquire, any shares of its capital stock;
(l) Prohibition on Dividends. Not declare or pay any dividend on
shares of its capital stock or make any other distribution of assets to the
holders thereof;
(m) Supplemental Financial Statements. Deliver to US Co, within 45
days after the end of the fiscal quarter of Chauvco ending September 30, 1997,
unaudited consolidated balance sheets and related unaudited statements of
income, retained earnings and cash flows as of the end of such fiscal quarter
of Chauvco, and as of the corresponding fiscal quarter of the previous fiscal
year. Chauvco hereby represents and warrants that such unaudited consolidated
financial statements shall (i) be complete in all material respects except for
the omission of notes and schedules contained in audited financial statements,
(ii) present fairly the financial condition of Chauvco as at the dates
indicated and the results of operations for the periods indicated, (iii) shall
have been prepared in accordance with Canadian generally accepted accounting
principles applied on a consistent basis, except as noted therein and (iv)
shall contain all adjustments which Chauvco considers necessary for a fair
presentation of its results for the fiscal period;
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(n) Exclusivity; Acquisition Transactions. Unless and until this
Agreement shall have been terminated by either party pursuant to Article 6
hereof, it shall not (and it shall cause its directors, representatives, agents
or affiliates (collectively "Representatives")) not to take or cause to take
(or cause any of the Chauvco Subsidiaries to take), directly or indirectly, any
of the following actions with any party other than US Co and its designees: (i)
solicit, encourage, initiate or participate in any negotiations, inquiries or
discussions with respect to any offer or proposal (x) to acquire in any manner,
directly or indirectly, all or any significant part of the business or assets
of Chauvco and the Chauvco Subsidiaries taken as a whole or (y) to acquire in
any manner, directly or indirectly, more than 25% of the voting power of the
capital shares of Chauvco, whether by arrangement, amalgamation, merger,
consolidation, other business combination, purchase of assets, tender or
exchange offer or otherwise (each of the foregoing, an "Acquisition
Transaction"), (ii) after the date hereof furnish or provide any information
with respect to, or otherwise take any action that facilitates, any inquiries
or the making of any proposal that constitutes, or may reasonably be expected
to lead to any inquiry, offer or proposal for, an Acquisition Transaction
except in the ordinary course of business (and unrelated to an Acquisition
Transaction) and as required by law or pursuant to a governmental request for
information, (iii) enter into or execute any agreement or arrangement relating
to an Acquisition Transaction, plan of reorganization, or other agreement
calling for the sale of all or any significant part of its business and
properties or the acquisition in any manner of more than 25% of the voting
power of the capital shares of Chauvco; or (iv), except as required by law,
make or authorize any public statement, recommendation or solicitation with
respect to any Acquisition Transaction or any offer or proposal relating to an
Acquisition Transaction other than with respect to the Arrangement (provided
that neither the Board of Directors of Chauvco nor any committee thereof shall
(x) withdraw or modify, or propose to withdraw or modify, in a manner adverse
to US Co, the approval and recommendation by such Board of Directors or such
committee of this Agreement, the Plan of Arrangement or the Arrangement or (y)
approve or recommend, or propose to approve or recommend, any Acquisition
Transaction, except with respect to either clause (x) or (y) in the case of a
Superior Transaction (as hereinafter defined) and then only at or after the
termination of this Agreement pursuant to Section 6.1(g)); and
(o) Alternative Transaction. Notwithstanding the foregoing, prior to
the approval of this Agreement and the Arrangement by the holders of Chauvco
Common Shares at the Chauvco Meeting, nothing contained in this Agreement shall
prevent the Board of Directors of Chauvco (or its Representatives pursuant to
its instructions) from: (i) engaging in discussions or negotiations with (but
not soliciting or initiating such discussions or negotiations or encouraging
inquiries from) a party concerning an unsolicited Acquisition Transaction; or
(ii) providing non-public information in connection with an unsolicited
Acquisition Transaction with respect to Chauvco or the Chauvco Subsidiaries
that has previously been provided to US Co pursuant to a customary
confidentiality agreement (having terms substantially similar to the
Confidentiality Agreement (as hereinafter defined)), in each case if the
Chauvco Board of Directors first determines in good faith, based on the advice
of outside legal counsel, that such action is required by reason of the
fiduciary duties of the members of the Board of Directors of Chauvco to Chauvco
or to Chauvco's shareholders under applicable law and that such unsolicited
Acquisition Transaction involves consideration to the shareholders of Chauvco
with a value that the Board of Directors of Chauvco in good faith believe,
after receiving advice from Chauvco's financial advisors, is superior to the
consideration to the shareholders provided for in the Arrangement; provided
that in each such event, Chauvco first notifies US Co of such determination by
the Chauvco Board of Directors and further notifies US Co of the fact that it
is furnishing information to or entering into discussions or negotiations with
a
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person or entity and Chauvco keeps US Co informed of the status (including all
terms and conditions thereof but not the identity of such person or entity) of
any such discussions or negotiations. Except to the extent expressly referenced
in this Section, nothing in this Section, however, shall relieve Chauvco from
complying with the other terms of this Agreement. If Chauvco or any Chauvco
Subsidiary receives any unsolicited offer or proposal to enter negotiations
relating to an Acquisition Transaction, Chauvco shall immediately notify US Co
thereof. On the date hereof, Chauvco shall immediately cease and cause to be
terminated any existing solicitation, initiation, encouragement, activity,
discussion or negotiation with any parties conducted heretofore by Chauvco or
any Representatives with respect to any Acquisition Transaction and, in
connection therewith, Chauvco shall exercise all rights to require the return
of information regarding Chauvco previously provided to such parties. In no
event may the Board of Directors of Chauvco or any committee thereof (x)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to US
Co, the approval and recommendation by such Board of Directors or such
committee of this Agreement, the Plan of Arrangement or the Arrangement or (y)
approve or recommend, or propose to approve or recommend, any Acquisition
Transaction, except with respect to either clause (x) or (y) in the case of a
Superior Proposal and then only at or after the termination of this Agreement
pursuant to Section 6.1(g). As used in this Agreement, a "Superior Proposal"
means (x) a bona fide written offer for an Acquisition Transaction to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the shares and/or voting power of the capital shares of
Chauvco then outstanding or all or substantially all the assets of Chauvco, and
(y) otherwise on terms which the Board of Directors of Chauvco determines in
its good faith judgment to be more favorable to Chauvco than the Arrangement
(based on the written opinion, with only customary qualifications, of Chauvco's
independent financial advisor that the value of the consideration provided for
in such proposal is superior to the value of the consideration provided for in
the Arrangement), for which financing, to the extent required, is then
committed or which, in the good faith judgment of the Board of Directors of
Chauvco, based on advice from Chauvco's independent financial advisor, is
reasonably capable of being financed by such third party and for which the
Board of Directors of Chauvco determines, in its good faith judgment, that such
proposed transaction is reasonably likely to be consummated without undue
delay;
(p) Chauvco Options. Ensure that the consent of the Optionholders as a
class is either obtained or not required;
(q) Chauvco Affiliates. On or prior to the Effective Time, cause its
Affiliates (as such term is defined in the Exchange Act) to execute and deliver
customary letters in connection with Rule 145 of the Securities Act;
(r) Shareholders Rights Plan. Take such action as may be necessary so
that the Chauvco SRP shall be waived immediately prior to the Effective Time
and not apply to the transactions contemplated herein. Chauvco shall utilize
its best efforts to keep the Chauvco SRP in full force and effect unamended
until such waiver; and
(s) International Contracts. Not enter into any binding contracts with
any party in any country upon which the U.S. Government has imposed
international economic sanctions with respect to U.S. persons doing business.
<PAGE> 31
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4.3 ADDITIONAL AGREEMENTS OF US CO
US Co agrees that from the date hereof to the Effective Date, it will,
and will cause each of the US Co Subsidiaries to:
(a) Operate in Ordinary Course. Other than as contemplated by this
Agreement, operate its business only in the usual, regular, and ordinary manner
and, to the extent consistent with such operation, use all commercially
reasonable efforts to preserve intact its present business organization, keep
available the services of its present officers and employees, and preserve its
relationships with customers, suppliers, distributors, and others having
business dealings with it;
(b) Maintenance and Disposition of Properties. Maintain all of its
property and assets in customary repair, order, and condition, reasonable wear
and use and damage by fire or unavoidable casualty excepted and only dispose
thereof (and such disposal shall be permitted) in the ordinary course of
business;
(c) Maintenance of Books and Records. Maintain its books of account
and records in the usual, regular, and ordinary manner, in accordance with
generally accepted accounting principles applied on a consistent basis;
(d) Compliance with Law. Duly comply in all material respects with all
laws applicable to it and to the conduct of its business;
(e) Maintenance of Insurance. Maintain insurance upon all its
properties and with respect to the conduct of its business of such kinds and in
such amounts as is customary in the type of business in which it is engaged,
but not less than that presently carried by it;
(f) No Amendment to Charter Documents, etc. Except as otherwise
contemplated in and subject to Section 1.4, not amend its charter documents or
merge or consolidate with or into any other corporation without the prior
written consent of Chauvco (provided that such consent shall not be necessary
if such transaction will not adversely affect the ability of Chauvco
shareholders to exchange Exchangeable Shares after the Effective Date as
contemplated herein) or change in any manner the rights of its capital stock or
the character of its business provided nothing herein shall prevent the
issuance of preferred stock by US Co and the filing of Certificates of
Designation with the Secretary of State of Delaware in connection therewith;
(g) Prohibition on Dividends. Except for US Co's regular semi-annual
5(cent)/share dividends, or any dividend pursuant to the implementation or
maintenance of a shareholder rights plan or similar arrangement which plan or
arrangement makes adequate provision with respect to the holders of
Exchangeable Shares, not declare or pay any dividend on shares of its capital
stock or make any other distribution of assets to the holders thereof;
(h) Supplemental Financial Statements. Deliver to Chauvco, within 45
days after the end of the fiscal quarter of US Co ending September 30, 1997,
unaudited consolidated balance sheets and related unaudited statements of
income, retained earnings and cash flows for the period ending and as of the
end of such quarter of US Co. US Co hereby represents and warrants that such
unaudited consolidated financial statements shall (i) be complete in all
material respects except for
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the omission of notes and schedules contained in audited financial statements,
(ii) present fairly the financial condition of US Co as at the dates indicated
and the results of operations for the periods indicated, (iii) shall have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis, except as noted therein and (iv)
shall contain all adjustments which US Co considers necessary for a fair
presentation of its results for the fiscal period; and
(i) Listings. Use its commercially reasonable efforts to cause, with
the cooperation and assistance of Chauvco, the Exchangeable Shares to be listed
on the TSE.
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF CHAUVCO
The obligations of Chauvco to consummate and effect the transactions
contemplated hereunder shall be subject to the satisfaction of the following
conditions, or to the waiver thereof by Chauvco in the manner contemplated by
this Agreement before the Effective Date:
(a) Representations and Warranties of US Co True at Effective Date.
The representations and warranties of US Co herein contained shall be accurate
in all material respects at the Effective Date, with the same effect as though
made at such date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case as of such date), and except
to the extent of the failure of such representations to be true and correct
would not in the aggregate have a Material Adverse Effect on US Co, and except
as affected by transactions permitted or contemplated by this Agreement; US Co
shall have performed and complied with all covenants required by this Agreement
to be performed or complied with, in all material respects, by US Co before the
Effective Date; and US Co shall have delivered to Chauvco a certificate, dated
the Effective Date and signed by its chairman of the board or its president on
behalf of US Co, and by its chief financial or accounting officer, and its
secretary, to both such effects;
(b) Opinion of US Co Counsel. Chauvco shall have received opinions,
dated as of the Effective Date, from Vinson & Elkins, L.L.P., United States
counsel for US Co, and from MacKimmie Matthews, Canadian counsel for US Co in
form and substance satisfactory to Chauvco dealing with due authorization,
execution, delivery and enforceability of documents and such other matters as
US Co shall agree to;
(c) Consents of Certain Parties in Privity with US Co. Chauvco shall
have received all written consents, assignments, waivers, authorizations or
other certificates necessary to provide for the continuation in full force and
effect of all material contracts and leases of US Co and for US Co to
consummate the transactions contemplated hereby, except when the failure to
receive such consents or other certificates would not have a Material Adverse
Effect on US Co;
(d) Shareholder Approval. This Agreement, the Arrangement and the
other transactions contemplated hereby shall have been approved and adopted by
the Chauvco shareholders in accordance with applicable law and Chauvco's
articles of amalgamation and bylaws;
<PAGE> 33
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(e) US Co Approvals. The issuance of US Co Common Stock from time to
time upon the exchange of the Exchangeable Shares shall have been approved by
the US Co stockholders in accordance with the rules of the NYSE and applicable
law;
(f) No Legal Action. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the consummation
of the Arrangement shall have been issued by any Canadian or United States
federal, provincial or state court and remain in effect, nor shall any
proceeding seeking any of the foregoing be pending. There shall be no order,
decree or ruling by any governmental agency or threat thereof, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to
the Arrangement, which would prohibit or render illegal the transactions
contemplated by this Agreement;
(g) Court Approval. The Court shall have issued its final order
approving the Arrangement in form and substance satisfactory to US Co and
Chauvco (such approvals not to be unreasonably withheld or delayed by US Co or
Chauvco) and reflecting the terms hereof;
(h) Commissions, etc. All necessary orders shall have been obtained
from the Commissions and other relevant United States and Canadian securities
regulatory authorities in connection with the Arrangement. All waiting periods
required by HSR shall have expired with respect to the transactions
contemplated by this Agreement, or early termination with respect thereto shall
have been obtained, without the imposition of any governmental request or order
requiring the sale or disposition or holding separate (through a trust or
otherwise) of particular assets or businesses of Chauvco or US Co. US Co shall
have filed all notices and information (if any) required under Part IX of the
Competition Act (Canada) and the applicable waiting periods and any extensions
thereof shall have expired or the parties shall have received an Advance Ruling
Certificate pursuant to Section 102 of the Competition Act (Canada) setting out
that the Director under such Act is satisfied he would not have sufficient
grounds on which to apply for an order in respect of the Arrangement. The
Arrangement shall have received the allowance or approval or deemed allowance
or approval by the responsible Minister under the Investment Canada Act in
respect of the Arrangement, to the extent such allowance or approval is
required;
(i) SEC Filings. The Forms F-4 and S-4, if filed, and the Form S-3
shall have been declared effective under the Securities Act and shall not be
the subject of any stop-order or proceedings seeking a stop-order, and the
Joint Proxy Statement shall on the Closing Date not be subject to any similar
proceedings commenced or threatened by the SEC or the Commissions;
(j) Appointment to US Co Board. US Co shall cause James R. Baroffio to
be appointed as a director of US Co on or prior to the Effective Date as a
Class II Director to serve until US Co's 1999 annual stockholders' meeting; Guy
J. Turcotte to be nominated as a director of US Co for election at US Co's 1998
annual stockholders' meeting and Mr. Baroffio to be nominated for re-election
at US Co's 1999 annual stockholders' meeting. US Co shall put forth Messrs.
Turcotte and Baroffio for election to its board of directors as aforesaid and
will cause to be solicited proxies for its stockholder's meetings in favour of
the election of such individual.
(k) Listings. The Exchangeable Shares shall be listed on the TSE,
subject to notice of issuance, and the US Co Common Stock issuable pursuant to
the Arrangement and upon exchange
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of the Exchangeable Shares shall have been approved for listing on the NYSE,
subject to notice of issuance;
(l) Certificates and Resolutions. Chauvco shall have received such
other certificates and resolutions of US Co as may be reasonably required in
connection with the consummation of this Agreement; and
(m) Material Adverse Effect. There shall have been no event, change or
effect after the date hereof and on or prior to the Effective Date resulting in
a Material Adverse Effect on US Co.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF US CO
The obligations of US Co to consummate and effect the transactions
contemplated hereunder shall be subject to the satisfaction of the following
conditions, or to the waiver thereof by US Co in the manner contemplated by
this Agreement, before the Effective Date:
(a) Representations and Warranties of Chauvco True at Effective Date.
The representations and warranties of Chauvco herein contained shall be
accurate in all material respects at the Effective Date, with the same effect
as though made at such date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case as of such date),
and except to the extent of the failure of such representations to be true and
correct would not in the aggregate have a Material Adverse Effect on Chauvco
and except as affected by transactions permitted or contemplated by this
Agreement; Chauvco shall have performed and complied with all covenants
required by this Agreement to be performed or complied with, in all material
respects, by Chauvco before the Effective Date; and Chauvco shall have
delivered to US Co a certificate, dated the Effective Date and signed by its
chairman of the board or its president on behalf of Chauvco and by its chief
financial or accounting officer, and its secretary, to both such effects;
(b) Opinion of Chauvco Counsel. US Co shall have received opinions,
dated as of the Effective Date, from Baker & Botts, L.L.P., United States
counsel for Chauvco, and from Bennett Jones Verchere, Canadian counsel for
Chauvco in form and substance satisfactory to Chauvco dealing with due
authorization, execution, delivery and enforceability of documents and such
other matters as Chauvco shall agree to;
(c) Consents of Certain Parties in Privity with Chauvco. US Co shall
have received all written consents, assignments, waivers, authorizations or
other certificates necessary to provide for the continuation in full force and
effect of all material contracts and leases of Chauvco and for Chauvco to
consummate the transactions contemplated hereby, except when the failure to
receive such consents or other certificates would not have a Material Adverse
Effect on Chauvco;
(d) Stockholder Approval. The issuance of US Co Common Stock hereunder
and from time to time upon exchange of the Exchangeable Shares shall have been
approved by the US Co stockholders in accordance with the rules of the NYSE and
applicable law;
(e) Chauvco Approvals. This Agreement, the Arrangement and the other
transactions contemplated hereby shall have been approved and adopted by the
Chauvco shareholders in accordance with applicable law and Chauvco's articles
of amalgamation and bylaws, and Chauvco shall not have received on or prior to
the Effective Time notice from the holders of more than 5%
<PAGE> 35
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of the Chauvco Common Shares of their intention to exercise their rights of
dissent under Section 184 of the ABCA;
(f) No Legal Action. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the consummation
of the Arrangement shall have been issued by any Canadian or U.S. federal,
provincial or state court and remain in effect, nor shall any proceeding
seeking any of the foregoing be pending. There shall be no order, decree or
ruling by any governmental agency or threat thereof, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Arrangement, which would prohibit or render illegal the transactions
contemplated by this Agreement;
(g) Court Approval. The Court shall have issued its final order
approving the Arrangement in form and substance satisfactory to Chauvco and US
Co (such approvals not to be unreasonably withheld or delayed by Chauvco or US
Co) and reflecting the terms hereof;
(h) Commissions, etc. All necessary orders shall have been obtained
from the Commissions and other relevant United States and Canadian securities
regulatory authorities in connection with the Arrangement. All waiting periods
required by HSR shall have expired with respect to the transactions
contemplated by this Agreement, or early termination with respect thereto shall
have been obtained, without the imposition of any governmental request or order
requiring the sale or disposition or holding separate (through a trust or
otherwise) of particular assets or businesses of US Co or Chauvco. Chauvco
shall have filed all notices and information (if any) required under Part IX of
the Competition Act (Canada) and the applicable waiting periods and any
extensions thereof shall have expired or the parties shall have received an
Advance Ruling Certificate pursuant to Section 102 of the Competition Act
(Canada) setting out that the Director under such Act is satisfied he would not
have sufficient grounds on which to apply for an order in respect of the
Arrangement. The Arrangement shall have received the allowance or approval or
deemed allowance or approval by the responsible Minister under the Investment
Canada Act in respect of the Arrangement, to the extent such allowance or
approval is required, on terms and conditions satisfactory to US Co, acting
reasonably;
(i) SEC Filings. The Forms S-3 and S-4 and the Form F-4, if filed,
shall have been declared effective under the Securities Act and shall not be
the subject of any stop order or proceedings seeking a stop-order and the Joint
Proxy Statement shall on the Closing Date not be subject to any similar
proceedings commenced or threatened by the SEC or the Commissions; and
(j) Certificates and Resolutions. US Co shall have received such other
certificates and resolutions of Chauvco as may be reasonably required in
connection with the consummation of this Agreement.
(k) Material Adverse Effect. There shall have been no event, change or
effect after the date hereof and on or prior to the Effective Date resulting in
a Material Adverse Effect on Chauvco.
<PAGE> 36
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ARTICLE 6
TERMINATION
6.1 TERMINATION
This Agreement may be terminated at any time prior to the Effective
Time, whether before or after approval of the transactions contemplated hereby
by the stockholders of US Co or the shareholders of Chauvco, as follows:
(a) by mutual agreement of Chauvco and US Co;
(b) by Chauvco, in the event of a breach by US Co of any
representation, warranty, covenant or other agreement contained in this
Agreement which (i) would give rise to the failure of a condition set forth in
Section 5.1(a) and (ii) has not been cured within 15 business days after
written notice thereof from Chauvco (except that no cure period shall be
provided for a matter which by its nature cannot be cured and in no event shall
such cure period extend beyond the Termination Date) provided that Chauvco is
not then in material breach (giving effect to any applicable cure periods) of
any representation, warranty, covenant or other agreement contained in this
Agreement;
(c) by US Co., in the event of a breach by Chauvco of any
representation, warranty, covenant or other agreement contained in this
Agreement which (i) would give rise to the failure of a condition set forth in
Section 5.2(a) and (ii) has not been cured within 15 business days after
written notice thereof from US Co (except that no cure period shall be provided
for a matter which by its nature cannot be cured and in no event shall such
cure period extend beyond the Termination Date) provided that US Co is not then
in material breach (giving effect to any applicable cure periods) of any
representation, warranty, covenant or other agreement contained in this
Agreement;
(d) by Chauvco if the stockholders of US Co do not approve the
issuance of US Co Common Stock issuable upon exchange of Exchangeable Shares or
any other matters related to the Plan of Arrangement requiring their approval
at the US Co Stockholders Meeting;
(e) by US Co if the shareholders of Chauvco do not approve the Plan of
Arrangement at the Chauvco Meeting;
(f) by either party, if any of such party's conditions precedent under
Article 5 for Closing (as defined in Section 7.2) the Arrangement shall not
have been satisfied or waived on or before 5:00 p.m., Calgary, Alberta time on
March 31, 1998 (the "Termination Date"), other than as a result of a breach of
this Agreement by the terminating party;
(g) by Chauvco prior to obtaining the approval by the shareholders of
Chauvco of the Plan of Arrangement, if (i) the Board of Directors of Chauvco
shall have determined in good faith, based on the advice of outside counsel,
that it is necessary, in order to comply with its fiduciary duties to Chauvco
or its shareholders under applicable law, to enter into an agreement with
respect to or to consummate a transaction constituting a Superior Proposal,
(ii) Chauvco shall have given notice to US Co advising US Co that Chauvco has
received a Superior Proposal from a third party, specifying the terms and
conditions of such Superior Proposal and that Chauvco intends to terminate this
Agreement in accordance with this Section 6.1(g), and (iii) either (A) US Co
shall not have revised its takeover proposal within five business days after
the date on which such notice is deemed
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to have been given to US Co, or (B) if US Co within such period shall have
revised its takeover proposal, the Board of Directors of Chauvco, after
receiving advice from Chauvco's financial advisors, shall have determined in
its good faith judgment that the third party's Acquisition Transaction is
superior to US Co's revised takeover proposal; provided that Chauvco may not
effect such termination pursuant to this Section 6.1(g) unless Chauvco has
contemporaneously with such termination tendered payment to US Co, or its
designee, of the Termination Fee that is due US Co or its designee pursuant to
Section 6.4(c).
6.2 NOTICE OF TERMINATION
Any termination of this Agreement under Section 6.1 above will be
effective by the delivery of written notice by the terminating party to the
other party hereto.
6.3 EFFECT OF TERMINATION
Subject to Section 6.4, in the event of termination of this Agreement
by either Chauvco or US Co as provided in Section 6.1, this Agreement shall
forthwith become void and have no effect, and there shall be no liability or
obligation on the part of US Co or Chauvco or their respective officers or
directors, except that (i) the provisions of the confidentiality and standstill
agreements dated May 23, 1997 and July 28, 1997, respectively, between Chauvco
and US Co shall survive any such termination and abandonment (the
"Confidentiality Agreement"), and (ii) no party shall be released or relieved
from any liability arising from the breach by such party of any of its
representations, warranties, covenants or agreements as set forth in this
Agreement.
6.4 TERMINATION FEES
Notwithstanding Section 6.3:
(a) if this Agreement is terminated by Chauvco pursuant to Section
6.1(d) as a result of the failure of the stockholders of US Co to approve the
matters contemplated in Section 6.1(d), then US Co shall pay to Chauvco (by
wire transfer or cashier's cheque) a fee of $25 million within two business
days of the delivery of the notice of termination pursuant to Section 6.2.
Chauvco shall not be entitled to receive such payment if, at the time of
delivery of the applicable notice of termination pursuant to Section 6.2,
Chauvco is in material breach of this Agreement;
(b) if this Agreement is terminated by US Co pursuant to Section
6.1(e) as a result of the failure of the shareholders of Chauvco to approve the
matters contemplated in Section 6.l (e), then Chauvco shall pay to US Co (by
wire transfer or cashier's cheque) a fee of $25 million within two business
days of the delivery of the notice of termination pursuant to Section 6.2. US
Co shall not be entitled to receive such payment if, at the time of delivery of
the applicable notice of termination pursuant to Section 6.2, US Co is in
material breach of this Agreement;
(c) if this Agreement is terminated pursuant to Section 6.1(g), then
Chauvco shall pay to US Co (by wire transfer or cashier's cheque) a fee of $40
million concurrently with the delivery of the notice of termination pursuant to
Section 6.2. US Co shall not be entitled to receive such payment if, at the
time of delivery of the applicable notice of termination pursuant to Section
6.2, US Co is in material breach of this Agreement or US Co's stockholders have
disapproved any of the matters contemplated in Section 6.1(d);
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(d) if this Agreement is terminated pursuant to Section 6.1(e) and
within six months of such termination definitive documentation with respect to
an Acquisition Transaction has been entered into or 50% or more of the
outstanding capital shares of Chauvco has been acquired pursuant to a tender
offer made as an Acquisition Transaction, then Chauvco shall pay (by wire
transfer or cashier's cheque), in addition to the termination fee contemplated
in Section 6.4(b), a fee of $15 million contemporaneously with the closing of
such Acquisition Transaction; and
(e) the obligation of the paying party to pay any termination fee set
forth in this Section 6.4 is in lieu of any damages or any other payment which
such party might otherwise be obligated to pay to the receiving party as a
result of any termination for which payment is due under this Section 6.4.
ARTICLE 7
ADDITIONAL AGREEMENTS
US Co and Chauvco each agree to take the following actions after the
execution of this Agreement:
7.1 MEETINGS
Chauvco and US Co shall each duly call a meeting of its stockholders
to be held within 45 days after the SEC has indicated that it has no further
comments on the Joint Proxy Statement for the purpose of (a) in the case of
Chauvco, voting upon the Plan of Arrangement and the transactions contemplated
hereby and thereby, and (b) in the case of US Co, voting upon a proposal to
approve the issuance of such number of shares of US Co Common Stock as are
necessary to consummate the Arrangement and issue upon exchange of Exchangeable
Shares and each shall, subject to Section 4.2(o), through its board of
directors, recommend to their stockholders approval of such matters and shall
coordinate and cooperate with respect to the timing of such meetings.
7.2 THE CLOSING
Subject to the termination of this Agreement as provided in Article 6,
the closing of the transactions contemplated by this Agreement (the "Closing")
will take place at the offices of Bennett Jones Verchere, Calgary, Alberta,
Canada on a date (the "Closing Date") and at a time to be mutually agreed upon
by the parties, which date shall be no later than the fifth business day after
all conditions to Closing set forth herein shall have been satisfied or waived,
unless another place, time and date is mutually selected by Chauvco and US Co.
7.3 ANCILLARY DOCUMENTS/RESERVATION OF SHARES/SPECIAL VOTING SHARES
(a) Provided all other conditions of this Agreement have been
satisfied or waived, on the Closing Date, the Articles of Arrangement shall be
filed pursuant to Part 15 of the ABCA to give effect to the Plan of
Arrangement.
(b) On the Effective Date:
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(i) US Co shall execute and deliver a Support Agreement
containing the terms and conditions set forth in
Exhibit B hereto, together with such other terms and
conditions as may be agreed to by the parties hereto
acting reasonably; and
(ii) US Co, US Co Sub and the Depositary shall execute
and deliver a Voting and Exchange Trust Agreement
containing the terms and conditions set forth in
Exhibit C hereto, together with such other terms and
conditions as may be agreed to by the parties hereto
acting reasonably.
(c) On or before the Effective Date, US Co will:
(i) reserve for issuance such number of shares of US Co
Common Stock as shall be necessary to give effect to
this agreement plus the exchange of the Exchangeable
Shares; and
(ii) designate a series of its preferred shares as
"Special Voting Stock", such series having the
rights, restrictions, privileges and conditions set
forth in Exhibit E hereto.
7.4 INDEMNIFICATION AND RELATED MATTERS
(a) US Co agrees that all rights to indemnification existing in favor
of the present or former directors and officers of Chauvco (as such) or any of
the Chauvco Subsidiaries or present or former directors and officers (as such)
of Chauvco or any of the Chauvco Subsidiaries serving or who served at
Chauvco's or any of the Chauvco Subsidiaries' request as a director or officer
of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, as provided in Chauvco's charter or bylaws or similar
documents of any of the Chauvco Subsidiaries in effect as of the date hereof
with respect to matters occurring prior to the Effective Time, shall survive
and shall continue in full force and effect and without modification for a
period of not less than the statutes of limitations applicable to such matters.
(b) From and after the Effective Time, US Co shall and shall cause
Chauvco to indemnify and hold harmless to the fullest extent permitted under
the ABCA, each director and officer of US Co Sub, Chauvco or any Chauvco
Subsidiary including, without limitation, officers and directors, serving on or
prior to the date hereof against any costs and expenses (including reasonable
attorney's fees on a solicitor and his own client basis), judgments, fines,
losses, claims and damages and liabilities, and amounts paid in settlement
thereof with the consent of the indemnifying party, in connection with any
claim, action, suit, proceeding or investigation relating to any of the
transactions contemplated hereby or the Arrangement. In the event of any such
claim, action, suit, proceeding or investigation, US Co shall cause Chauvco to
pay the reasonable fees and expenses of counsel in advance of the final
disposition of any such claim, action, suit, proceeding or investigation to the
fullest extent permitted by law subject to the limitations imposed by the ABCA.
Without limiting the foregoing, in the event any such claim, action, suit,
proceeding or investigation is brought against any indemnified parties, (i) the
indemnified parties may retain counsel reasonably satisfactory to US Co and,
subject to limitations imposed by the ABCA, Chauvco shall (or US Co shall cause
Chauvco to) pay all reasonable fees and expenses of such counsel for the
indemnified parties promptly as statements therefor are received; and (ii) US
Co will use all reasonable efforts to assist in the defense
<PAGE> 40
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of such matter; provided, however, that neither Chauvco nor US Co shall be
liable for any settlement effected without its prior written consent. Any
indemnified party wishing to claim indemnification under this section, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify US Co (but the failure to so notify shall not relieve a party from any
liability which it may have under this section except to the extent such
failure prejudices such party). The indemnified parties as a group may retain
only one law firm in any jurisdiction to represent them with respect to each
such matter unless such counsel determines that there is, under applicable
standards of professional conduct, a conflict on any significant issue between
the positions of any two or more indemnified parties, in which event such
additional counsel may be required to be retained by the indemnified parties.
(c) Subject to limitations imposed by the ABCA, Chauvco shall (or US
Co shall cause Chauvco to) pay all expenses, including attorney's fees on a
solicitor and his own client basis, as the same may be incurred by any
indemnified parties in any action by any indemnified party or parties seeking
to enforce the indemnity or other obligations provided for in this section;
provided, however, that Chauvco will be entitled to reimbursement for any
advances made under this section to any indemnified party who ultimately proves
unsuccessful in enforcing the indemnity as finally determined by a
non-appealable judgment in a court of competent jurisdiction, and payment of
such expenses in advance of the final disposition of the action shall be made
only upon receipt of any undertaking by the indemnified party to reimburse all
amounts advanced if such action ultimately proves unsuccessful.
(d) There shall be maintained in effect for not less than six years
from the Effective Time the current policies of the directors' and officers'
liability insurance maintained by Chauvco in the amounts and with the coverages
in effect on the date of this Agreement. US Co may, however, substitute
therefor policies of at least the same coverage containing terms and conditions
which are no less advantageous, provided that such substitution shall not
result in any gaps or lapses in coverages with respect to matters occurring
prior to the Effective Time.
(e) This section, which shall survive the consummation of this
Agreement and the Arrangement, is intended to benefit each person or entity
indemnified hereunder.
7.5 LOCK-UP AGREEMENTS
Concurrently with the execution of this Agreement, Chauvco shall cause
those shareholders of Chauvco listed in Exhibit E hereto and US Co shall cause
those shareholders of US Co listed in Exhibit E hereto to execute and deliver
to the other lock-up agreements in such forms as may be mutually agreed by the
parties, acting reasonably.
7.6 EMPLOYEE MATTERS
Subject to applicable law, US Co, the US Co Subsidiaries, and the
employee benefit plans and programs ("US Co Benefit Plans") of US Co shall
recognize the number of years of service currently recognized by Chauvco of
each individual employed by Chauvco or a Chauvco Subsidiary immediately prior
to the Effective Date, provided nothing in this provision shall require US Co
to amend any of the US Co Benefit Plans where such amendment would require
regulatory filings or approvals.
<PAGE> 41
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7.7 ANCILLARY TRANSACTIONS - GABON AND OTHER INTERNATIONAL PROPERTIES
It is acknowledged and agreed that:
(a) Chauvco shall cause the entities referred to in Sections 1.1 (a)
through (c) to complete the transactions contemplated therein including,
without limitation, the subscription for the CRI Shares for an aggregate cash
subscription price of US$5,000,000 plus the fair market value of the Gabon
Securities on the Effective Date, and the transfer of the Gabon Securities from
CR to CRI for a cash purchase price equal to the fair market value of the Gabon
Securities on the Effective Date leaving US$5,000,000 as cash in CRI;
(b) Chauvco has determined that the fair market value of the Gabon
Securities on the date hereof is approximately US$60,000,000 relying on (i) the
bidding process in connection with the sale of Chauvco, (ii) the reserve and
evaluation reports prepared by Chauvco's independent engineers, (iii) the
review and recommendation of Chauvco's senior management which established a
range of values at various discount factors and an assessment of the
exploration and development potential of the applicable properties, and (iv) an
independent review conducted to confirm and support the allocation to the CRI
Shares by Chauvco of a portion of the consideration received by the Chauvco
Shareholders. The fair market value of the Gabon Securities on the Effective
Date shall be revalued and determined by Chauvco using consistent principles;
(c) notwithstanding the determination of the fair market value of the
Gabon Securities on the Effective Date under Section 7.7(b), unless the parties
otherwise agree, the amount which will be payable with respect to such value
may not exceed US$100,000,000;
(d) the purchase and sale agreement between CR and CRI with respect to
the transfer of CR's interest in the Gabon Securities to CRI shall be in a form
mutually acceptable to Chauvco and US Co and shall: (i) provide that CRI will
assume and be responsible for and will indemnify, defend and hold CR, Chauvco
and US Co Sub harmless from and against any liabilities CR, Chauvco or US Co
Sub may be or become subject to if any taxing authority challenges the value
placed on the Gabon Securities or the corresponding value of the CRI Shares
transferred to the holders of Chauvco Common Shares and Optionholders; (ii)
provide that CRI will assume all liabilities with respect to the underlying
operations of the Gabon Subsidiaries being purchased; (iii) provide that CRI
will assume and be responsible for and will indemnify, defend and hold CR,
Chauvco and US Co Sub harmless from and against any liabilities CR, Chauvco and
US Co Sub may be or become subject to which relate to the assets, business,
operations, debts or liabilities of CR and Chauvco which are being purchased by
CRI and with respect to the transactions contemplated in this Section 7.7
(provided that with respect to tax matters, the extent of the indemnity shall
be limited to that set out in (i)); (iv) provide that CR and Chauvco will
assume and be responsible for and will indemnify, defend and hold CRI harmless
from and against any liabilities CRI may be or become subject to which relate
to the assets, business, operations, debts or liabilities of CR and Chauvco
which are not being purchased by CRI; (v) provide that Chauvco, subject to
confidentiality provisions, will retain copies of the books and records of such
companies; and (vi) provide that the Chauvco name shall not be used in
connection with, and CRI shall not engage in, any oil and gas operations in the
Western Canadian sedimentary basin for a period of one (1) year from the
Effective Date; and (vii) provide that CRI will use its best efforts to have
Chauvco released from any and all guarantees Chauvco has given to Gabonese
Government;
<PAGE> 42
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(e) Chauvco will provide an additional $13,500,000 of funding into the
Gabon Subsidiaries through CR between the date hereof and the Effective Date
which shall remain in the Gabon Subsidiaries for their operations and shall not
be repaid to CR except to the extent that the same may be reflected in the
determination of the fair market value of the Gabon Securities on the Effective
Date pursuant to Section 7.7(b);
(f) Chauvco shall be responsible for all costs and expenses
(including, without limitation, costs related to establishment and promotion of
CRI and legal fees) incurred on or prior to the Effective Date to implement the
transactions contemplated in this Section 7.7;
(g) CRI shall on or prior to the Effective Date, be provided with
copies of all confidentiality agreements entered into by Chauvco in connection
with the strategic alternatives review process of Chauvco; and
(h) the representations and warranties of Chauvco contained in this
Agreement shall be read as if the transactions in this Section 7.7 shall have
already been completed.
7.8 ANCILLARY TRANSACTIONS - ALLIANCE
It is acknowledged and agreed that:
(a) on or prior to the Effective Date, Chauvco shall enter into a
transaction causing all of its rights and assets (including, without
limitation, copies of all books and records related thereto) relating to the
Alliance pipeline project (the "APP") to be distributed to or through an entity
(the "Alliance Entity") for a cash payment to Chauvco from the Alliance Entity
of $13,500,000 to be made on or prior to the Effective Date;
(b) Chauvco shall be entitled to provide funding and commitments in
respect of the regular capital funding and commitments of the APP between the
date hereof and Closing provided that such funding shall be repaid, and such
commitments shall be assumed, by the Alliance Entity on or before the Effective
Time. Chauvco shall not be entitled to commit to provide any additional funding
to the APP other than in respect of such regularly scheduled capital
commitments (and shall notify US Co as and when such funding or commitments are
provided) and, in particular, Chauvco shall not be entitled to commit to the
approximate $260 million equity financing commitment due in October, 1997;
(c) the Alliance Entity shall be responsible for all costs and
expenses (including, without limitation, costs related to establishment and
promotion of the Alliance Entity) incurred on or prior to the Effective Date to
implement the transactions contemplated in this Section 7.8;
(d) the purchase and sale agreement between the Alliance Entity and
Chauvco with respect to the transfer of Chauvco's interest in the APP to the
Alliance Entity will be in a form mutually acceptable to Chauvco and US Co and
provide that (i) the Alliance Entity will assume and be responsible for and
will indemnify, defend and hold harmless Chauvco from and against any
liabilities Chauvco may be or become subject, including any tax liability, to
which relate in any manner whatever to the transfer of Chauvco's interest in
the APP to the Alliance Entity and with respect to the transactions
contemplated in this Section 7.8, (ii) Chauvco will assume and be responsible
for and will indemnify, defend and hold harmless the Alliance Entity from and
against
<PAGE> 43
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any liabilities the Alliance Entity may be or become subject to which relate to
the assets, business, debts and liabilities of Chauvco unrelated to the APP,
and (iii) Chauvco, subject to confidentiality provisions, will retain copies of
the books and records relating to Chauvco's interest in the APP; and
(e) the representations and warranties of Chauvco contained in this
Agreement shall be read as if the transactions in this Section 7.8 shall have
already been completed.
7.9 CHAUVCO TRADEMARKS AND TRADE NAMES
US Co covenants, whenever so requested by CRI, to execute or cause
Chauvco to execute any and all applications, assignments or other instruments
which CRI shall deem necessary in order to apply for and obtain registered
proprietary rights for the trademarks, trade names and domain name to be
conveyed to CRI pursuant to the Plan of Arrangement and in order to assign and
convey to CRI the sole and exclusive right, title and interest in and to the
said trademarks, trade names and domain name.
7.10 QUALIFICATION OF CRI SHARES
On or before the Effective Date, the CRI Shares shall be qualified for
distribution by prospectus which will be filed with the securities commissions
in each of the provinces of Canada. Chauvco will sign the prospectus as a
promoter pursuant to applicable Canadian securities legislation. Chauvco shall
cause CRI to make an application to the TSE to list the CRI Shares on such
exchange. Alternatively, the CRI Shares shall be issued pursuant to an
exemption from prospectus requirements.
ARTICLE 8
MISCELLANEOUS
8.1 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties of the parties contained in this
Agreement will expire and be of no further force or effect at the Closing. All
agreements and covenants of the parties shall survive the Closing, except as
otherwise set forth in this Agreement.
8.2 NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, by facsimile (receipt confirmed)
or mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
<PAGE> 44
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(a) if to US Co to:
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Attention: General Counsel
Facsimile No. (972) 402-7057
with a copy to Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2975
Attention: Michael D. Wortley
Facsimile No. (214) 220-7716
and MacKimmie Matthews
700, 401 - 9th Avenue S.W.
Calgary, Alberta
T2P 2M2
Attention: Jack MacGillivray
Facsimile No. (403) 232-0888
(b) if to Chauvco to:
Chauvco Resources Ltd.
2900, 255 - 5th Avenue S.W.
Calgary, Alberta
T2P 3G6
Attention: President
Facsimile No. (403) 269-9497
with a copy to Bennett Jones Verchere
4500 Bankers Hall East
855 2nd Street S.W.
Calgary, Alberta
T2P 4K7
Attention: Martin A. Lambert
Facsimile No. (403) 265-7219
and Baker & Botts L.L.P.
One Shell Plaza
910 Louisiana
Houston, Texas
77002-4995
Attention: C. Michael Watson
Facsimile No. (713) 229-1522
<PAGE> 45
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8.3 INTERPRETATION
When a reference is made in this Agreement to Sections or Exhibits,
such reference shall be to a Section or Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
therein shall be deemed in each case to be followed by the words "without
limitation." The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
8.4 COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to each of the other parties, it being understood that all parties
need not sign the same counterpart.
8.5 MISCELLANEOUS
This Agreement, each of the agreements attached as an exhibit hereto
and any other documents referred to herein or contemplated hereby (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
other than the confidentiality and standstill agreements dated May 23, 1997 and
July 28, 1997, respectively, between Chauvco and US Co which shall continue in
full force and effect; (b) is not intended to confer upon any other person any
rights or remedies hereunder (except as otherwise expressly provided herein and
except that Section 7.4 is for the benefit of Chauvco's directors and officers,
Sections 1.1(e) and (f) are for the benefit of holders of Chauvco Options,
Section 7.6 is for the benefit of the Chauvco Employees, Section 7.7 is for the
benefit of CRI and Section 7.8 is for the benefit of the Alliance Entity (and
said sections are intended to confer rights on such persons); and (c) shall not
be assigned by operation of law or otherwise except as otherwise specifically
provided.
8.6 GOVERNING LAW
This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the laws of the Province of Alberta and the
federal laws of Canada applicable therein.
8.7 AMENDMENT AND WAIVERS
Any term or provision of this Agreement may be amended, and the
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively) only by a
writing signed by the party to be bound thereby. The waiver by a party of any
breach hereof or default in the performance hereof will not be deemed to
constitute a waiver of any other default or any succeeding breach or default.
The Agreement may be amended by the parties hereto at any time before or after
approval of the Chauvco shareholders or US Co stockholders, but, after such
approval, no amendment will be made which by applicable law requires the
further approval of the Chauvco shareholders or US Co stockholders without
obtaining such further approval.
<PAGE> 46
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8.8 ASSIGNMENT; BINDING UPON SUCCESSORS AND ASSIGNS
Neither party hereto may assign any of its rights or obligations
hereunder without the prior written consent of the other party hereto. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
8.9 SEVERABILITY
If any provision of this Agreement, or the application thereof, will
for any reason and to any extent be invalid or unenforceable, the remainder of
this Agreement and application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the greatest extend possible, the economic, business and other
purpose of the void and unenforceable provision.
8.10 OTHER REMEDIES
The parties agree that irreparable damage would occur and that they
would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement (without the requirement of posting a bond) and to enforce
specifically the terms and provisions of this Agreement in any court located in
Alberta, this being in addition to any other remedy to which they are entitled
at law or in equity.
8.11 NO JOINT VENTURE
Nothing contained in this Agreement will be deemed or construed as
creating a joint venture or partnership between any of the parties. No party is
by virtue of this Agreement authorized as an agent, employee or legal
representative of any other party. No party will have the power to control the
activities and operations of any other and the status of each is, and at all
times, will continue to be, that of an independent contractor with respect to
the other. No party will have any power or authority to bind or commit any
other. No party will hold itself out as having any authority or relationship in
contravention of this section.
8.12 FURTHER ASSURANCES
Each party agrees to cooperate fully with the other party, to act
reasonably in respect of, and to execute, such further instruments, documents
and agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and select the transactions described
herein and contemplated hereby and to carry into effect the intents and
purposes of this Agreement.
<PAGE> 47
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8.13 EXPENSES
Except as otherwise set forth in this Agreement, each party will bear
its respective expenses and legal fees incurred with respect to this Agreement
and the transactions contemplated hereby.
IN WITNESS WHEREOF, US Co and Chauvco have caused this Agreement to be
signed by their respective officers thereunder duly authorized, all as of the
date first written above.
PIONEER NATURAL
RESOURCES COMPANY
Per: /s/ Scott D. Sheffield
-------------------------
Per: /s/ Mark L. Withrow
-------------------------
CHAUVCO RESOURCES LTD.
Per: /s/ Guy J. Turcotte
-------------------------
Per: /s/ W. G. Russell
-------------------------
<PAGE> 1
EXHIBIT 2.6
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT, dated as of
September 3, 1997 (this "Agreement"), is made and entered into by and among
PIONEER NATURAL RESOURCES COMPANY, a Delaware corporation ("US Co"), and GUY J.
TURCOTTE, an individual, (the "Shareholder").
W I T N E S S E T H
WHEREAS, concurrently herewith, US Co and Chauvco Resources Ltd.
("Chauvco") are entering into a Combination Agreement (as such agreement may
hereafter be amended from time to time, the "Combination Agreement"), providing
for the arrangement (the "Arrangement") as contemplated by the Combination
Agreement; capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Combination Agreement; and
WHEREAS, as an inducement and a condition to entering into the
Combination Agreement, US Co has required that the Shareholder agrees, and the
Shareholder has agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein and the
benefits to be received by the parties under the terms of the Combination
Agreement, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS
For purposes of this Agreement:
(a) "Acquisition Proposal" shall mean any agreement, letter of
intent, proposal or offer (other than the transactions
contemplated in the Combination Agreement) involving Chauvco
or any of the Chauvco Subsidiaries for, or an inquiry or
indication of interest that reasonably could be expected to
lead to: (i) any arrangement, merger, consolidation, share
exchange, recapitalization, reorganization, dissolution,
liquidation, business combination, or other similar
transaction with Chauvco or any of the Chauvco Subsidiaries,
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of a material portion of the assets of
Chauvco and the Chauvco Subsidiaries, taken as a whole, in a
single transaction or series of transactions, or (iii) any
tender offer or exchange offer for all or any portion of the
outstanding shares of capital stock of Chauvco or any of the
Chauvco Subsidiaries or the filing of documentation under
applicable Canadian securities legislation in connection
therewith, but shall not include the transactions
contemplated in the Combination Agreement.
(b) "Affiliate" of any Person means another Person that directly
or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first
Person.
<PAGE> 2
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(c) "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "beneficial ownership" of
such securities (as determined pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934 (the "Exchange Act"))
including pursuant to any agreement, arrangement or
understanding, whether or not in writing and Beneficial Owner
has a corresponding meaning. Without duplicative counting of
the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons (who are Affiliates
of such Person) who together with such Person would
constitute a "group" within the meaning of Section 13(d)(3)
of the Exchange Act and in any event with respect to the
Shareholder shall include Shares held of record by any of the
Shareholder's spouses and children.
(d) "Options" means options to purchase Shares.
(e) "Person" shall mean an individual, corporation, limited
liability company, partnership, joint venture, association,
trust or unincorporated organization.
(f) "Shares" shall mean Chauvco Common Shares.
(g) "Shareholder's Options" shall mean all Options issued to the
Shareholder, whether issued before or after the date hereof,
that are validly outstanding at the relevant time hereunder,
excluding any Options that are no longer outstanding as a
result of the exercise of such Options by the Shareholder at
any time.
(h) "Shareholder's Shares" shall mean all Shares held of record
or Beneficially Owned by such Shareholder, whether currently
issued or hereafter acquired except by way of option exercise
where such shares are sold within 10 days of exercise.
(i) "Termination Date" shall mean the date that the Combination
Agreement has been terminated.
2. PROVISIONS CONCERNING COMMON STOCK
From and after the date of this Agreement and ending as of the first
to occur of the Effective Time or the Termination Date, at any meeting of the
holders of Shares, Options, or both, however called, or in any other
circumstance upon which the vote, consent or other approval of holders of
Shares, Options, or both, is sought, the Shareholder shall vote (or cause to be
voted) the Shareholder's issued and outstanding Shareholder's Shares and
Shareholder's Options, (i) in favour of the Arrangement and the other
transactions contemplated thereby, the execution and delivery by Chauvco of the
Combination Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Combination Agreement and this Agreement and
any actions required in furtherance thereof and hereof; (ii) against any action
or agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other material obligation or
agreement of Chauvco under the Combination Agreement; and (iii) against the
following actions (other than the Arrangement and the transactions contemplated
by the Combination Agreement): (A) any Acquisition Proposal other than an
Acquisition Proposal with US Co or any Affiliate thereof and (B) to the extent
that such (1) are intended to, or could reasonably be expected to, impede,
interfere
<PAGE> 3
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with, delay, postpone, or materially adversely affect the Arrangement or the
transactions contemplated by the Combination Agreement or this Agreement or (2)
are intended to, or could reasonably be expected to, implement or lead to any
Acquisition Proposal (other than an Acquisition Proposal with US Co or any
Affiliate thereof): (x) any change in a majority of the persons who constitute
the board of directors of Chauvco; (y) any change in the present capitalization
of Chauvco or any amendment of Chauvco's Articles or Bylaws; or (z) any other a
material change in Chauvco's corporate structure or business. In addition to
the other covenants and agreements of the Shareholder provided for elsewhere in
this Agreement, during the above-described period the Shareholder shall not
enter into any agreement or understanding with any Person the effect of which
would be inconsistent with or violate the provisions and agreements contained
in this Section 2. Nothing herein shall in any way restrict or limit the
Shareholder from taking any action in his capacity as a director or officer of
Chauvco to fulfill his duties and fiduciary obligations as a director or
officer of Chauvco.
3. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
(a) The Shareholder hereby severally represents, warrants and
covenants to US Co as follows:
(i) Ownership. The Shareholder is either (A) the record
and Beneficial Owner of, or (B) the Beneficial Owner
but not the record holder of, the number of issued
and outstanding Shares and Options set forth on
Schedule A hereto. As of the date of this Agreement,
the Shares and Options set forth on Schedule A hereto
constitute all of the issued and outstanding Shares
and Options owned of record or Beneficially Owned by
the Shareholder. Except as otherwise set forth in
Schedule A, the Shareholder has sole power of
disposition, sole power of conversion, sole power to
demand appraisal rights and sole power to agree to
all of the matters set forth in this Agreement, in
each case with respect to all of the Shares and
Options attributable to the Shareholder set forth on
Schedule A hereto, with no material limitations,
qualifications or restrictions on such rights,
subject to applicable securities laws and the terms
of this Agreement.
(ii) Power; Binding Agreement. The Shareholder has the
legal capacity, power and authority to enter into and
perform all of the Shareholder's obligations under
this Agreement. This Agreement has been duly and
validly executed and delivered by the Shareholder and
constitutes a valid and binding agreement of the
Shareholder, enforceable against the Shareholder in
accordance with its terms. There are no beneficiaries
or holders of a voting trust certificate or other
interest of any trust of which the Shareholder is a
trustee whose consent is required for the execution
and delivery of this Agreement or the consummation by
the Shareholder of the transactions contemplated
hereby. If the Shareholder's Shares or Shareholder's
Options constitute community property, this Agreement
has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, the
Shareholder's spouse, enforceable against such person
in accordance with its terms.
<PAGE> 4
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(iii) No Conflicts. Other than filings that may be required
under the Exchange Act and such other consents as are
described in the Combination Agreement no filing
with, and no permit, authorization, consent or
approval of, any state or federal public body or
authority is necessary for the execution of this
Agreement by the Shareholder and the consummation by
the Shareholder of the transactions contemplated
hereby, except where the failure to obtain the
consent, permit, authorization, approval or filing
would not interfere with the Shareholder's ability to
perform his obligations hereunder, and none of the
execution and delivery of this Agreement by the
Shareholder, the consummation by the Shareholder of
the transactions contemplated hereby or compliance by
the Shareholder with any of the provisions hereof
shall (A) result in a violation or breach of, or
constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party
right of termination, cancellation, material
modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment,
arrangement, understanding, agreement or other
instrument or obligation of any kind to which the
Shareholder is a party or by which the Shareholder or
any of his properties or assets may be bound, or (B)
violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation
applicable to the Shareholder or any of its
properties or assets, in each such case except to the
extent that any conflict, breach, default or
violation would not interfere with the ability of the
Shareholder to perform the obligations hereunder.
(iv) No Encumbrances. Except as required by Section 2, at
all times during the term hereof, all of the
Shareholder's Shares and Shareholder's Options will
be held by the Shareholder, Affiliates of the
Shareholder, or by nominees or custodians for the
benefit of the Shareholder, free and clear of all
liens, claims, security interests, proxies, voting
trusts or agreement, understandings or arrangements
or any other liens, claims, understanding or
arrangements that do not limit or impair the
Shareholder's ability to perform his obligations
under this Agreement.
(v) No Solicitation. The Shareholder shall comply with
the terms of Section 4.2(n) of the Combination
Agreement.
(vi) Restriction on Transfer, Proxies and
Non-Interference. From and after the date of this
Agreement and ending as of the first to occur of the
Effective Time or the Termination Date, the
Shareholder shall not, and the Shareholder shall
cause each of his Affiliates who Beneficially Own
any of the Shareholder's Shares or Shareholder's
Options of such Shareholder not to, directly or
indirectly without the consent of US Co in respect
of any Acquisition Proposal or otherwise: (A) offer
for sale, sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of, or enter into any
contract, option or other arrangement or
understanding with respect to or consent to the
offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any
or all of the Shareholder's Shares or Shareholder's
Options
<PAGE> 5
- 5 -
of the Shareholder, or any interest therein, (B)
grant any proxies or powers of attorney, deposit any
Shareholder's Shares or Shareholder's Options of the
Shareholder into a voting trust or enter into a
voting agreement with respect to any Shareholder's
Shares or Shareholder's Options of the Shareholder,
(C) enter into any agreement or arrangement
providing for any of the actions described in clause
(A) or (B) above or (D) take any action that could
reasonably be expected to have effect of preventing
or disabling the Shareholder from performing the
Shareholder's obligations under this Agreement,
provided however that the Shareholder shall be
entitled to dispose of the Shares currently held in
the Shareholder's RRSP which holds approximately
36,000 Shares.
(vii) Waiver of Appraisal Rights. The Shareholder hereby
waives and agrees not to assert, and shall cause any
of his Affiliates who hold of record any of the
Shareholder's Shares or Shareholder's Options to
waive and agree not to assert, any rights of
appraisal or rights to dissent in respect of the
Arrangement that the Shareholder or such Affiliate
may have.
(viii) Further Assurances. From time to time, at US Co's
reasonable request and without further
consideration, the Shareholder shall execute and
deliver such additional documents as may be
necessary or desirable to consummate and make
effective, in the most expeditious manner
practicable, the transactions contemplated by this
Agreement.
4. STOP TRANSFER
From and after the date of this Agreement and ending as of the first
to occur of the Effective Time or the Termination Date, the Shareholder will
not request that Chauvco register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of the Shareholder's
Shares, except as contemplated by Section 3(a)(vi) hereof or as otherwise
contemplated hereby.
5. RECAPITALIZATION
In the event of a stock dividend or distribution, or any change in the
Shares (or any class thereof) by reason of any split-up, recapitalization,
combination, exchange of shares or the like, the term "Shares" shall include,
without limitation, all such stock dividends and distributions and any shares
or other securities into which or for which any or all of the Shares (or any
class thereof) may be changed or exchanged as may be appropriate to reflect
such event.
6. MISCELLANEOUS
(a) Entire Agreement. This Agreement and the Combination
Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter
hereof.
<PAGE> 6
- 6 -
(b) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or
terminated, except upon the execution and delivery of a
written agreement executed by the parties hereto.
(c) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly received if so
given) by hand delivery or telecopy, or by mail (registered
or certified mail, postage prepaid, return receipt requested)
or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be
delivered to the respective parties at the following
addresses or the addresses set forth on the signature pages
hereto:
If to the Shareholder: Chauvco Resources Ltd.
2900, 255 5th Ave S.W.
Calgary, AB, T2P 3G6
Attn: Guy J. Turcotte - PRIVATE AND CONFIDENTIAL
Telecopy: (403) 231-3248
and
copy to: Bennett Jones Verchere
4500 Bankers Hall East
355 - 2nd Street S.W.
Calgary, AB, T2P 4K7
Attn: Martin Lambert
Telecopy: (403) 265-7219
If to US Co: Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039
Attn: General Counsel
Telecopy: (972) 402-7028
and
copy to: Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2975
Attn: Michael D. Wortley
Telecopy: (214) 220-7716
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
<PAGE> 7
- 7 -
(d) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law but
if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion
of any provision had never been contained herein.
(e) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by the Shareholder of any
covenants or agreements contained in this Agreement will
cause US Co to sustain damages for which it would not have an
adequate remedy at law for money damages, and therefore each
of the parties hereto agrees that in the event of any such
breach US Co shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive
and other equitable relief in addition to any other remedy to
which it may be entitled, at law or in equity.
(f) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative,
and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
(g) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or
to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise
any such or other right, power or remedy or to demand such
compliance.
(h) No Third Party Beneficiaries. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by,
any person or entity who or which is not a party hereto;
provided that, in the event of the Shareholder's death, the
benefits and obligations of such Shareholder hereunder shall
inure to his successors and heirs.
(i) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of Alberta.
(j) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of Alberta in any action, suit or
proceeding arising in connection with this Agreement, and
agrees that any such action, suit or proceeding shall be
brought only in such court (and waives any objection based on
forum non conveniens or any other objection to venue
therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this
paragraph and shall not be deemed to be a general submission
to the jurisdiction of Alberta other than for such purposes.
<PAGE> 8
- 8 -
(k) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or
interpretation of this Agreement.
(l) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same
Agreement. This Agreement shall not be effective as to any
party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each
party hereto.
7. TERMINATION
This Agreement shall terminate without any further action on the part
of any party hereto upon the earlier to occur of the Effective Time or the
Termination Date. Upon such termination, this Agreement shall forthwith become
void and of no further force or effect; provided that a party shall be liable
for any breaches of the Agreement that occurred prior to such termination.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed effective the 3rd day of September, 1997.
PIONEER NATURAL
RESOURCES COMPANY
Per: /s/ Scott D. Sheffield
------------------------
Per: /s/ Mark L. Withrow
------------------------
/s/ Brad Markel
- ----------------------- /s/ Guy J. Turcotte
WITNESS ------------------------
GUY J. TURCOTTE
<PAGE> 9
SCHEDULE A TO SHAREHOLDERS AGREEMENT
SHARES AND OPTIONS HELD BY THE SHAREHOLDER
o The Shareholder holds 1,212,972 common shares of Chauvco Resources Ltd.
o The Shareholder holds 625,000 options to acquire common shares of
Chauvco Resources Ltd.
<PAGE> 1
EXHIBIT 3.3
CERTIFICATE OF DESIGNATIONS
OF
SPECIAL PREFERRED VOTING STOCK
OF
PIONEER NATURAL RESOURCES COMPANY
Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), and pursuant to Article
Fifth of its Amended and Restated Certificate of Incorporation, the
undersigned, Pioneer Natural Resources Company, a company organized and
existing under the DGCL (the "Company"), in accordance with the provisions of
Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Amended and Restated Certificate of
Incorporation of the Corporation, the Board of Directors on September 3, 1997,
adopted the following resolution creating a series of Preferred Stock, par
value $.01, designated as "Special Preferred Voting Stock":
RESOLVED, that pursuant to the authority expressly granted to
and vested in the Board by the Amended and Restated Certificate of
Incorporation, the Board hereby authorizes the creation of a series of
preferred stock, par value $.01 per share, of the Company, such series
to be designated Special Preferred Voting Stock (the "Special
Preferred Voting Stock"), upon the terms and conditions set forth in
Exhibit D to the Combination Agreement, in substantially the form
presented to and reviewed by each member of the Board, and hereby
fixes the designation and number of shares thereof and the other
powers, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions
thereof (in addition to those set forth in the Amended and Restated
Certificate of Incorporation that may be applicable to the Special
Preferred Voting Stock) as follows:
Section 1. Special Preferred Voting Stock Designated. A series of
Preferred Stock, consisting of one share of such stock, is hereby designated as
"Special Preferred Voting Stock." The outstanding share of Special Preferred
Voting Stock shall be entitled at any relevant date to the number of votes
(including for purposes of determining the presence of a quorum) determined in
accordance with the terms and conditions of the "Exchangeable Shares" and the
"Plan of Arrangement" (as such terms are defined in that certain "Combination
Agreement" dated as of September 3, 1997, by and between the Company and
Chauvco Resources Ltd. ("Chauvco")) on all matters presented to the holders of
Common Stock of the Company, with the Special Preferred Voting Stock and Common
Stock voting together as a single class. The Special Preferred Voting Stock
shall have no other voting rights except as required by law. No dividend shall
be paid to the holder of Special Preferred Voting Stock. The share of Special
Preferred Voting Stock shall be entitled to $1.00 on liquidation of the Company
in preference to any shares of Common Stock of the Company, but only after the
liquidation preference of any other shares of Preferred Stock of the Company
has been paid in full. The Special Preferred Voting Stock is not convertible
into any other class or series of the capital stock of the Company or into
cash, property or other rights, and may not be redeemed, except pursuant to the
last sentence of this Section 1. The share of Special Preferred
<PAGE> 2
Voting Stock purchased or otherwise acquired by the Company shall be deemed
retired and shall be canceled and may not thereafter be reissued or otherwise
disposed of by the Company. So long as any Exchangeable Shares shall be
outstanding, the number of shares comprising the Special Preferred Voting Stock
shall not be increased or decreased and no other term of the Special Preferred
Voting Stock shall be amended, except upon the approval of the holder of the
outstanding share of Special Preferred Voting Stock. At such time as no
Exchangeable Shares shall be outstanding, the Special Preferred Voting Stock
shall automatically be redeemed, with the $1.00 liquidation preference due and
payable upon such redemption.
Section 2. Restriction. So long as the share of Special Preferred
Voting Stock is outstanding, the Company shall (i) fully comply with all terms
of the Exchangeable Shares and with all contractual obligations of the Company
associated with such Exchangeable Shares and (ii) not amend, alter, change or
repeal this Section 2 except upon the unanimous approval of the holder of the
outstanding share of Special Preferred Voting Stock.
IN WITNESS WHEREOF, the undersigned has executed this Certificate and
does affirm the foregoing as true this day of December, 1997.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Mark L. Withrow
---------------------------------------------
Mark L. Withrow
Executive Vice President, General Counsel
and Secretary
-2-
<PAGE> 1
EXHIBIT 4.2
================================================================================
PIONEER NATURAL RESOURCES COMPANY
AND
[ ],
AS TRUSTEE
----------
INDENTURE
DATED AS OF [ ]
-----------
DEBT SECURITIES
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
RECITALS OF THE COMPANY..................................................................................1
ARTICLE I
DEFINITIONS
Section 1.01. Certain Terms Defined..................................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act.....................................14
Section 1.03. Rules of Construction.................................................................14
ARTICLE II
DEBT SECURITIES
Section 2.01. Forms Generally.......................................................................15
Section 2.02. Form of Trustee's Certificate of Authentication.......................................16
Section 2.03. Principal Amount; Issuable in Series..................................................16
Section 2.04. Execution of Debt Securities..........................................................19
Section 2.05. Authentication and Delivery of Debt Securities........................................20
Section 2.06. Denomination of Debt Securities.......................................................21
Section 2.07. Registration of Transfer and Exchange.................................................21
Section 2.08. Temporary Debt Securities.............................................................23
Section 2.09. Mutilated, Destroyed, Lost or Stolen Debt Securities..................................24
Section 2.10. Cancelation of Surrendered Debt Securities............................................25
Section 2.11. Provisions of the Indenture and Debt Securities for the Sole
Benefit of the Parties and the Holders................................................26
Section 2.12. Payment of Interest; Interest Rights Preserved........................................26
Section 2.13. Securities Denominated in Foreign Currencies..........................................27
Section 2.14. Wire Transfers........................................................................28
Section 2.15. Securities Issuable in the Form of a Global Security..................................28
Section 2.16. Medium Term Securities................................................................30
Section 2.17. Defaulted Interest....................................................................31
Section 2.18. Judgments.............................................................................32
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01. Applicability of Article..............................................................33
Section 3.02. Tax Redemption; Special Tax Redemption................................................33
Section 3.03. Notice of Redemption; Selection of Debt Securities....................................35
Section 3.04. Payment of Debt Securities Called for Redemption......................................36
Section 3.05. Mandatory and Optional Sinking Funds..................................................37
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 3.06. Redemption of Debt Securities for Sinking Fund........................................38
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. Payment of Principal of, and Premium, If Any, and Interest on,
Debt Securities.......................................................................40
Section 4.02. Maintenance of Offices or Agencies for Registration of Transfer,
Exchange and Payment of Debt Securities...............................................40
Section 4.03. Appointment to Fill a Vacancy in the Office of Trustee................................41
Section 4.04. Duties of Paying Agents, etc..........................................................41
Section 4.05. Statement by Officers as to Default...................................................42
Section 4.06. Payment of Additional Interest........................................................42
Section 4.07. Further Instruments and Acts..........................................................44
Section 4.08. Existence.............................................................................44
Section 4.09. Maintenance of Properties.............................................................44
Section 4.10. Payment of Taxes and Other Claims.....................................................44
Section 4.11. Limitation on Liens...................................................................45
Section 4.12. Limitation on Sale/Leaseback Transactions.............................................45
ARTICLE V
HOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 5.01. Company to Furnish Trustee Information as to Names and Addresses
of Holders; Preservation of Information...............................................45
Section 5.02. Communications to Holders.............................................................46
Section 5.03. Reports by Company....................................................................46
Section 5.04. Reports by Trustee....................................................................47
Section 5.05. Record Dates for Action by Holders....................................................47
ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01. Events of Default.....................................................................48
Section 6.02. Collection of Indebtedness by Trustee, etc............................................50
Section 6.03. Application of Moneys Collected by Trustee............................................52
Section 6.04. Limitation on Suits by Holders........................................................53
Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights Not
a Waiver of Default...................................................................53
Section 6.06. Rights of Holders of Majority in Principal Amount of Debt Securities
to Direct Trustee and to Waive Default................................................53
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 6.07. Trustee to Give Notice of Defaults Known to It, but May Withhold
Such Notice in Certain Circumstances..................................................54
Section 6.08. Requirement of an Undertaking To Pay Costs in Certain Suits under
the Indenture or Against the Trustee..................................................54
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities...................................................55
Section 7.02. Certain Rights of Trustee.............................................................56
Section 7.03. Trustee Not Liable for Recitals in Indenture or in Debt Securities....................57
Section 7.04. Trustee, Paying Agent or Registrar May Own Debt Securities............................57
Section 7.05. Moneys Received by Trustee to Be Held in Trust........................................58
Section 7.06. Compensation and Reimbursement........................................................58
Section 7.07. Right of Trustee to Rely on an Officers' Certificate Where No Other
Evidence Specifically Prescribed......................................................58
Section 7.08. Separate Trustee; Replacement of Trustee..............................................59
Section 7.09. Successor Trustee by Merger...........................................................60
Section 7.10. Eligibility; Disqualification.........................................................60
Section 7.11. Preferential Collection of Claims Against Company.....................................60
Section 7.12. Compliance with Tax Laws..............................................................60
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01. Evidence of Action by Holders.........................................................61
Section 8.02. Proof of Execution of Instruments and of Holding of Debt Securities...................61
Section 8.03. Who May Be Deemed Owner of Debt Securities............................................61
Section 8.04. Instruments Executed by Holders Bind Future Holders...................................62
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Purposes for Which Supplemental Indenture May Be Entered into
Without Consent of Holders............................................................63
Section 9.02. Modification of Indenture with Consent of Holders of Debt Securities..................65
Section 9.03. Effect of Supplemental Indentures.....................................................66
Section 9.04. Debt Securities May Bear Notation of Changes by Supplemental
Indentures............................................................................67
Section 9.05. Payment for Consent...................................................................67
</TABLE>
iii
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<TABLE>
ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
<S> <C>
Section 10.01. Consolidations and Mergers of the Company.............................................67
Section 10.02. Rights and Duties of Successor Corporation............................................67
ARTICLE XI
SATISFACTION AND DISCHARGE OF
INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01. Applicability of Article..............................................................68
Section 11.02. Satisfaction and Discharge of Indenture; Defeasance...................................68
Section 11.03. Conditions of Defeasance..............................................................69
Section 11.04. Application of Trust Money............................................................71
Section 11.05. Repayment to Company..................................................................71
Section 11.06. Indemnity for U.S. Government Obligations.............................................71
Section 11.07. Reinstatement.........................................................................71
ARTICLE XII
SUBORDINATION OF DEBT SECURITIES
Section 12.01. Applicability of Article; Agreement To Subordinate....................................71
Section 12.02. Liquidation, Dissolution, Bankruptcy..................................................72
Section 12.03. Default on Senior Indebtedness........................................................72
Section 12.04. Acceleration of Payment of Debt Securities............................................73
Section 12.05. When Distribution Must Be Paid Over...................................................73
Section 12.06. Subrogation...........................................................................73
Section 12.07. Relative Rights.......................................................................73
Section 12.08. Subordination May Not Be Impaired by Company..........................................74
Section 12.09. Rights of Trustee and Paying Agent....................................................74
Section 12.10. Distribution or Notice to Representative..............................................74
Section 12.11. Article XII Not to Prevent Defaults or Limit Right to Accelerate......................74
Section 12.12. Trust Moneys Not Subordinated.........................................................74
Section 12.13. Trustee Entitled to Rely..............................................................74
Section 12.14. Trustee to Effectuate Subordination...................................................75
Section 12.15. Trustee Not Fiduciary for Holders of Senior Indebtedness..............................75
Section 12.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions............................................................................75
</TABLE>
iv
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<TABLE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
<S> <C>
Section 13.01. Successors and Assigns of Company Bound by Indenture..................................75
Section 13.02. Acts of Board, Committee or Officer of Successor Company Valid........................76
Section 13.03. Required Notices or Demands...........................................................76
Section 13.04. Indenture and Debt Securities to Be Construed in Accordance with the
Laws of the State of New York.........................................................77
Section 13.05. Officers' Certificate and Opinion of Counsel to Be Furnished
upon Application or Demand by the Company.............................................77
Section 13.06. Payments Due on Legal Holidays........................................................77
Section 13.07. Provisions Required by Trust Indenture Act to Control.................................77
Section 13.08. Computation of Interest on Debt Securities............................................77
Section 13.09. Rules by Trustee, Paying Agent and Registrar..........................................78
Section 13.10. No Recourse Against Others............................................................78
Section 13.11. Severability..........................................................................78
Section 13.12. Effect of Headings....................................................................78
Section 13.13. Indenture May Be Executed in Counterparts.............................................78
</TABLE>
v
<PAGE> 7
INDENTURE dated as of _____________________, between PIONEER NATURAL
RESOURCES COMPANY, a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter sometimes called the "Company"), and
____________________, an association duly incorporated and existing under the
Federal laws of the United States (hereinafter sometimes called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the "Debt Securities"),
as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which the Debt
Securities are authenticated, issued and delivered, and in consideration of the
premises, and of the purchase and acceptance of the Debt Securities by the
holders thereof, the Company and the Trustee covenant and agree with each
other, for the benefit of the respective Holders from time to time of the Debt
Securities or any series thereof, as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN TERMS DEFINED. The terms defined in this Section
1.01 (except as herein otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any Indenture
supplemental hereto shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are defined in the
Trust Indenture Act or which are by reference therein defined in the Securities
Act (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in the
Trust Indenture Act and in the Securities Act as in force as of the date of
original execution of this Indenture.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership
1
<PAGE> 8
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified pursuant to Section 2.03
with respect to the Debt Securities of any series. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any business day in
such city.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as of the time of determination, (a) if the obligation in respect of
such Sale/Leaseback Transaction is a Capitalized Lease Obligation, the amount
of such obligation determined in accordance with GAAP and included in the
financial statements of the lessee or (b) if the obligation in respect of such
Sale/Leaseback Transaction is not a Capitalized Lease Obligation, the total Net
Amount of Rent required to be paid by the lessee under such lease during the
remaining term thereof (including any period for which the lease has been
extended), discounted from the respective due dates thereof to such
determination date at the rate per annum borne by the Debt Securities
compounded semi-annually.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement, as supplemented amended or modified from time
to time, 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 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.
"Banks" means the Lenders, as such term is defined in the Credit
Agreement.
"Bearer Holder" means, with respect to any Bearer Security or Coupon,
the bearer thereof.
"Bearer Security" means any Debt Security (with or without Coupons),
title to which passes by delivery only, but does not include any Coupons.
"Board of Directors" means either the Board of Directors of the
Company or any duly authorized committee or subcommittee of such Board, except
as the context may otherwise require.
"business day" means, when used with respect to any Place of Payment
specified pursuant to Section 2.03, any day that is not a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies in
such Place of Payment are authorized or obligated by law to close, except as
otherwise specified pursuant to Section 2.03.
"Capitalized Lease Obligation" means an obligation that is required to
be classified and accounted for as a capitalized 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
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<PAGE> 9
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, participations or other equivalents of
or interests (including partnership interests) in (however designated) equity
of such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Commodity Price Protection Agreement" means, in respect of any
Person, any forward contract, commodity swap agreement, commodity option
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in commodity prices.
"Common Stock" means the common stock, par value $.01 per share, of
the Company, which stock is currently listed on the New York Stock Exchange.
"Company" means Pioneer Natural Resources Company, a Delaware
corporation, and, subject to the provisions of Article X, shall also include
its successors and assigns.
"Company Order" means a written order of the Company, signed by its
Chairman of the Board, Vice Chairman, President or any Vice President and by
its Treasurer, Secretary, any Assistant Treasurer or any Assistant Secretary.
"Consolidated Net Tangible Assets" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of the Company and its Subsidiaries for the total assets (less
accumulated depletion, depreciation or amortization, allowances for doubtful
receivables, other applicable reserves and other properly deductible items) of
the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, after giving effect to purchase accounting and after
deducting therefrom, to the extent included in total assets, in each case as
determined on a consolidated basis in accordance with GAAP (without
duplication): (a) the aggregate amount of liabilities of the Company and its
Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated); (b) current Indebtedness and current maturities of
long-term Indebtedness; (c) minority interests in the Company's Subsidiaries
held by Persons other than the Company or a wholly owned Subsidiary of the
Company; and (d) unamortized debt discount and expenses and other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, licenses, organization or developmental expenses and other
intangible items.
"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 (a) the
par or stated value of all outstanding Capital Stock of the Company plus (b)
paid-in capital or capital surplus relating to such Capital Stock plus (c) any
retained earnings or earned surplus less (i) any accumulated deficit and (ii)
any amounts attributable to Disqualified Stock.
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"corporate trust office of the trustee" or other similar term means
the office of the Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered in the United States
of America, except that with respect to the presentation of Debt Securities for
payment or for registration of transfer and exchange, such term shall also mean
the office of the Trustee or the Trustee's agent in the Borough of Manhattan,
the city and state of New York, at which at any particular time its corporate
agency business shall be conducted.
"Coupon" means any interest coupon appertaining to any Bearer Security.
"Coupon Security" means any Bearer Security authenticated and
delivered with one or more Coupons appertaining thereto.
"Credit Agreement" means the Credit Facility Agreement dated as of
[DATE OF CREDIT FACILITY AGREEMENT], among the Company and certain of its
subsidiaries, each as a Borrower, and [ADMINISTRATIVE AGENT] as Administrative
Agent, [DOCUMENTATION AGENT], as Documentation Agent, and the Co-Agents and the
Lenders party thereto, as supplemented, amended or modified from time to time.
"Currency" means Dollars or Foreign Currency.
"Currency Exchange Protection Agreement" means, in respect of any
Person, any foreign exchange contract, currency swap agreement, currency option
or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
"Debt Security" or "Debt Securities" has the meaning stated in the
first recital of this Indenture and more particularly means any debt security
or debt securities, as the case may be of any series authenticated and
delivered under this Indenture.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means, unless otherwise specified by the Company pursuant
to either Section 2.03 or 2.15, with respect to registered Debt Securities of
any series issuable or issued in whole or in part in the form of one or more
Global Securities, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Exchange Act or
other applicable statute or regulations.
"Designated Senior Indebtedness" means (a) the Bank Indebtedness and
(b) any other Senior Indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $100
million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Indenture and has been designated as
"Designated Senior Indebtedness" for purposes of this Indenture in an Officers'
Certificate received by the Trustee.
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<PAGE> 11
"Disqualified Stock" of a Person means Redeemable Stock of such Person
as to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the holder thereof occurs, or may occur, on or
prior to the first anniversary of the Stated Maturity of the Debt Securities.
"Dollar" or "$" means such currency of the United States as at the
time of payment is legal tender for the payment of public and private debts.
"Dollar Equivalent" means, with respect to any monetary amount in a
Foreign Currency, at any time for the determination thereof, the amount of
Dollars obtained by converting such Foreign Currency involved in such
computation into Dollars at the spot rate for the purchase of Dollars with the
applicable Foreign Currency as quoted by Bankers Trust Company (unless another
comparable financial institution is designated by the Company) in New York, New
York at approximately 11:00 a.m. (New York time) on the date two business days
prior to such determination.
"European Currency Units" has the meaning assigned to it from time to
time by the Council of the European Communities, or its successor in the
European Union.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community, or
their successors in the European Union.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Floating Rate Security" means a Debt Security that provides for the
payment of interest at a variable rate determined periodically by reference to
an interest rate index specified pursuant to Section 2.03.
"Foreign Currency" means a currency issued by the government of any
country other than the United States or a composite currency the value of which
is determined by reference to the values of the currencies of any group of
countries.
"GAAP" means generally accepted accounting principles in the United
States as in effect as of the date on which the Debt Securities of the
applicable series are issued, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession. All ratios and
computations based on GAAP contained in this Indenture shall be computed in
conformity with GAAP consistently applied.
"Global Security" means with respect to any series of Debt Securities
issued hereunder, a Debt Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and
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<PAGE> 12
any Indentures supplemental hereto, or resolution of the Board of Directors and
set forth in an Officers' Certificate, which shall be registered in the name of
the Depositary or its nominee and which shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, all the
Outstanding Debt Securities of such series or any portion thereof, in either
case having the same terms, including, without limitation, the same original
issue date, date or dates on which principal is due and interest rate or method
of determining interest.
"Government Contract Lien" means any Lien required by any contract,
statute, regulation or order in order to permit the Company or any of its
Subsidiaries to perform any contract or subcontract made by it with or at the
request of the United States or any State thereof or any department, agency or
instrumentality of either or to secure partial, progress, advance or other
payments by the Company or any of its Subsidiaries to the United States or any
State thereof or any department, agency or instrumentality of either pursuant
to the provisions of any contract, statute, regulation or order.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation of such
other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation 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.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Protection Agreement, Currency Exchange
Protection Agreement, Commodity Price Protection Agreement or other similar
agreement.
"Holder," "Holder of Debt Securities" or other similar terms means,
with respect to a Registered Security, the Registered Holder and, with respect
to a Bearer Security or a Coupon, the Bearer Holder.
"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 terms "Incurred",
"Incurrence" and "Incurring" shall each have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
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<PAGE> 13
(a) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
(b) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(c) all Capitalized Lease Obligations of such Person;
(d) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade Payables);
(e) all obligations of such Person in respect of letters of
credit, banker's acceptances or other similar instruments or credit
transactions (including reimbursement obligations with respect thereto), other
than obligations with respect to letters of credit securing obligations (other
than obligations described in (a) through (d) 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 third business day following receipt by such
Person of a demand for reimbursement following payment on the letter of credit;
(f) 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 the Company, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(g) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of such Indebtedness shall be the
lesser of (i) the fair market value of such asset at such date of determination
and (ii) the amount of such Indebtedness of such other Persons;
(h) all Indebtedness of other Persons to the extent Guaranteed
by such Person; and
(i) to the extent not otherwise included in this definition,
obligations in respect of Hedging Obligations.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Stock or Preferred Stock that does not
have a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Stock as if such Stock were redeemed, repaid
or repurchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture; provided, however, that if such Stock is
not then permitted to be redeemed, repaid or repurchased, the redemption,
repayment or repurchase price shall be the book value of such Stock as
reflected in the most recent financial statements of such Person. 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.
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"Indenture" means this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented and
shall include the form and terms of particular series of Debt Securities as
contemplated hereunder, whether or not a supplemental Indenture is entered into
with respect thereto.
"Interest" includes, when used with respect to a Bearer Security, any
additional interest payable on such Bearer Security pursuant to Section 3.02 or
4.06.
"Interest Rate Protection Agreement" means, in respect of any Person,
any interest rate swap agreement, interest rate option agreement, interest rate
cap agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Net Amount of Rent" as to any lease for any period means the
aggregate amount of rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges. In the
case of any lease that is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as payable under such lease subsequent to the first
date upon which it may be so terminated.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman, the President or any Vice President and by the
Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary of
the Company. Each such certificate shall include the statements provided for in
Section 13.05, if applicable.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel for the Company (which counsel may be an employee of the Company), or
outside counsel for the Company. Each such opinion shall include the statements
provided for in Section 13.05, if applicable.
"Original Issue Discount Debt Security" means any Debt Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 6.01.
"Outstanding", when used with respect to any series of Debt
Securities, means, as of the date of determination, all Debt Securities of that
series theretofore authenticated and delivered under this Indenture, except:
(a) Debt Securities of that series theretofore canceled by the
Trustee or delivered to the Trustee for cancelation;
(b) Debt Securities of that series for whose payment or
redemption money in the necessary amount has been theretofore deposited with
the Trustee or any paying agent (other than
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<PAGE> 15
the Company) in trust or set aside and segregated in trust by the Company (if
the Company shall act as its own paying agent) for the Holders of such Debt
Securities; provided, that, if such Debt Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(c) Debt Securities of that series which have been paid
pursuant to Section 2.09 or in exchange for or in lieu of which other Debt
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Debt Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Debt Securities are
held by a bona fide purchaser in whose hands such Debt Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Debt Securities of any series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Debt Securities owned by the Company or any other obligor upon the
Debt Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Debt
Securities which the Trustee knows to be so owned shall be so disregarded. Debt
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debt Securities and that the
pledgee is not the Company or any other obligor upon the Debt Securities or an
Affiliate of the Company or of such other obligor. In determining whether the
Holders of the requisite principal amount of Outstanding Debt Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Debt Security
that shall be deemed to be Outstanding for such purposes shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 6.01. In determining whether the Holders of the requisite
principal amount of the Outstanding Debt Securities of any series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of a Debt Security denominated in one or more
foreign currencies or currency units that shall be deemed to be Outstanding for
such purposes shall be the Dollar Equivalent, determined in the manner provided
as contemplated by Section 2.03 on the date of original issuance of such Debt
Security, of the principal amount (or, in the case of any Original Issue
Discount Security, the Dollar Equivalent on the date of original issuance of
such Security of the amount determined as provided in the preceding sentence
above) of such Debt Security.
"pari passu", as applied to the ranking of any Indebtedness of a
Person in relation to other Indebtedness of such Person, means that each such
Indebtedness either (a) is not subordinate in right of payment to any
Indebtedness or (b) is subordinate in right of payment to the same Indebtedness
as is the other, and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any Indebtedness as to
which the other is not so subordinate.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under worker's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness)
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<PAGE> 16
or leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits of cash or United States
government bonds to secure performance, surety or appeal bonds to which such
Person is a party or which are otherwise required of such Person, or deposits
as security for contested taxes or import duties or for the payment of rent or
other obligations of like nature, in each case Incurred in the ordinary course
of business; (b) Liens imposed by law, such as carriers', warehousemen's,
laborers', materialmen's, landlords', vendors', workmen's, operators',
producers' (including those arising pursuant to Article 9.319 of the Texas
Uniform Commercial Code or other similar statutory provisions of other states
with respect to production purchased from others) and mechanics' Liens, in each
case for sums not yet due or being contested in good faith by appropriate
proceedings; (c) Liens for property taxes, assessments and other governmental
charges or levies not yet delinquent or subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings; (d) minor
survey exceptions, minor encumbrances, easements or reservations of or with
respect to, or rights of others for or with respect to, licenses,
rights-of-way, sewers, electric and other utility lines and usages, telegraph
and telephone lines, pipelines, surface use, operation of equipment, permits,
servitudes and other similar matters, or zoning or other restrictions as to the
use of real property or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not Incurred in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of such Person; (e) Liens existing on or provided
for under the terms of agreements existing on the Issue Date (including,
without limitation, under the Credit Agreement); (f) Liens on property at the
time the Company or any of its Subsidiaries acquired the property or the entity
owning such property, including any acquisition by means of a merger or
consolidation with or into the Company; provided, however, that any such Lien
may not extend to any other property owned by the Company or any of its
Subsidiaries; (g) Liens securing a Hedging Obligation so long as such Hedging
Obligation is of the type customarily entered into in connection with, and is
entered into for the purpose of, limiting risk; (h) Liens securing Indebtedness
Incurred in the ordinary course of business to provide all or part of the funds
for the exploration, drilling or development of any properties of the Company
or any of its Subsidiaries; (i) Purchase Money Liens; (j) Liens securing only
Indebtedness of a wholly owned Subsidiary of the Company to the Company or one
or more wholly owned Subsidiaries of the Company; (k) Liens on any property to
secure Indebtedness Incurred in connection with the construction, installation
or financing of pollution control or abatement facilities or other forms of
industrial revenue bond financing or Indebtedness issued or Guaranteed by the
United States, any state or any department, agency or instrumentality thereof;
(l) Government Contract Liens; (m) Liens in respect of Production Payments; (n)
Liens resulting from the deposit of funds or evidences of Indebtedness in trust
for the purpose of defeasing Indebtedness of the Company or any of its
Subsidiaries; (o) legal or equitable encumbrances deemed to exist by reason of
negative pledges or the existence of any litigation or other legal proceeding
and any related lis pendens filing (excluding any attachment prior to judgment,
judgment lien or attachment lien in aid of execution on a judgment); (p) rights
of a common owner of any interest in property held by such Person; (q) farmout,
carried working interest, joint operating, unitization, royalty, overriding
royalty, sales and similar agreements relating to the exploration or
development of, or production from, oil and gas properties entered into the
ordinary course of business; (r) any defects, irregularities or deficiencies in
title to easements, rights-of-way or other properties which do not in the
aggregate materially adversely affect the value of such properties or
materially impair their use in the operation
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of the business of such Person; and (s) Liens to secure any refinancing,
refunding, extension, renewal or replacement (or successive refinancings,
refundings, extensions, renewals or replacements), as a whole, or in part, of
any Indebtedness secured by any Lien referred to in the foregoing clauses (e)
through (m); provided, however, that (i) such new Lien shall be limited to all
or part of the same property that secured the original Lien (plus improvements
on such property) and (ii) the Indebtedness secured by such Lien at such time
is not increased to any amount greater than the sum of (A) the outstanding
principal amount or, if greater, committed amount of the Indebtedness described
under clauses (e) through (m) at the time the original Lien became a Permitted
Lien under this Indenture and (B) an amount necessary to pay any fees and
expenses, including premiums, related to such refinancing, refunding,
extension, renewal or replacement.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Place of Payment" means, when used with respect to the Debt
Securities of any series, the place or places where the principal of, and
premium, if any, and interest on, the Debt Securities of that series are
payable as specified pursuant to Section 2.03.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Production Payment" means the sale or granting of Liens with respect
to, or other transfer of, crude oil, natural gas or other petroleum
hydrocarbons in place for a period of time until or in an amount such that, the
transferee will realize therefrom a specified amount (however determined) of
money or of such crude oil, natural gas or other petroleum hydrocarbons, or the
sale or other transfer of any interest in an oil or gas property of the
character commonly referred to as a production payment, overriding royalty, net
profits interest, forward sale or similar interest.
"Purchase Money Lien" means a Lien on property securing Indebtedness
Incurred by the Company or any of its Subsidiaries to provide funds for all or
any portion of the cost of acquiring, constructing, altering, expanding,
improving or repairing such property or assets used in connection with such
property.
"Redeemable 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
(a) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (b) is convertible or exchangeable for Indebtedness (other than
Preferred Stock) or Disqualified Stock or (c) is redeemable at the option of
the holder thereof, in whole or in part.
"Registered Holder" means the Person in whose name a Registered
Security is registered in the Debt Security Register (as defined in Section
2.07(a)).
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"Registered Security" means any Debt Security registered as to
principal and interest in the Debt Security Register (as defined in Section
2.07(a)).
"Registrar" has the meaning set forth in Section 2.07(a).
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Indebtedness.
"responsible officer", when used with respect to the Trustee, means
any Account Manager or any officer within the [NAME OF TRUSTEE'S INSTITUTIONAL
TRUST GROUP] of the Trustee, including any Vice President, any Second Vice
President, any trust officer or any other officer of the Trustee performing
functions similar to those performed by the persons who at the time shall be
such officers, and any other officer of the Trustee to whom corporate trust
matters are referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Property" means any interest owned by the Company or any
of its Subsidiaries in property situated in the United States (both onshore and
offshore but excluding its territories and possessions) classified by such
owner as containing reserves or producing or being capable of production of
crude oil, natural gas or other petroleum hydrocarbons in commercial quantities
and any shares of capital stock or Indebtedness of a Subsidiary of the Company
that owns Restricted Property.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned on the Issue Date or thereafter acquired whereby the Company or any of
its Subsidiaries transfers such property to a Person and the Company or any of
its Subsidiaries leases it from such Person.
"Secured Indebtedness" means any Indebtedness of the Company secured by
a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means, as to any series of Debt Securities
subordinated pursuant to the provisions of Article XII, the Indebtedness of the
Company identified as Senior Indebtedness in the resolution of the Board of
Directors and accompanying Officers' Certificate or supplemental Indenture
setting forth the terms, including as to Subordination, of such series.
"Significant Subsidiary" means a Subsidiary of any Person that would
be a "significant subsidiary" as defined in Rule 405 under the Securities Act
as in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the 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 beyond the control of the issuer unless such contingency has
occurred).
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"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (a) such
Person, (b) such Person and one or more Subsidiaries of such Person or (c) one
or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (a)
investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (b) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States, any State thereof or any foreign country
recognized by the United States having capital, surplus and undivided profits
aggregating in excess of $500,000,000 (or the Dollar Equivalent thereof) and
whose long-term debt is rated "A" or higher according to Moody's Investors
Service, Inc. (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)), (c) repurchase obligations with a term of not more than 7
days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b)
above and (d) 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
or any foreign country recognized by the United States 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 Corporation.
"Trade Payables" means, with respect to any Person, any accounts
payable or any Indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
of such Person in connection with the acquisition of goods or services.
"Trustee" initially means [TRUSTEE] and any other Person or Persons
appointed as such from time to time pursuant to Section 7.08, and, subject to
the provisions of Article VII, includes its or their successors and assigns. If
at any time there is more than one such Person, "Trustee" as used with respect
to the Debt Securities of any series shall mean the Trustee with respect to the
Debt Securities of that series.
"Trust Indenture Act" (except as herein otherwise expressly provided)
means the Trust Indenture Act of 1939 as in force at the date of this Indenture
as originally executed and, to the extent required by law, as amended.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a nonresident alien individual,
a nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more members of which is, for United States Federal
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income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof.
"Yield to Maturity" means the yield to maturity, calculated at the
time of issuance of a series of Debt Securities, or, if applicable, at the most
recent redetermination of interest on such series and calculated in accordance
with accepted financial practice.
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the Trust Indenture Act
which are incorporated by reference in and made a part of this Indenture. The
following Trust Indenture Act terms have the following meanings:
"indenture securities" means the Debt Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Debt Securities.
All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, reference to another statute or defined by
rules of the Securities and Exchange Commission have the meanings assigned to
them by such definitions.
Section 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
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(e) words in the singular include the plural and words in the
plural include the singular;
(f) if the applicable series of Debt Securities are
subordinated pursuant to Article XII, unsecured Indebtedness shall not be
deemed to be subordinate or junior to Secured Indebtedness merely by virtue of
its nature as unsecured Indebtedness;
(g) 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
(h) the principal amount of any Preferred Stock shall be the
greater of (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.
ARTICLE II
DEBT SECURITIES
Section 2.01. FORMS GENERALLY. The Debt Securities and Coupons, if
any, of each series shall be in substantially the form established without the
approval of any Holder by or pursuant to a resolution of the Board of Directors
or in one or more Indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as the Company may deem appropriate (and, if not contained in a supplemental
Indenture entered into in accordance with Article IX, as are not prohibited by
the provisions of this Indenture) or as may be required or appropriate to
comply with any law or with any rules made pursuant thereto or with any rules
of any securities exchange on which such series of Debt Securities may be
listed, or to conform to general usage, or as may, consistently herewith, be
determined by the officers executing such Debt Securities and Coupons, as
evidenced by their execution of the Debt Securities and Coupons.
The definitive Debt Securities of each series and Coupons, if any,
shall be printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Debt Securities and Coupons, as evidenced by their execution of such Debt
Securities and Coupons.
Each Bearer Security and each Coupon shall bear a legend substantially
to the following effect: "Any United States Person who holds this obligation
will be subject to limitations under the United States Federal income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
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Section 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's Certificate of Authentication on all Debt Securities authenticated by
the Trustee shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
[TRUSTEE],
As Trustee
By:
------------------------------------------
Authorized Signature
Section 2.03. PRINCIPAL AMOUNT; ISSUABLE IN SERIES. The aggregate
principal amount of Debt Securities which may be issued, executed,
authenticated, delivered and outstanding under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall
be established, without the approval of any Holders, in or pursuant to a
resolution of the Board of Directors and set forth in an Officers' Certificate,
or established in one or more Indentures supplemental hereto, prior to the
issuance of Debt Securities of any series any or all of the following:
(a) the title of the Debt Securities of the series (which
shall distinguish the Debt Securities of the series from all other Debt
Securities);
(b) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);
(c) the date or dates on which the principal and premium, if
any, of the Debt Securities of the series are payable;
(d) the rate or rates (which may be fixed or variable) at
which the Debt Securities of the series shall bear interest, if any, or the
method of determining such rate or rates, the date or dates from which such
interest shall accrue, the interest payment dates on which such interest shall
be payable, or the method by which such date will be determined, in the case of
Registered Securities, the record dates for the determination of Holders
thereof to whom such interest is payable; and the basis upon which interest
will be calculated if other than that of a 360-day year of twelve thirty-day
months;
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(e) the place or places, if any, in addition to or instead of
the corporate trust office of the Trustee (in the case of Registered
Securities) or the principal London office of the Trustee (in the case of
Bearer Securities), where the principal of, and premium, if any, and interest
on, Debt Securities of the series shall be payable;
(f) the price or prices at which, the period or periods
within which and the terms and conditions upon which Debt Securities of the
series may be redeemed, in whole or in part, at the option of the Company or
otherwise;
(g) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer Securities
are to be issued, whether Coupons will be attached thereto, whether Bearer
Securities of the series may be exchanged for Registered Securities of the
series and the circumstances under which and the places at which any such
exchanges, if permitted, may be made;
(h) if any Debt Securities of the series are to be issued as
Bearer Securities or as one or more Global Securities representing individual
Bearer Securities of the series, (i) whether the provisions of Sections 3.02
and 4.06 or other provisions for payment of additional interest or tax
redemptions shall apply and, if other provisions shall apply, such other
provisions; (ii) whether interest in respect of any portion of a temporary
Bearer Security of the series (delivered pursuant to Section 2.08) payable in
respect of any interest payment date prior to the exchange of such temporary
Bearer Security for definitive Bearer Securities of the series shall be paid to
any clearing organization with respect to the portion of such temporary Bearer
Security held for its account and, in such event, the terms and conditions
(including any certification requirements) upon which any such interest payment
received by a clearing organization will be credited to the Persons entitled to
interest payable on such interest payment date; and (iii) the terms upon which
a temporary Bearer Security may be exchanged for one or more definitive Bearer
Securities of the series;
(i) the obligation, if any, of the Company to redeem,
purchase or repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligations;
(j) the terms, if any, upon which the Debt Securities of the
series may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by depositary shares), other Debt Securities or
warrants for Common Stock, Preferred Stock or Indebtedness or other securities
of any kind of the Company or any other obligor and the terms and conditions
upon which such conversion or exchange shall be effected, including the initial
conversion or exchange price or rate, the conversion or exchange period and any
other provision in addition to or in lieu of those described herein;
(k) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of the series
shall be issuable;
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(l) if the amount of principal of or any premium or interest
on Debt Securities of the series may be determined with reference to an index
or pursuant to a formula, the manner in which such amounts will be determined;
(m) if the principal amount payable at the Stated Maturity of
Debt Securities of the series will not be determinable as of any one or more
dates prior to such Stated Maturity, the amount which will be deemed to be such
principal amount as of any such date for any purpose, including the principal
amount thereof which will be due and payable upon any maturity other than the
Stated Maturity or which will be deemed to be Outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount is to
be determined); and the manner of determining the equivalent thereof in the
currency of the United States of America for purposes of the definition of
Dollar Equivalent;
(n) any changes or additions to Article XI, including the
addition of additional covenants that may be subject to the covenant defeasance
option pursuant to Section 11.02(b)(ii);
(o) if other than such coin or Currency of the United States
as at the time of payment is legal tender for payment of public and private
debts, the coin or Currency or Currencies or units of two or more Currencies in
which payment of the principal of, and premium, if any, and interest on, Debt
Securities of the series shall be payable;
(p) if other than the principal amount thereof, the portion
of the principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section
6.01 or provable in bankruptcy pursuant to Section 6.02;
(q) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Debt Securities of the series of any properties,
assets, moneys, proceeds, securities or other collateral, including whether
certain provisions of the Trust Indenture Act are applicable and any
corresponding changes to provisions of this Indenture as currently in effect;
(r) any addition to or change in the Events of Default with
respect to the Debt Securities of the series and any change in the right of the
Trustee or the Holders to declare the principal of, and premium and interest
on, such Debt Securities due and payable;
(s) if the Debt Securities of the series shall be issued in
whole or in part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Debt Securities in
definitive registered form; and the Depositary for such Global Security or
Securities and the form of any legend or legends to be borne by any such Global
Security or Securities in addition to or in lieu of the legend referred to in
Section 2.15;
(t) any trustees, authenticating or paying agents, transfer
agents or registrars;
(u) the applicability of, and any addition to or change in
the covenants and definitions currently set forth in this Indenture or in the
terms currently set forth in Article X,
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including conditioning any merger, conveyance, transfer or lease permitted by
Article X upon the satisfaction of an Indebtedness coverage standard by the
Company and Successor Company (as defined in Article X);
(v) the terms, if any, of any Guarantee of the payment of
principal of, and premium, if any, and interest on, Debt Securities of the
series and any corresponding changes to the provisions of this Indenture as
currently in effect;
(w) the subordination, if any, of the Debt Securities of the
series pursuant to Article XII and any changes or additions to Article XII;
(x) with regard to Debt Securities of the series that do not
bear interest, the dates for certain required reports to the Trustee; and
(y) any other terms of the Debt Securities of the series
(which terms shall not be prohibited by the provisions of this Indenture).
All Debt Securities of any one series and the Coupons, if any,
appertaining thereto shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to such resolution of
the Board of Directors and as set forth in such Officers' Certificate or in any
such Indenture supplemental hereto.
Section 2.04. EXECUTION OF DEBT SECURITIES. The Debt Securities and
the Coupons, if any, shall be signed on behalf of the Company by its Chairman
of the Board, its Vice Chairman, its President or a Vice President and by its
Secretary, an Assistant Secretary, a Treasurer or an Assistant Treasurer. Such
signatures upon the Debt Securities and Coupons may be the manual or facsimile
signatures of the present or any future such authorized officers and may be
imprinted or otherwise reproduced on the Debt Securities and Coupons. The seal
of the Company, if any, may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Debt Securities
and Coupons.
Only such Debt Securities and Coupons as shall bear thereon a
certificate of authentication substantially in the form hereinbefore recited,
signed manually by the Trustee, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Debt Security or Coupon executed by the Company shall be
conclusive evidence that the Debt Security or Coupon so authenticated has been
duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any of the
Debt Securities or Coupons shall cease to be such officer before the Debt
Securities or Coupons so signed shall have been authenticated and delivered by
the Trustee, or disposed of by the Company, such Debt Securities or Coupons
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debt Securities or Coupons had not ceased to be such
officer of the Company; and any Debt Security or Coupon may be signed on behalf
of the Company by such Persons as, at the actual date of the execution of such
Debt Security or Coupon, shall be the proper
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officers of the Company, although at the date of such Debt Security or Coupon
or of the execution of this Indenture any such Person was not such officer.
Section 2.05. AUTHENTICATION AND DELIVERY OF DEBT SECURITIES. At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Debt Securities, with appropriate Coupons, if any, of
any series executed by the Company to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Debt Securities and
Coupons to or upon a Company Order. In authenticating such Debt Securities and
Coupons, and accepting the additional responsibilities under this Indenture in
relation to such Debt Securities and Coupons, the Trustee shall be entitled to
receive, and (subject to Section 7.01) shall be fully protected in relying
upon:
(a) a copy of any resolution or resolutions of the Board of
Directors, certified by the Secretary or Assistant Secretary of the Company,
authorizing the terms of issuance of any series of Debt Securities and Coupons;
(b) an executed supplemental Indenture, if any;
(c) an Officers' Certificate; and
(d) an Opinion of Counsel prepared in accordance with Section
13.05 which shall also state:
(i) that the form of such Debt Securities and
Coupons has been established by or pursuant to a resolution of the
Board of Directors or by a supplemental Indenture as permitted by
Section 2.01 in conformity with the provisions of this Indenture;
(ii) that the terms of such Debt Securities and
Coupons have been established by or pursuant to a resolution of the
Board of Directors or by a supplemental Indenture as permitted by
Section 2.03 in conformity with the provisions of this Indenture;
(iii) that such Debt Securities and Coupons, when
authenticated and delivered by the Trustee and issued by the Company
in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and (B) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability;
(iv) that the Company has the corporate power to
issue such Debt Securities and Coupons and has duly taken all
necessary corporate action with respect to such issuance;
(v) that the issuance of such Debt Securities and
Coupons will not contravene the charter or by-laws of the Company or
result in any material violation of any
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of the terms or provisions of any law or regulation or of any
indenture, mortgage or other agreement known to such counsel by which
the Company is bound;
(vi) that authentication and delivery of such Debt
Securities and Coupons and the execution and delivery of any
supplemental Indenture will not violate the terms of this Indenture;
and
(vii) such other matters as the Trustee may
reasonably request.
Such Opinion of Counsel need express no opinion as to whether a court
in the United States would render a money judgment in a currency other than
that of the United States.
The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities or Coupons under this Section 2.05 if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
or if the Trustee in good faith by its board of directors or trustees,
executive committee or a trust committee of directors, trustees or vice
presidents shall determine that such action would expose the Trustee to
personal liability to existing Holders.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Debt Securities and Coupons, if any, of any
series. Unless limited by the terms of such appointment, an authenticating
agent may authenticate Debt Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
any Registrar, paying agent or agent for service of notices and demands.
Unless otherwise provided in the form of Debt Security for any series,
each Debt Security shall be dated the date of its authentication.
Section 2.06. DENOMINATION OF DEBT SECURITIES. Unless otherwise
provided in the form of Debt Security for any series, the Debt Securities of
each series shall be issuable only as Registered Securities in such
denominations as shall be specified or contemplated by Section 2.03. In the
absence of any such specification with respect to the Debt Securities of any
series, the Debt Securities of such series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
Section 2.07. REGISTRATION OF TRANSFER AND EXCHANGE. (a) The Company
shall keep or cause to be kept a register for each series of Registered
Securities issued hereunder (hereinafter collectively referred to as the "Debt
Security Register"), in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and the transfer of Registered Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for
inspection by the Trustee. Subject to Section 2.15, upon due presentment for
registration of transfer of any Registered Security at any office or agency to
be maintained by the Company in accordance with the provisions of Section 4.02,
the Company shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Registered Security or Registered
Securities of authorized denominations for a like
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aggregate principal amount. In no event may Registered Securities, including
Registered Securities received in exchange for Bearer Securities, be exchanged
for Bearer Securities.
Unless and until otherwise determined by the Company by resolution of
the Board of Directors, the register of the Company for the purpose of
registration, exchange or registration of transfer of the Registered Securities
shall be kept at the corporate trust office of the Trustee and, for this
purpose, the Trustee shall be designated "Registrar".
Registered Securities of any series (other than a Global Security,
except as set forth below) may be exchanged for a like aggregate principal
amount of Registered Securities of the same series of other authorized
denominations. Subject to Section 2.15, Registered Securities to be exchanged
shall be surrendered at the office or agency to be maintained by the Company as
provided in Section 4.02, and the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor the Registered Security or
Registered Securities which the Holder making the exchange shall be entitled to
receive.
At the option of the Holder of Bearer Securities of any series, except
as otherwise specified as contemplated by Section 2.03(8) or 2.03(19) with
respect to a Global Security representing Bearer Securities, Bearer Securities
of such series may be exchanged for Registered Securities (if the Debt
Securities of such series are issuable as Registered Securities) or Bearer
Securities of the same series, of any authorized denomination or denominations,
of like tenor and aggregate principal amount, upon surrender of the Bearer
Securities to be exchanged at the office or agency of the Company maintained
for such purpose, with all unmatured Coupons and all matured Coupons in Default
thereto appertaining; provided, however, that delivery of a Bearer Security
shall occur only outside the United States. If such Holder is unable to produce
any such unmatured Coupon or Coupons or matured Coupon or Coupons in Default,
such exchange may be effected if such Holder's Bearer Securities are
accompanied by payment in funds acceptable to the Company and the Trustee in an
amount equal to the face amount of such missing Coupon or Coupons, or the
surrender of such missing Coupon or Coupons may be waived by the Company and
the Trustee if there be furnished to them such security or indemnity as they
may require to save each of them and any paying agent harmless. If thereafter
such Holder shall surrender to any paying agent any such missing Coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; provided, however, that, except
as otherwise provided in Section 2.12, interest represented by Coupons shall be
payable only upon presentation and surrender of those Cou pons at an office or
agency located outside the United States.
Whenever any Debt Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Debt
Securities that the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Debt Securities in effect at the time of
such exchange.
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(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed or be accompanied by a
written instrument or instruments of transfer, in form satisfactory to the
Company, the Trustee and the Registrar, duly executed by the Registered Holder
or his attorney duly authorized in writing.
All Debt Securities issued in exchange for or upon transfer of Debt
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture as the Debt
Securities surrendered for such exchange or transfer.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities (except as provided by Section 2.09), but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto, other than those
expressly provided in this Indenture to be made at the Company's own expense or
without expense or without charge to the Holders.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Debt Securities for a period of 15 days next preceding any
mailing of notice of redemption of Debt Securities of such series or (ii) to
register the transfer of or exchange any Debt Securities selected, called or
being called for redemption; provided, however, that, if specified pursuant to
Section 2.03, any Bearer Securities of any series that are exchangeable for
Registered Securities and that are called for redemption pursuant to Section
3.02 may, to the extent permitted by applicable law, be exchanged for one or
more Registered Securities of such series during the period preceding the
redemption date therefor.
Prior to the due presentation for registration of transfer of any Debt
Security, the Company, the Trustee, any paying agent or any Registrar may deem
and treat the Person in whose name a Debt Security is registered as the
absolute owner of such Debt Security for the purpose of receiving payment of
principal of, and premium, if any, and interest on, such Debt Security and for
all other purposes whatsoever, whether or not such Debt Security is overdue,
and none of the Company, the Trustee, any paying agent or Registrar shall be
affected by notice to the contrary.
None of the Company, the Trustee, any agent of the Trustee, any paying
agent or any Registrar will have any responsibility or liability for any aspect
of the records relating to, or payments made on account of, beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Section 2.08. TEMPORARY DEBT SECURITIES. Pending the preparation of
definitive Debt Securities of any series, the Company may execute and the
Trustee shall authenticate and deliver temporary Debt Securities (printed,
lithographed, photocopied, typewritten or otherwise produced) of any authorized
denomination, and substantially in the form of the definitive Debt Securities
in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more Coupons or without Coupons, and with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities and Coupons, all as may be determined by the Company with the
concurrence of the Trustee. Temporary Debt Securities and Coupons may contain
such
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reference to any provisions of this Indenture as may be appropriate. Every
temporary Debt Security shall be executed by the Company and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. Except as otherwise specified as contemplated by Section
2.03(8)(z) with respect to a series of Debt Securities issuable as Bearer
Securities or as one or more Global Securities representing individual Bearer
Securities of the series, (a) after the preparation of definitive Debt
Securities of such series, the temporary Debt Securities of such series shall
be exchangeable for definitive Debt Securities of such series upon surrender of
the temporary Debt Securities of such series at the office or agency of the
Company at a Place of Payment for such series, without charge to the Holder
thereof, except as provided in Section 2.07 in connection with a transfer and
except that a Person receiving definitive Bearer Securities shall bear the cost
of insurance, postage, transportation and the like unless otherwise specified
pursuant to Section 2.03, and (b) upon surrender for cancelation of any one or
more temporary Debt Securities of any series (accompanied by any unmatured
Coupons appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Debt Securities of the same series of authorized denominations and
of like tenor; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided,
further, however, that delivery of a Global Security representing individual
Bearer Securities or a Bearer Security shall occur only outside the United
States. Until so exchanged, temporary Debt Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities of such series, except as otherwise specified as
contemplated by Section 2.03(8)(y) with respect to the payment of interest on
Global Securities in temporary form.
Unless otherwise specified pursuant to Section 2.03, the Company will
execute and deliver each definitive Global Security representing individual
Bearer Securities and each Bearer Security to the Trustee at its principal
office in London or such other place outside the United States specified
pursuant to Section 2.03.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Debt Securities represented
thereby pursuant to Section 2.07 or this Section 2.08, the temporary Global
Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount to be
exchanged and endorsed.
Section 2.09. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES. If
(a) any mutilated Debt Security or any mutilated Coupon with the Coupon
Security to which it appertains (and all unmatured Coupons attached thereto) is
surrendered to the Trustee at its corporate trust office (in the case of
Registered Securities) or at its principal London office (in the case of Bearer
Securities) or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debt Security or any
Coupon, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them and any paying agent
harmless, and neither the Company nor the Trustee receives notice that such
Debt Security or
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Coupon has been acquired by a bona fide purchaser, then the Company shall
execute and, upon a Company Order, the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Debt Security or in exchange for the Coupon Security to which such mutilated,
destroyed, lost or stolen Coupon appertained, a new Debt Security of the same
series of like tenor, form, terms and principal amount, bearing a number not
contemporaneously Outstanding, and, in the case of a Coupon Security, with such
Coupons attached thereto that neither gain nor loss in interest shall result
from such exchange or substitution. Upon the issuance of any substituted Debt
Security, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses connected therewith. In case any Debt Security or Coupon
which has matured or is about to mature or which has been called for redemption
shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substituted Debt Security or Coupon, pay or authorize the
payment of the same (without surrender thereof except in the case of a
mutilated Debt Security or Coupon) if the applicant for such payment shall
furnish the Company and the Trustee with such security or indemnity as either
may require to save it harmless from all risk, however remote, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debt Security or Coupon and
of the ownership thereof; provided, however, that payment of principal of, and
premium, if any, and interest on, Bearer Securities or Coupons shall, except as
otherwise provided in Section 2.12, be payable only at an office or agency
located outside the United States.
Every substituted Debt Security of any series, with its Coupons, if
any, issued pursuant to the provisions of this Section 2.09 by virtue of the
fact that any Debt Security or Coupon is destroyed, lost or stolen shall
constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debt Security or Coupon shall be
found at any time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debt Securities of that
series and Coupons, if any, duly issued hereunder. All Debt Securities and
Coupons, if any, shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debt Securities or Coupons, and shall
preclude any and all other rights or remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
Section 2.10. CANCELATION OF SURRENDERED DEBT SECURITIES. All Debt
Securities surrendered for payment, redemption, registration of transfer or
exchange and all Coupons surrendered for payment or exchange shall, if
surrendered to the Company or any paying agent or a Registrar, be delivered to
the Trustee for cancelation by it, or if surrendered to the Trustee, shall be
canceled by it, and no Debt Securities or Coupons shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture. All canceled Debt Securities and Coupons held by the Trustee shall
be destroyed (subject to the record retention requirements of the Exchange Act)
and certification of their destruction delivered to the Company, unless
otherwise directed. On request of the Company, the Trustee shall deliver to the
Company canceled Debt Securities and Coupons held by the Trustee. If the
Company shall acquire any of the Debt Securities or Coupons, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented thereby unless and until the same are delivered or
surrendered to the
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Trustee for cancelation. The Company may not issue new Debt Securities or
Coupons to replace Debt Securities or Coupons it has redeemed, paid or
delivered to the Trustee for cancelation.
Section 2.11. PROVISIONS OF THE INDENTURE AND DEBT SECURITIES FOR THE
SOLE BENEFIT OF THE PARTIES AND THE HOLDERS. Nothing in this Indenture or in
the Debt Securities or Coupons, expressed or implied, shall give or be
construed to give to any Person, other than the parties hereto, the Holders or
any Registrar or paying agent, any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or
provision herein contained; all its covenants, conditions and provisions being
for the sole benefit of the parties hereto, the Holders and any Registrar and
paying agents.
Section 2.12. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. (a)
Interest on any Registered Security that is payable and is punctually paid or
duly provided for on any interest payment date shall be paid to the Person in
whose name such Registered Security is registered at the close of business on
the regular record date for such interest notwithstanding the cancelation of
such Registered Security upon any transfer or exchange subsequent to the
regular record date. In case a Coupon Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any regular
record date and before the opening of business (at such office or agency) on
the next succeeding interest payment date, such Coupon Security shall be
surrendered without the Coupon relating to such interest payment date and
interest will not be payable on such interest payment date in respect of the
Registered Security issued in exchange for such Coupon Security, but will be
payable only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture. Payment of interest on Registered Securities
shall be made at the corporate trust office of the Trustee (except as otherwise
specified pursuant to Section 2.03), or at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Debt Security Register or, if provided pursuant to Section 2.03
and in accordance with arrangements satisfactory to the Trustee, at the option
of the Registered Holder by wire transfer to an account designated by the
Registered Holder.
(b) No interest shall be payable with respect to a Bearer
Security or Coupon unless such certification requirements as are specified
pursuant to Section 2.03(8)(z) are satisfied with respect to such Bearer
Security or Coupon. Interest on any Coupon Security that is payable and is
punctually paid or duly provided for on any interest payment date shall be paid
to the Holder of the Coupon that has matured on such interest payment date upon
surrender of such Coupon on such interest payment date at the principal London
office of the Trustee or at such other Place of Payment outside the United
States specified pursuant to Section 2.03.
Interest on any Bearer Security (other than a Coupon Security) that is
payable and is punctually paid or duly provided for on any interest payment
date shall be paid to the Holder of the Bearer Security upon presentation of
such Bearer Security and notation thereon on such interest payment date at the
principal London office of the Trustee or at such other Place of Payment
outside the United States specified pursuant to Section 2.03.
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Unless otherwise specified pursuant to Section 2.03, at the direction
of the Holder of any Bearer Security or Coupon payable in Dollars, and subject
to applicable laws and regulations, payments in respect of such Bearer Security
or Coupon will be made by check drawn on a bank in New York, New York, or, in
accordance with arrangements satisfactory to the Trustee, by wire transfer to a
Dollar account maintained by such Holder with a bank outside the United States.
If such payment at the offices of all paying agents outside the United States
becomes illegal or is effectively precluded because of the imposition of
exchange controls or similar restrictions on the full payment or receipt of
such amounts in Dollars, then, to the extent permitted by United States tax
law, the Company will appoint an office or agent in the United States at which
such payment may be made. Unless otherwise specified pursuant to Section 2.03,
at the direction of the Holder of any Bearer Security or Coupon payable in a
Foreign Currency, payment on such Bearer Security or Coupon will be made by a
check drawn on a bank outside the United States or, in accordance with
arrangements satisfactory to the Trustee, by wire transfer to an appropriate
account maintained by such Holder outside the United States. Except as provided
in this paragraph, no payment on any Bearer Security or Coupon will be made by
mail to an address in the United States or by transfer to an account in the
United States.
(c) Subject to the foregoing provisions of this Section 2.12
and Section 2.17, each Debt Security of a particular series delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu
of any other Debt Security of the same series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debt Security.
Section 2.13. SECURITIES DENOMINATED IN FOREIGN CURRENCIES. (a) Except
as otherwise specified pursuant to Section 2.03 for Bearer Securities of any
series, payment of the principal of, and premium, if any, and interest on,
Bearer Securities of such series denominated in any Currency will be made in
such Currency.
(b) Except as otherwise specified pursuant to Section 2.03
for Registered Securities of any series, payment of the principal of, and
premium, if any, and interest on, Registered Securities of such series will be
made in Dollars.
(c) For the purposes of calculating the principal amount of
Debt Securities of any series denominated in a Foreign Currency or in units of
two or more Foreign Currencies (including European Currency Units) for any
purpose under this Indenture, the principal amount of such Debt Securities at
any time Outstanding shall be deemed to be the Dollar Equivalent of such
principal amount as of the date of any such calculation.
In the event any Foreign Currency or currencies or units of two or
more Currencies in which any payment with respect to any series of Debt
Securities may be made ceases to be a freely convertible Currency on United
States Currency markets, for any date thereafter on which payment of principal
of, or premium, if any, or interest on, the Debt Securities of a series is due,
the Company shall select the Currency of payment for use on such date, all as
provided in the Debt Securities of such series. In such event, the Company
shall, as provided in the Debt Securities of such series, notify the Trustee of
the Currency which it has selected to constitute the funds necessary to meet
the Company's obligations on such payment date and of the amount of such
Currency to be paid. Such
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amount shall be determined as provided in the Debt Securities of such series.
The payment to the Trustee with respect to such payment date shall be made by
the Company solely in the Currency so selected.
Section 2.14. WIRE TRANSFERS. Notwithstanding any other provision to
the contrary in this Indenture, the Company may make any payment of monies
required to be deposited with the Trustee on account of principal of, or
premium, if any, or interest on, the Debt Securities (whether pursuant to
optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer in immediately available funds to an account designated by the
Trustee on or before the date such moneys are to be paid to the Holders of the
Debt Securities in accordance with the terms hereof.
Section 2.15. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Sections 2.01 and 2.03 that the
Debt Securities of a particular series are to be issued in whole or in part in
the form of one or more Global Securities, then the Company shall execute and
the Trustee or its agent shall, in accordance with Section 2.05, authenticate
and deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Debt Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
an Officer's Certificate, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or its nominee, (iii) shall
be delivered by the Trustee or its agent to the Depositary or pursuant to the
Depositary's instruction and (iv) shall bear a legend substantially to the
following effect: 'Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented hereby, this Global Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary', or such other legend as may then be
required by the Depositary for such Global Security or Securities.
(b) Notwithstanding any other provision of this Section 2.15
or of Section 2.07 to the contrary, and subject to the provisions of paragraph
(c) below, unless the terms of a Global Security expressly permit such Global
Security to be exchanged in whole or in part for definitive Debt Securities in
registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee
of the Depositary for such Global Security, or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary, or by the Depositary or
a nominee of the Depositary to a successor Depositary for such Global Security
selected or approved by the Company, or to a nominee of such successor
Depositary.
(c) (i) If at any time the Depositary for a Global Security
or Securities notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or Securities or if at
any time the Depositary for the Debt Securities for such series shall
no longer be eligible or in good standing under the Exchange Act or
other applicable statute, rule or regulation, the Company shall
appoint a successor Depositary with respect to such Global Security or
Securities. If a successor Depositary for such Global Security or
Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility,
the Company shall execute, and the Trustee
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or its agent, upon receipt of a Company Order for the authentication
and delivery of such individual Debt Securities of such series in
exchange for such Global Security, will authenticate and deliver,
individual Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global
Security or Securities.
(ii) The Company may at any time and in its sole
discretion determine that the Debt Securities of any series or portion
thereof issued or issuable in the form of one or more Global
Securities shall no longer be represented by such Global Security or
Securities. In such event the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
individual Debt Securities of such series in exchange in whole or in
part for such Global Security, will authenticate and deliver
individual Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the
principal amount of such series or portion thereof in exchange for
such Global Security or Securities.
(iii) If specified by the Company pursuant to
Sections 2.01 and 2.03 with respect to Debt Securities issued or
issuable in the form of a Global Security, the Depositary for such
Global Security may surrender such Global Security in exchange in
whole or in part for individual Debt Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to
the Company, the Trustee and such Depositary. Thereupon the Company
shall execute, and the Trustee or its agent upon receipt of a Company
Order for the authentication and delivery of definitive Debt
Securities of such series shall authenticate and deliver, without
service charge, (A) to each Person specified by such Depositary a new
Debt Security or Securities of the same series of like tenor and terms
and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and (B) to such Depositary
a new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Debt Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the
preceding three paragraphs, the Company will execute and the Trustee
or its agent will authenticate and deliver individual Debt Securities.
In case a Coupon Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at
an office or agency in a Place of Payment for such series) on any
special record date and before the opening of business (at such office
or agency) on the related proposed date of payment of Defaulted
Interest, such Coupon Security shall be surrendered without the Coupon
relating to such proposed date of payment and Defaulted Interest will
not be payable on such proposed date of payment in respect of the
Registered Security issued in exchange for such Coupon Security, but
will be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture. Upon the exchange of
the entire principal amount of a Global Security for individual Debt
Securities, such Global Security shall be canceled by the Trustee or
its agent. Except as provided in the preceding paragraph,
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Registered Securities issued in exchange for a Global Security
pursuant to this Section 2.15 shall be registered in such names and in
such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or the
Registrar. The Trustee or the Registrar shall deliver such Registered
Securities to the Persons in whose names such Registered Securities
are so registered.
(v) Payments in respect of the principal of and
interest on any Debt Securities registered in the name of the
Depositary or its nominee will be payable to the Depositary or such
nominee in its capacity as the registered owner of such Global
Security. The Company and the Trustee may treat the Person in whose
name the Debt Securities, including the Global Security, are
registered as the owner thereof for the purpose of receiving such
payments and for any and all other purposes whatsoever. None of the
Company, the Trustee, any Registrar, the paying agent or any agent of
the Company or the Trustee will have any responsibility or liability
for (A) any aspect of the records relating to or payments made on
account of the beneficial ownership interests of the Global Security
by the Depositary or its nominee or any of the Depositary's direct or
indirect participants, or for maintaining, supervising or reviewing
any records of the Depositary, its nominee or any of its direct or
indirect participants relating to the beneficial ownership interests
of the Global Security, (B) the payments to the beneficial owners of
the Global Security of amounts paid to the Depositary or its nominee,
or (C) any other matter relating to the actions and practices of the
Depositary, its nominee or any of its direct or indirect participants.
None of the Company, the Trustee or any such agent will be liable for
any delay by the Depositary, its nominee, or any of its direct or
indirect participants in identifying the beneficial owners of the Debt
Securities, and the Company and the Trustee may conclusively rely on,
and will be protected in relying on, instructions from the Depositary
or its nominee for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of
the Debt Securities to be issued).
The Trustee shall deliver individual Bearer Securities issued in
exchange for a Global Security pursuant to this Section 2.15 to the Persons and
in such authorized denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee; provided, however, that individual Bearer
Securities shall be delivered in exchange for a Global Security only in
accordance with the procedures as may be specified pursuant to Section 2.03.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to debt Securities in effect at the time of
such exchange.
Section 2.16. MEDIUM TERM SECURITIES. Notwithstanding any contrary
provision herein, if all Debt Securities of a series are not to be originally
issued at one time, it shall not be necessary for the Company to deliver to the
Trustee an Officers' Certificate, resolutions of the Board of Directors,
supplemental Indenture, Opinion of Counsel or written order or any other
document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or
prior to the time of
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authentication of each Debt Security of such series if such documents are
delivered to the Trustee or its agent at or prior to the authentication upon
original issuance of the first such Debt Security of such series to be issued;
provided, that any subsequent request by the Company to the Trustee to
authenticate Debt Securities of such series upon original issuance shall
constitute a representation and warranty by the Company that, as of the date of
such request, the statements made in the Officers' Certificate delivered
pursuant to Section 2.05 or 13.05 shall be true and correct as if made on such
date and that the Opinion of Counsel delivered at or prior to such time of
authentication of an original issuance of Debt Securities shall specifically
state that it shall relate to all subsequent issuances of Debt Securities of
such series that are identical to the Debt Securities issued in the first
issuance of Debt Securities of such series.
A Company Order delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph, may provide that Debt
Securities which are the subject thereof will be authenticated and delivered by
the Trustee or its agent on original issue from time to time upon the
telephonic or written order of Persons designated in such written order (any
such telephonic instructions to be promptly confirmed in writing by such
Person) and that such Persons are authorized to determine, consistent with the
Officers' Certificate, supplemental Indenture or resolution of the Board of
Directors relating to such written order, such terms and conditions of such
Debt Securities as are specified in such Officers' Certificate, supplemental
Indenture or such resolution.
Section 2.17. DEFAULTED INTEREST. (a) Any interest on any Debt
Security of a particular series which is payable, but is not punctually paid or
duly provided for, on the dates and in the manner provided in the Debt
Securities of such series and in this Indenture (herein called "Defaulted
Interest") shall, if such Debt Security is a Registered Security, forthwith
cease to be payable to the Registered Holder thereof on the relevant record
date by virtue of having been such Registered Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
(i) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities of such series are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each such Registered Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and
the special record
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date therefor to be mailed, first class postage pre-paid, to each
Holder thereof at its address as it appears in the Security Register,
not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record
date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Registered Securities of such
series are registered at the close of business on such special record
date. In case a Coupon Security of any such series is surrendered in
exchange for a Registered Security of such series after the close of
business (at an office or agency in a Place of Payment for such
series) on any special record date and before the opening of business
(at such office or agency) on the related proposed date of payment of
Defaulted Interest, such Coupon Security shall be surrendered without
the Coupon relating to such proposed date of payment and Defaulted
Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Coupon
Security, but will be payable only to the Holder of such Coupon when
due in accordance with the provisions of this Indenture.
(ii) The Company may make payment of any Defaulted
Interest on the Registered Securities of such series in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Registered Securities of such series may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
(b) Any Defaulted Interest payable in respect of Bearer
Securities of any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities of
such series, and notice of the payment date therefor shall be given by the
Trustee, in the name and at the expense of the Company, in the manner provided
in Section 13.03 not more than 25 days and not less than 20 days prior to the
date of the proposed payment.
Section 2.18. JUDGMENTS. The Company may provide pursuant to Section
2.03 for Debt Securities of any series that (a) the obligation, if any, of the
Company to pay the principal of, and premium, if any, and interest on, the Debt
Securities of any series in a Foreign Currency or Dollars (the "Designated
Currency") as may be specified pursuant to Section 2.03 is of the essence and
agrees that, to the fullest extent possible under applicable law, judgments in
respect of Debt Securities of such series shall be given in the Designated
Currency; (b) the obligation of the Company to make payments in the Designated
Currency of the principal of, and premium, if any, and interest on, such Debt
Securities shall, notwithstanding any payment in any other Currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the Designated Currency that the Holder receiving such payment may,
in accordance with normal banking procedures, purchase with the sum paid in
such other Currency (after any premium and cost of exchange) on the business
day in the country of issue of the Designated Currency or in the international
banking community (in the case of a composite currency) immediately following
the day on which such Holder receives such payment; (c) if the amount in the
Designated Currency that may be so purchased for any reason falls short of the
amount originally due, the Company shall pay such additional amounts as may be
necessary to compensate for such shortfall; and (d) any obligation
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of the Company not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to the Debt Securities of any series which are redeemable
before their Stated Maturity except as otherwise specified as contemplated by
Section 2.03 for Debt Securities of such series.
Section 3.02. TAX REDEMPTION; SPECIAL TAX REDEMPTION. (a) Unless
otherwise specified pursuant to Section 2.03, Bearer Securities of any series
may be redeemed at the option of the Company in whole, but not in part, at any
time, on giving not less than 30 or more than 60 days' notice in accordance
with Section 3.03 (which notice shall be irrevocable), at the redemption price
thereof (calculated without premium), if the Company has or will become
obligated to pay additional interest on such Bearer Securities pursuant to
Section 4.06 as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or any change in
the application or official interpretation of such laws, regulations or
rulings, which change or amendment becomes effective on or after the date on
which any Person (including any Person acting as underwriter, broker or dealer)
agrees to purchase any of such Bearer Securities pursuant to their original
issuance, and such obligation cannot be avoided by the Company taking
reasonable measures available to it; provided, that no such notice of
redemption shall be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay such additional interest were a
payment in respect of the Bearer Securities of that series then due. Prior to
the publication of any notice of redemption pursuant to this Section 3.02(a),
the Company shall deliver to the Trustee (i) an Officers' Certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (ii) an Opinion of Counsel to the effect
that the Company has or will become obligated to pay such additional interest
as a result of such change or amendment.
(b) Unless otherwise specified pursuant to Section 2.03, if
the Company shall determine that any payment made outside the United States by
the Company or any of its paying agents in respect of any Bearer Security or
Coupon would, under any present or future laws or regulations of the United
States, be subject to any certification, documentation, information or other
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any paying agent or any governmental authority of
the nationality, residence or identity of a beneficial owner of such Bearer
Security or Coupon that is a United States Alien (other than such a requirement
(i) that would not be applicable to a payment made by the Company or any one of
its paying agents (A) directly to the beneficial owner or (B) to a custodian,
nominee or other agent of the beneficial owner, or (ii) that can be satisfied
by such custodian, nominee or other agent certifying to the effect that the
beneficial owner is a United States Alien; provided, that, in any case referred
to in clause (i)(B) or (ii), payment by the custodian, nominee or agent to the
beneficial owner is not
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otherwise subject to any such requirement), then the Company shall elect either
(A) to redeem such Bearer Security or Coupon in whole, but not in part, at the
redemption price thereof (calculated without premium) or (B) if the conditions
of the next succeeding paragraph are satisfied, to pay the additional interest
specified in such paragraph. The Company shall make such determination as soon
as practicable and publish prompt notice thereof (the "Determination Notice"),
stating the effective date of such certification, documentation, information or
other reporting requirement, whether the Company elects to redeem the Bearer
Security or Coupon or to pay the additional interest specified in the next
succeeding paragraph and (if applicable) the last date by which the redemption
of the Bearer Security or Coupon must take place, as provided in the next
succeeding sentence. If any Bearer Security or Coupon is to be redeemed
pursuant to this paragraph, the redemption shall take place on such date, not
later than one year after the publication of the Determination Notice, as the
Company shall specify by notice given to the Trustee at least 60 days before
the redemption date. Notice of such redemption shall be given by the Company to
the Holders of the Bearer Security or Coupon not more than 60 days or less than
30 days prior to the redemption date. Notwithstanding the foregoing, the
Company shall not so redeem the Bearer Security or Coupon if the Company shall
subsequently determine, not less than 30 days prior to the redemption date,
that subsequent payments on the Bearer Security or Coupon would not be subject
to any such certification, documentation, information or other reporting
requirement, in which case the Company shall publish prompt notice of such
subsequent determination, and any earlier redemption notice given pursuant to
this paragraph shall be revoked and of no further effect. Prior to the
publication of any Determination Notice pursuant to this paragraph, the Company
shall deliver to the Trustee (1) an Officers' Certificate stating that the
Company is entitled to make such determination and setting forth a statement of
facts showing that the conditions precedent to the obligation of the Company to
redeem the Bearer Security or Coupon or to pay the additional interest
specified in the next succeeding paragraph have occurred and (2) an Opinion of
Counsel to the effect that such conditions have occurred.
If and so long as the certification, documentation, information or
other reporting requirement referred to in the preceding paragraph would be
fully satisfied by payment of a backup withholding tax or similar charge, the
Company may elect to pay as additional interest such amounts as may be
necessary so that every net payment made outside the United States following
the effective date of such requirement by the Company or any of its paying
agents in respect of any Bearer Security or Coupon of which the beneficial
owner is a United States Alien (but without any requirement that the
nationality, residence or identity of such beneficial owner be disclosed to the
Company, any paying agent or any governmental authority), after deduction or
withholding for or on account of such backup withholding tax or similar charge
that (x) would not be applicable in the circumstances referred to in the
parenthetical clause of the first sentence of the preceding paragraph or (y) is
imposed as a result of presentation of any such Bearer Security or Coupon for
payment more than 15 days after the date on which such payment became due and
payable or on which payment thereof was duly provided for, whichever occurred
later), will not be less than the amount provided in any such Bearer Security
or Coupon to be then due and payable. If the Company elects to pay additional
interest pursuant to this paragraph, the Company shall have the right to redeem
the Bearer Security or Coupon at any time in whole, but not in part, at the
redemption price thereof (calculated without premium), subject to the
provisions of the last three sentences of the immediately preceding paragraph.
If the Company elects to pay additional interest pursuant to this paragraph and
the condition specified in the first sentence of this paragraph should no
longer be satisfied, then the
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Company shall redeem the Bearer Security or Coupon in whole, but not in part,
at the redemption price thereof (calculated without premium), subject to the
provisions of the last three sentences of the immediately preceding paragraph.
Any redemption payments made by the Company pursuant to the two immediately
preceding sentences shall be subject to the continuing obligation of the
Company to pay additional interest pursuant to this paragraph. If the Company
elects to, or is required to, redeem the Bearer Security or Coupon pursuant to
this paragraph, it shall publish prompt notice thereof. If the Bearer Security
or Coupon is to be redeemed pursuant to this paragraph, the redemption shall
take place on such date, not later than one year after publication of the
notice of redemption, as the Company shall specify by notice to the Trustee at
least 60 days prior to the redemption date.
Section 3.03. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debt Securities of any series in accordance with
their terms, a resolution of the Board of Directors of the Company or a
supplemental Indenture, the Company shall fix a date for redemption and shall
give notice of such redemption at least 30 and not more than 60 days prior to
the date fixed for redemption to the Holders of Debt Securities of such series
so to be redeemed as a whole or in part, in the manner provided in Section
13.03. The notice if given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to
the Holder of any Debt Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debt Security of such series.
Each such notice of redemption shall specify the date fixed for
redemption, the redemption price at which Debt Securities of such series are to
be redeemed, the Place or Places of Payment that payment will be made upon
presentation and surrender of such Debt Securities, that any interest accrued
to the date fixed for redemption will be paid as specified in said notice, that
the redemption is for a sinking fund payment (if applicable), that, unless
otherwise specified in such notice, Coupon Securities of any series, if any,
surrendered for redemption must be accompanied by all Coupons maturing
subsequent to the date fixed for redemption, failing which the amount of any
such missing Coupon or Coupons will be deducted from the redemption price, if
the Bearer Securities of any series are to be redeemed and any Registered
Securities of such series are not to be redeemed, and if such Bearer Securities
may be exchanged for Registered Securities not subject to redemption on the
applicable redemption date pursuant to Section 2.15(c) or otherwise, the last
date on which such exchanges may be made, that, if the Company defaults in
making such redemption payment or if the Debt Securities of that series are
subordinated pursuant to the terms of Article XII, the paying agent is
prohibited from making such payment pursuant to the terms of this Indenture,
that on and after said date any interest thereon or on the portions thereof to
be redeemed will cease to accrue, that in the case of Original Issue Discount
Securities original issue discount accrued after the date fixed for redemption
will cease to accrue, the terms of the Debt Securities of that series pursuant
to which the Debt Securities of that series are being redeemed and that no
representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Debt Securities of that series.
If less than all the Debt Securities of a series are to be redeemed the notice
of redemption shall specify the CUSIP numbers of the Debt Securities of that
series to be redeemed. In case any Debt Security of a series is to be redeemed
in part only, the notice of redemption shall
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state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Debt Security, a new Debt Security or Debt Securities of that series in
principal amount equal to the unredeemed portion thereof, and in the case of a
Bearer Security with appropriate Coupons, if any, will be issued.
At least 60 days before the redemption date unless the Trustee
consents to a shorter period, the Company shall give notice to the Trustee of
the redemption date, the principal amount of Debt Securities to be redeemed and
the series and terms of the Debt Securities pursuant to which such redemption
will occur. 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. If fewer than all the Debt Securities of a
series are to be redeemed, the record date relating to such redemption shall be
selected by the Company and given to the Trustee, which record date shall be
not less than 15 days after the date of notice to the Trustee.
On or prior to the redemption date for any Registered Securities, the
Company shall deposit with the Trustee or with a paying agent (or, if the
Company is acting as its own paying agent, segregate and hold in trust) an
amount of money in the Currency in which such Debt Securities are denominated
(except as provided pursuant to Section 2.03) sufficient to pay the redemption
price of such Registered Securities or any portions thereof that are to be
redeemed on that date. In the case of any redemption pertaining to Bearer
Securities or Coupon Securities, the Company shall, no later than the business
day prior to such redemption date, deposit with the Trustee or with a paying
agent (other than the Company) an amount of money in the Currency in which such
Debt Securities are denominated (except as provided pursuant to Section 2.03)
sufficient to pay the redemption price of such Bearer or Coupon Securities or
any portion thereof that are to be redeemed on the redemption date.
If less than all the Debt Securities of like tenor and terms of a
series are to be redeemed (other than pursuant to mandatory sinking fund
redemptions) the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Debt Securities of that series or
portions thereof (in multiples of $1,000) to be redeemed. In any case where
more than one Registered Security of such series is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Registered Security of such series.
The Trustee shall promptly notify the Company in writing of the Debt Securities
selected for redemption and, in the case of any Debt Securities selected for
partial redemption, the principal amount thereof to be redeemed. If any Debt
Security called for redemption shall not be so paid upon surrender thereof on
such redemption date, the principal, premium, if any, and interest shall bear
interest until paid from the redemption date at the rate borne by the Debt
Securities of that series. If less than all the Debt Securities of unlike tenor
and terms of a series are to be redeemed, the particular Debt Securities to be
redeemed shall be selected by the Company. Provisions of this Indenture that
apply to Debt Securities called for redemption also apply to portions of Debt
Securities called for redemption.
Section 3.04. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION. If
notice of redemption has been given as provided in Section 3.03, the Debt
Securities or portions of Debt Securities of the series with respect to which
such notice has been given shall become due and
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payable on the date and at the Place or Places of Payment stated in such notice
at the applicable redemption price, together with any interest accrued to the
date fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Debt Securities at the applicable redemption
price, together with any interest accrued to said date) any interest on the
Debt Securities or portions of Debt Securities of any series so called for
redemption shall cease to accrue, any original issue discount in the case of
Original Issue Discount Securities shall cease to accrue and any Coupons for
such interest appertaining to any Coupon Securities to be redeemed, except to
the extent described below, shall be void. On presentation and surrender of
such Debt Securities at the Place or Places of Payment in said notice
specified, the said Debt Securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with any interest accrued thereon to the date fixed for redemption.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
applicable redemption date, the redemption price for such Coupon Security may
be reduced by an amount equal to the face amount of all such missing Coupons.
If thereafter the Holder of such Coupon shall surrender to any paying agent
outside the United States any such missing Coupon in respect of which a
deduction shall have been made from the redemption price, such Holder shall be
entitled to receive the amount so deducted. The surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee, if there be
furnished to them such security or indemnity as they may require to save each
of them and any paying agent harmless.
Any Debt Security that is to be redeemed only in part shall be
surrendered at the corporate trust office or such other office or agency of the
Company as is specified pursuant to Section 2.03 (in the case of Registered
Securities) and at the principal London office of the Trustee or such other
office or agency of the Company outside the United States as is specified
pursuant to Section 2.03 (in the case of Bearer Securities) with, if the
Company, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company, the
Registrar and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing, and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Debt Security without
service charge, a new Debt Security or Debt Securities of the same series, of
like tenor and form, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Debt Security so surrendered, and, in the case
of a Coupon Security, with appropriate Coupons attached; except that if a
Global Security is so surrendered, the Company shall execute, and the Trustee
shall authenticate and deliver to the Depositary for such Global Security,
without service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Security so
surrendered. In the case of a Debt Security providing appropriate space for
such notation, at the option of the Holder thereof, the Trustee, in lieu of
delivering a new Debt Security or Debt Securities as aforesaid, may make a
notation on such Debt Security of the payment of the redeemed portion thereof.
Section 3.05. MANDATORY AND OPTIONAL SINKING FUNDS. The minimum amount
of any sinking fund payment provided for by the terms of Debt Securities of any
series, resolution of the Board of Directors or a supplemental Indenture is
herein referred to as a "mandatory sinking fund
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payment", and any payment in excess of such minimum amount provided for by the
terms of Debt Securities of any series, resolution of the Board of Directors or
a supplemental Indenture is herein referred to as an "optional sinking fund
payment".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Debt Securities of a series in cash, the Company
may at its option (a) deliver to the Trustee Debt Securities of that series
(together with the unmatured Coupons, if any, appertaining thereto) theretofore
purchased or otherwise acquired by the Company or (b) receive credit for the
principal amount of Debt Securities of that series which have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, resolution or
supplemental Indenture; provided, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the redemption price specified in such Debt
Securities, resolution or supplemental Indenture for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund
payment shall be reduced accordingly.
Section 3.06. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not less
than 60 days prior to each sinking fund payment date for any series of Debt
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, any resolution or supplemental Indenture,
the portion thereof, if any, which is to be satisfied by payment of cash in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) and the portion thereof, if any, which is to
be satisfied by delivering and crediting Debt Securities of that series
pursuant to this Section 3.06 (which Debt Securities, if not previously
redeemed, will accompany such certificate) and whether the Company intends to
exercise its right to make any permitted optional sinking fund payment with
respect to such series. Such certificate shall also state that no Event of
Default has occurred and is continuing with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. Failure of the Company
to deliver such certificate (or to deliver the Debt Securities and Coupons, if
any, specified in this paragraph) shall not constitute a Default, but such
failure shall require that the sinking fund payment due on the next succeeding
sinking fund payment date for that series shall be paid entirely in cash and
shall be sufficient to redeem the principal amount of such Debt Securities
subject to a mandatory sinking fund payment without the option to deliver or
credit Debt Securities as provided in this Section 3.06 and without the right
to make any optional sinking fund payment, if any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made in
cash which shall equal or exceed $100,000 (or a lesser sum if the Company shall
so request) with respect to the Debt Securities of any particular series shall
be applied by the Trustee on the sinking fund payment date on which such
payment is made (or, if such payment is made before a sinking fund payment
date, on the sinking fund payment date following the date of such payment) to
the redemption of such Debt Securities at the Redemption Price specified in
such Debt Securities, resolution or supplemental Indenture for
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operation of the sinking fund together with any accrued interest to the date
fixed for redemption. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Debt Securities shall be added to the next
cash sinking fund payment received by the Trustee for such series and, together
with such payment, shall be applied in accordance with the provisions of this
Section 3.06. Any and all sinking fund moneys with respect to the Debt
Securities of any particular series held by the Trustee on the last sinking
fund payment date with respect to Debt Securities of such series and not held
for the payment or redemption of particular Debt Securities shall be applied by
the Trustee, together with other moneys, if necessary, to be deposited
sufficient for the purpose, to the payment of the principal of the Debt
Securities of that series at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed upon such
sinking fund payment date in the manner specified in the last paragraph of
Section 3.03 and the Company shall cause notice of the redemption thereof to be
given in the manner provided in Section 3.03 except that the notice of
redemption shall also state that the Debt Securities are being redeemed by
operation of the sinking fund. Such notice having been duly given, the
redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 3.04.
At least one business day before each sinking fund payment date, the
Company shall pay to the Trustee (or, if the Company is acting as its own
paying agent, the Company shall segregate and hold in trust) in cash a sum in
the Currency in which the Debt Securities of such series are denominated
(except as provided pursuant to Section 2.03) equal to any interest accrued to
the date fixed for redemption of Debt Securities or portions thereof to be
redeemed on such sinking fund payment date pursuant to this Section 3.06.
The Trustee shall not redeem any Debt Securities of a series with
sinking fund moneys or mail any notice of redemption of such Debt Securities by
operation of the sinking fund for such series during the continuance of a
Default in payment of interest on such Debt Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph) with respect to such Debt Securities, except that if the notice of
redemption of any such Debt Securities shall theretofore have been mailed in
accordance with the provisions hereof, the Trustee shall redeem such Debt
Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such Default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such Default or
Event of Default, be held as security for the payment of such Debt Securities;
provided, however, that in case such Event of Default or Default shall have
been cured or waived as provided herein, such moneys shall thereafter be
applied on the next sinking fund payment date for such Debt Securities on which
such moneys may be applied pursuant to the provisions of this Section 3.06.
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ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. PAYMENT OF PRINCIPAL OF, AND PREMIUM, IF ANY, AND
INTEREST ON, DEBT SECURITIES. The Company, for the benefit of each series of
Debt Securities, will duly and punctually pay or cause to be paid the principal
of, and premium, if any, and interest on, each of the Debt Securities and pay
any Coupons at the place, at the respective times and in the manner provided
herein, in the Debt Securities and in the Coupons. Each installment of interest
on the Debt Securities may at the Company's option be paid by mailing checks
for such interest payable to the Person entitled thereto pursuant to Section
2.07(a) to the address of such Person as it appears on the Debt Security
Register. Any interest due on Coupon Securities on or before the Stated
Maturity of the related Debt Security, other than additional interest, if any,
payable as provided in Section 4.06 in respect of principal of, or premium, if
any, on such a Debt Security, shall be payable only upon presentation and
surrender of the several Coupons for such interest installments as are
evidenced thereby as they severally mature.
Principal, premium and interest of Debt Securities of any series shall
be considered paid on the date due if on such date the Trustee or any paying
agent holds in accordance with this Indenture money sufficient to pay in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) all principal, premium and interest then due
and, in the case of Debt Securities subordinated pursuant to the terms of
Article XII, the Trustee or such paying agent, as the case may be, is not
prohibited from paying such money to the Holders 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 Debt Securities and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Section 4.02. MAINTENANCE OF OFFICES OR AGENCIES FOR REGISTRATION OF
TRANSFER, EXCHANGE AND PAYMENT OF DEBT SECURITIES. The Company will maintain in
each Place of Payment for any series of Debt Securities and Coupons, if any, an
office or agency where Debt Securities and Coupons of such series (but, except
as otherwise provided in Section 2.12, unless such Place of Payment is located
outside the United States, not Bearer Securities or Coupons) may be presented
or surrendered for payment, where Debt Securities of such series may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities and Coupons of such series and
this Indenture may be served. So long as any Bearer Securities of any series
remain outstanding, the Company will maintain for such purposes one or more
offices or agencies outside the United States in such city or cities specified
pursuant to Section 2.03 and, if any Bearer Securities are listed on a
securities exchange that requires an office or agency for the payment of
principal of, and premium, if any, or interest on, such Bearer Securities in a
location other than the location of an office or agency specified pursuant to
Section 2.03, the Company will maintain for such purposes an office or agency
in such location so long as any Bearer Securities are listed on such securities
exchange and such exchange so requires. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at
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any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
corporate trust office of the Trustee (in the case of Registered Securities)
and at the principal London office of the Trustee (in the case of Bearer
Securities), and the Company hereby appoints the Trustee as its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or
outside of such Place of Payment), and may from time to time rescind any such
designation; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
Section 4.03. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so
that there shall at all times be a Trustee hereunder with respect to each
series of Debt Securities.
Section 4.04. DUTIES OF PAYING AGENTS, ETC. (a) The Company shall
cause each paying agent, if any, other than the Trustee, to execute and deliver
to the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 4.04,
(i) that it will hold all sums held by it as such
agent for the payment of the principal of, and premium, if any, or
interest on, the Debt Securities of any series and the payment of any
related Coupons (whether such sums have been paid to it by the Company
or by any other obligor on the Debt Securities or Coupons of such
series) in trust for the benefit of the Holders of the Debt Securities
and Coupons of such series;
(ii) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the Debt Securities
or Coupons of such series) to make any payment of the principal of,
and premium, if any, or interest on, the Debt Securities of such
series or any payment on any related Coupons when the same shall be
due and payable; and
(iii) that it will at any time during the
continuance of an Event of Default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held by it as such
agent.
(b) If the Company shall act as its own paying agent, it
will, on or before each due date of the principal of, and premium, if any, or
interest on, the Debt Securities and Coupons, if any, of any series, set aside,
segregate and hold in trust for the benefit of the Holders of the Debt
Securities and Coupons of such series a sum sufficient to pay such principal,
premium, if any, or interest so becoming due. The Company will promptly notify
the Trustee of any failure by the Company to take such action or the failure by
any other obligor on such Debt Securities or Coupons
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to make any payment of the principal of, and premium, if any, or interest on,
such Debt Securities or Coupons when the same shall be due and payable.
(c) Anything in this Section 4.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it or any paying
agent, as required by this Section 4.04, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such paying agent.
(d) Whenever the Company shall have one or more paying agents
with respect to any series of Debt Securities and Coupons, it will, prior to
each due date of the principal of, and premium, if any, or interest on, any
Debt Securities of such series, deposit with any such paying agent a sum
sufficient to pay the principal, premium or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled thereto, and
(unless any such paying agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
(e) Anything in this Section 4.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this
Section 4.04 is subject to the provisions of Section 11.05.
Section 4.05. STATEMENT BY OFFICERS AS TO DEFAULT. The Company will
deliver to the Trustee, on or before a date not more than four months after the
end of each fiscal year of the Company (currently on a calendar year basis)
ending after the date hereof, an Officers' Certificate stating, as to each
officer signing such certificate, that (a) in the course of his performance of
his duties as an officer of the Company he would normally have knowledge of any
Default, (b) whether or not to the best of his knowledge any Default occurred
during such year and (c) if to the best of his knowledge the Company is in
Default, specifying all such Defaults and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the Trust Indenture Act.
Section 4.06. PAYMENT OF ADDITIONAL INTEREST. Unless otherwise
provided pursuant to Section 2.03, the provisions of this Section 4.06 shall be
applicable to Bearer Securities of any series.
The Company will, subject to the exceptions and limitations set forth
below, pay as additional interest to the Holder of any Bearer Security or
Coupon that is a United States Alien such amounts as may be necessary so that
every net payment on such Bearer Security or Coupon, after deduction or
withholding for or on account of any present or future tax, assessment or other
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided in such Bearer Security or Coupon to
be then due and payable. However, the Company will not be required to make any
such payment of additional interest for or on account of:
(a) any tax, assessment or other governmental charge that
would not have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor or beneficiary
of, or a Person holding a power over, such Holder, if such Holder is an estate
or a trust, or a member or shareholder of such Holder, if such Holder is a
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partnership or corporation) and the United States, including such Holder (or
such fiduciary, settlor, beneficiary, Person holding a power, member or
shareholder) being or having been a citizen or resident thereof or being or
having been engaged in trade or business or present therein or having or having
had a permanent establishment therein or (ii) such Holder's past or present
status for United States Federal income tax purposes as a personal holding
company, foreign personal holding company or private foundation or other
tax-exempt organization with respect to the United States or as a corporation
that accumulates earnings to avoid United States Federal income tax;
(b) any estate, inheritance, gift, sales, transfer or
personal property tax or any similar tax, assessment or other governmental
charge;
(c) any tax, assessment or other governmental charge that
would not have been imposed but for the presentation by the Holder of a Bearer
Security or Coupon for payment more than 15 days after the date on which such
payment became due and payable or on which payment thereof was duly provided
for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by deduction or withholding from a payment on a Bearer
Security or Coupon;
(e) any tax, assessment or other governmental charge that
would not have been imposed but for a failure to comply with applicable
certification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the United
States of the Holder or beneficial owner of a Bearer Security or Coupon if,
without regard to any tax treaty, such compliance is required by statute or
regulation of the United States as a precondition to relief or exemption from
such tax, assessment or other governmental charge; or
(f) any tax, assessment or other governmental charge imposed
on a Holder that actually or constructively owns ten percent or more of the
combined voting power of all classes of stock of the Company or that is a
controlled foreign corporation related to the Company through stock ownership;
nor shall additional interest be paid with respect to a payment on a Bearer
Security or Coupon to a Holder that is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner would not have been entitled to the additional interest had
such beneficiary, settlor, member or beneficial owner been the Holder of such
Bearer Security or Coupon.
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, or premium, if any, or interest on, any Debt
Security or payment with respect to any Coupon of any series, such mention
shall be deemed to include mention of the payment of additional interest
provided for in the terms of such Debt Securities and this Section 4.06 to the
extent that, in such context, additional interest is, was or would be payable
in respect thereof pursuant to the provisions of this Section 4.06 and express
mention of the payment of additional interest (if applicable) in any provisions
hereof shall not be construed as excluding additional interest in those
provisions hereof where such express mention is not made.
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If the payment of additional interest becomes required in respect of
the Debt Securities or Coupons of a series, at least ten days prior to the
first interest payment date with respect to which such additional interest will
be payable (or if the Debt Securities of that series will not bear interest
prior to its Stated Maturity, the first day on which a payment of principal,
and premium, if any, is made and on which such additional interest will be
payable), and at least ten days prior to each date of payment of principal, and
premium, if any, or interest if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Company
will furnish the Trustee and each paying agent with an Officers' Certificate
that shall specify by country the amount, if any, required to be withheld on
such payments to Holders of Debt Securities or Coupons that are United States
Aliens, and the Company will pay to the Trustee or such paying agent the
additional interest, if any, required by the terms of such Debt Securities and
this Section 4.06. The Company covenants to indemnify the Trustee and any
paying agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section 4.06.
Section 4.07. FURTHER INSTRUMENTS AND ACTS. The Company will, upon
request of the Trustee, execute and deliver such further instruments and do
such further acts as may reasonably be necessary or proper to carry out more
effectually the purposes of this Indenture.
Section 4.08. EXISTENCE. Subject to Article X, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise 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 that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 4.09. MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
Section 4.10. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or
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discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
Section 4.11. LIMITATION ON LIENS. The Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create or permit
to exist any Lien on any Restricted Property, whether owned on the Issue Date
or thereafter acquired, securing any obligation unless the Company
contemporaneously secures the Debt Securities equally and ratably with (or
prior to) such obligation. The preceding sentence shall not require the Company
to secure the Debt Securities if the Lien consists of the following:
(a) Permitted Liens; or
(b) Liens securing Indebtedness if, after giving pro forma
effect to the Incurrence of such Indebtedness (and the receipt and application
of the proceeds thereof) or the securing of outstanding Indebtedness, the sum
of (without duplication) (i) all Indebtedness of the Company and its
Subsidiaries secured by Liens on Restricted Property (other than Permitted
Liens) and (ii) all Attributable Indebtedness in respect of Sale/Leaseback
Transactions with respect to any Restricted Property, at the time of
determination does not exceed 10% of Consolidated Net Tangible Assets.
Section 4.12. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any of its Subsidiaries to, enter into any
Sale/Leaseback Transaction with respect to any Restricted Property unless (a)
the Company or such Subsidiary would be entitled to create a Lien on such
Restricted Property securing Indebtedness in an amount equal to the
Attributable Indebtedness with respect to such Sale/Leaseback Transaction
without securing the Debt Securities pursuant to Section 4.11 or (b) the
Company, within six months from the effective date of such Sale/Leaseback
Transaction, applies to the voluntary defeasance or retirement (excluding
retirements of Debt Securities and other Indebtedness ranking pari passu with
the Debt Securities as a result of conversions or pursuant to mandatory sinking
fund or mandatory prepayment provisions or by payment at maturity) of Debt
Securities or other Indebtedness ranking pari passu with the Debt Securities an
amount equal to the Attributable Indebtedness in respect of such Sale/Leaseback
Transaction.
ARTICLE V
HOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF HOLDERS; PRESERVATION OF INFORMATION. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee with
respect to the Registered Securities of each series:
(a) not more than 15 days after each record date with respect
to the payment of interest, if any, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Registered Holders as of
such record date, and
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(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and contents as of a date not more than 15 days prior to
the time such list is furnished;
provided, however, that so long as the Trustee shall be the Registrar, such
lists shall not be required to be furnished.
The Company shall also be required to furnish to the Trustee at all
such times set forth above all information in the possession or control of the
Company or any of its paying agents other than the Trustee as to the names and
addresses of the Bearer Holders of all series; provided, however, that the
Company shall have no obligation to investigate any matter relating to any
Bearer Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders (i)
contained in the most recent list furnished to it as provided in this Section
5.01 or (ii) received by it in the capacity of paying agent or Registrar (if so
acting) hereunder.
The Trustee may destroy any list furnished to it as provided in this
Section 5.01 upon receipt of a new list so furnished.
Section 5.02. COMMUNICATIONS TO HOLDERS. Holders may communicate
pursuant to Section 312(b) of the Trust Indenture Act with other Holders with
respect to their rights under this Indenture or the Debt Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of Section 312(c) of the Trust Indenture Act.
Section 5.03. REPORTS BY COMPANY. (a) The Company covenants and
agrees, and any obligor hereunder shall covenant and agree, to file with the
Trustee and the Holders (in the manner and to the extent provided in Section
5.04), within 15 days after the Company or such obligor, as the case may be, is
required to file the same with the Securities and Exchange Commission, copies
of the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as said Commission may from
time to time by rules and regulations prescribe) which the Company or such
obligor, as the case may be, may be required to file with said Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
or such obligor, as the case may be, is not required to file information,
documents or reports pursuant to either of such Sections, then to file with the
Trustee, the Holders (in the manner and to the extent provided in Section 5.04)
and said Commission, in accordance with rules and regulations prescribed from
time to time by said Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees, and any obligor
hereunder shall covenant and agree, to file with the Trustee, the Holders (in
the manner and to the extent provided in Section 5.04) and the Securities and
Exchange Commission, in accordance with the rules and regulations prescribed
from time to time by said Commission, such additional information,
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documents, and reports with respect to compliance by the Company or such
obligor, as the case may be, with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules and
regulations.
Section 5.04. REPORTS BY TRUSTEE. As promptly as practicable after
each January 1 beginning with the January 1 following the date of this
Indenture, and in any event prior to February 15 in each year, the Trustee
shall mail to each Holder a brief report dated as of that complies with Section
313(a) of the Trust Indenture Act. The Trustee also shall comply with Section
313(b) of the Trust Indenture Act.
Reports pursuant to this Section 5.04 shall be transmitted by mail:
(a) to all Registered Holders, as the names and addresses of
such Holders appear in the Debt Security Register;
(b) to such Bearer Holders of any series as have, within two
years preceding such transmission, filed their names and addresses with the
Trustee for such series for that purpose; and
(c) except in the cases of reports under Section 313(b)(2) of
the Trust Indenture Act, to each Holder of a Debt Security of any series whose
name and address appear in the information preserved at the time by the Trustee
in accordance with Section 5.02.
A copy of each report at the time of its mailing to Holders shall be
filed with the Securities and Exchange Commission and each stock exchange (if
any) on which the Debt Securities of any series are listed. The Company agrees
to notify promptly the Trustee whenever the Debt Securities of any series
become listed on any stock exchange and of any delisting thereof.
Section 5.05. RECORD DATES FOR ACTION BY HOLDERS. If the Company shall
solicit from the holders of Debt Securities of any series any action (including
the making of any demand or request, the giving of any direction, notice,
consent or waiver or the taking of any other action), the Company may, at its
option, by resolution of the Board of Directors, fix in advance a record date
for the determination of Holders of Debt Securities entitled to take such
action, but the Company shall have no obligation to do so. Any such record date
shall be fixed at the Company's discretion. If such a record date is fixed,
such action may be sought or given before or after the record date, but only
the Holders of Debt Securities of record at the close of business on such
record date shall be deemed to be Holders of Debt Securities for the purpose of
determining whether Holders of the requisite proportion of Debt Securities of
such series Outstanding have authorized or agreed or consented to such action,
and for that purpose the Debt Securities of such series Outstanding shall be
computed as of such record date.
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ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01. EVENTS OF DEFAULT. If any one or more of the following
shall have occurred and be continuing with respect to Debt Securities of any
series (each of the following, an "Event of Default"):
(a) default in the payment of any installment of interest
upon any Debt Securities of that series or any payment with respect to the
related Coupons, if any, as and when the same shall become due and payable,
whether or not such payment shall be prohibited by Article XII, if applicable,
and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if
any, on any Debt Securities of that series as and when the same shall become
due and payable, whether at maturity, upon redemption, by declaration, upon
required repurchase or otherwise, whether or not such payment shall be
prohibited by Article XII, if applicable; or
(c) default in the payment of any sinking fund payment with
respect to any Debt Securities of that series as and when the same shall become
due and payable; or
(d) failure on the part of the Company to comply with Article
X; or
(e) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Debt Securities of that series, in any resolution of the Board of Directors
authorizing the issuance of that series of Debt Securities, in this Indenture
with respect to such series or in any supplemental Indenture with respect to
such series (other than a covenant a default in the performance of which is
elsewhere in this Section specifically dealt with), continuing for a period of
60 days after the date on which written notice specifying such failure and
requiring the Company to remedy the same shall have been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Debt Securities of that series at the time Outstanding; or
(f) Indebtedness of the Company or any Subsidiary of the
Company is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof because of a default, the total amount of
such Indebtedness unpaid or accelerated exceeds $20,000,000 or its Dollar
Equivalent at the time and such default remains uncured or such acceleration is
not rescinded for 10 days after the date on which written notice specifying
such failure and requiring the Company to remedy the same shall have been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Debt Securities of that series at the time Outstanding; or
(g) the Company or any of its Significant Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code
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or any other Federal or State bankruptcy, insolvency or similar law, (ii)
consent to the institution of, or fail to controvert within the time and in the
manner prescribed by law, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for the Company or any such
Significant Subsidiary or for a substantial part of its property, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) admit in writing its inability or fail generally to pay its debts as they
become due, (vii) take corporate action for the purpose of effecting any of the
foregoing, or (viii) take any comparable action under any foreign laws relating
to insolvency; or
(h) the entry of an order or decree by a court having
competent jurisdiction in the premises for (i) relief in respect of the Company
or any of its Significant Subsidiaries or a substantial part of any of their
property under Title 11 of the United States Code or any other Federal or State
bankruptcy, insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any
such Significant Subsidiary or for a substantial part of any of their property
(except any decree or order appointing such official of any Significant
Subsidiary pursuant to a plan under which the assets and operations of such
Significant Subsidiary are transferred to or combined with another Subsidiary
or Subsidiaries of the Company or to the Company) or (iii) the winding-up or
liquidation of the Company or any such Significant Subsidiary (except any
decree or order approving or ordering the winding up or liquidation of the
affairs of a Significant Subsidiary pursuant to a plan under which the assets
and operations of such Significant Subsidiary are transferred to or combined
with another Subsidiary or Subsidiaries of the Company or to the Company); and
such order or decree shall continue unstayed and in effect for 60 consecutive
days; or any similar relief is granted under any foreign laws and the order or
decree stays in effect for 60 consecutive days; or
(i) any judgment or decree for the payment of money in excess
of $20,000,000 or its Dollar Equivalent at the time is entered against the
Company or any Subsidiary of the Company by a court or courts of competent
jurisdiction, which judgment is not covered by insurance, and is not discharged
and either (i) an enforcement proceeding has been commenced by any creditor
upon such judgment or decree or (ii) there is a period of 60 days following the
entry of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed and, in the case of (i) or
(ii), such default continues for 10 days after the date on which written notice
specifying such failure and requiring the Company to remedy the same shall have
been given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Debt Securities of that series at the time Outstanding;
or
(j) any other Event of Default provided with respect to Debt
Securities of that series;
then and in each and every case that an Event of Default described in clause
(a), (b), (c), (d), (e), (f), (i) or (j) with respect to Debt Securities of
that series at the time Outstanding occurs and is continuing, unless the
principal of and interest on all the Debt Securities of that series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate
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principal amount of the Debt Securities of that series then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
Holders), may declare the principal of (or, if the Debt Securities of that
series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of that series) and interest
on all the Debt Securities of that series to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Debt Securities or
Coupons appertaining thereto of that series contained to the contrary
notwithstanding. If an Event of Default described in clause (g) or (h) occurs,
then and in each and every such case, unless the principal of and interest on
all the Debt Securities shall have become due and payable, the principal of
(or, if any Debt Securities are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms thereto) and
interest on all the Debt Securities then Outstanding hereunder shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders, anything in this Indenture or in the
Debt Securities contained to the contrary notwithstanding.
The Holders of a majority in principal amount of the Debt Securities
of a particular series by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree already rendered 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. Upon any such rescission, the parties hereto shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the parties hereto shall continue as though no
such proceeding had been taken.
In case the Trustee or any Holder shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee or such Holder, then and in
every such case the parties hereto shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of
the parties hereto shall continue as though no such proceeding had been taken.
The foregoing Events of Default shall 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 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 which with the giving of notice and the lapse of time would become an
Event of Default under clause (c), (d), (e), (f), (i) or (j), its status and
what action the Company is taking or proposes to take with respect thereto.
Section 6.02. COLLECTION OF INDEBTEDNESS BY TRUSTEE, ETC. If an Event
of Default occurs and is continuing, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid or enforce the performance of any provision of the Debt Securities
of the affected series or this Indenture, and may prosecute any such action or
proceedings to judgment or
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final decree, and may enforce any such judgment or final decree against the
Company or any other obligor upon the Debt Securities, and the Coupons, if any,
appertaining thereto, of such series (and collect in the manner provided by law
out of the property of the Company or any other obligor upon the Debt
Securities and Coupons of such series wherever situated the moneys adjudged or
decreed to be payable).
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor upon the Debt Securities
and Coupons, if any, of any series under Title 11 of the United States Code or
any other Federal or State bankruptcy, insolvency or similar law, or in case a
receiver, trustee or other similar official shall have been appointed for its
property, or in case of any other similar judicial proceedings relative to the
Company or any other obligor upon the Debt Securities of any series, its
creditors or its property, the Trustee, irrespective of whether the principal
of Debt Securities and Coupons, if any, of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 6.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest (or, if the Debt Securities
of such series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and
unpaid in respect of the Debt Securities and Coupons of such series, and to
file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities Incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith) and of the
Holders thereof allowed in any such judicial proceedings relative to the
Company, or any other obligor upon the Debt Securities and Coupons of such
series, its creditors or its property, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of such Holders and of the Trustee
on their behalf, and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of such Holders to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to such Holders, to pay to the Trustee such amount as shall
be sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other reasonable expenses and liabilities
Incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith.
All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities and the Coupons, if any, appertaining thereto,
of any series, may be enforced by the Trustee without the possession of any
such Debt Securities or Coupons, or the production thereof in any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment (except for any amounts payable to
the Trustee pursuant to Section 7.06) shall be for the ratable benefit of the
Holders of all the Debt Securities or Coupons in respect of which such action
was taken.
In case of an Event of Default hereunder the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the
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Trustee shall deem most effectual to protect and enforce any of such rights,
either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture
or in aid of the exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this Indenture or
by law.
Section 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
or other property collected by the Trustee pursuant to Section 6.02 with
respect to Debt Securities and Coupons, if any, of any series shall be applied,
after giving effect to the provisions of Article XII, if applicable, in the
order following, at the date or dates fixed by the Trustee for the distribution
of such moneys or other property, upon presentation of the several Debt
Securities or Coupons of such series in respect of which moneys or other
property have been collected, and the notation thereon of the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant
to Section 7.06;
SECOND: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall not have
become due, to the payment of interest on the Debt Securities or Coupons of
such series in the order of the maturity of the installments of such interest,
with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the rate or Yield to
Maturity (in the case of Original Issue Discount Debt Securities) borne by the
Debt Securities or Coupons of such series, such payments to be made ratably to
the Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall have
become due, by declaration or otherwise, to the payment of the whole amount
then owing and unpaid upon the Debt Securities or Coupons of such series for
principal and premium, if any, and interest, with interest on the overdue
principal and premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the rate or
Yield to Maturity (in the case of Original Issue Discount Debt Securities)
borne by the Debt Securities or Coupons of such series; and, in case such
moneys shall be insufficient to pay in full the whole amount so due and unpaid
upon the Debt Securities and Coupons of such series, then to the payment of
such principal and premium, if any, and interest, without preference or
priority of principal and premium, if any, over interest, or of interest over
principal and premium, if any, or of any installment of interest over any other
installment of interest, or of any Debt Security or Coupon of such series over
any Debt Security or Coupon of such series, ratably to the aggregate of such
principal and premium, if any, and interest; and
FOURTH: The remainder, if any, shall be paid to the Company,
its successors or assigns, or to whomsoever may be lawfully entitled to receive
the same, or as a court of competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.03. At least 15 days before such record
date, the Company shall mail to each Holder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
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Section 6.04. LIMITATION ON SUITS BY HOLDERS. No Holder of any Debt
Security or Coupon of any series shall have any right by virtue or by availing
of any provision of this Indenture to institute any action or proceeding at law
or in equity or in bankruptcy or otherwise, upon or under or with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of an Event of Default with respect to Debt Securities
of that same series and of the continuance thereof and unless the Holders of
not less than 25% in aggregate principal amount of the Outstanding Debt
Securities of that series shall have made written request upon the Trustee to
institute such action or proceedings in respect of such Event of Default in its
own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be Incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.06; it being understood and intended, and being expressly
covenanted by the Holder of every Debt Security or Coupon with every other
Holder and the Trustee, that no one or more Holders shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any Holders, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all such Holders. For the protection and
enforcement of the provisions of this Section 6.04, each and every Holder and
the Trustee shall be entitled to such relief as can be given either at law or
in equity.
Notwithstanding any other provision in this Indenture, however, the
right of any Holder of any Debt Security or Coupon to receive payment of the
principal of, and premium, if any, and (subject to Section 2.12) interest on,
such Debt Security or Coupon, on or after the respective due dates expressed in
such Debt Security, and to institute 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 6.05. REMEDIES CUMULATIVE; DELAY OR OMISSION IN EXERCISE OF
RIGHTS NOT A WAIVER OF DEFAULT. All powers and remedies given by this Article
VI to the Trustee or to the Holders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the Holders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Holder to exercise any right or power accruing upon any Default
occurring and continuing as aforesaid, shall impair any such right or power, or
shall be construed to be a waiver of any such Default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article VI or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders.
Section 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF
DEBT SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULT. The Holders of a
majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding shall have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee, or
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exercising any trust or power conferred on the Trustee, with respect to the
Debt Securities of such series; provided, however, that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture, and that subject to the provisions of Section 7.01, the Trustee
shall have the right to decline to follow any such direction if the Trustee
being advised by counsel shall determine that the action so directed may not
lawfully be taken, or if the Trustee shall by a responsible officer or officers
determine that the action so directed would involve it in personal liability or
would be unjustly prejudicial to Holders of Debt Securities of such series not
taking part in such direction; and provided, further, however, that nothing in
this Indenture contained shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by such Holders. Prior to the acceleration of the maturity of the
Debt Securities of any series, as provided in Section 6.01, the Holders of a
majority in aggregate principal amount of the Debt Securities of that series at
the time Outstanding may on behalf of the Holders of all the Debt Securities
and any related Coupons of that series waive any past Default or Event of
Default and its consequences for that series specified in the terms thereof as
contemplated by Section 2.03, except (a) a Default in the payment of the
principal of, and premium, if any, or interest on, any of the Debt Securities
or in the payment of any related Coupon and (b) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder affected thereby. In case of any such waiver, such Default shall cease
to exist, any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, and the Company, the Trustee and the
Holders of the Debt Securities of that series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD SUCH NOTICE IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90
days after the occurrence of a Default known to it with respect to a series of
Debt Securities or Coupons, if any, give to the Holders thereof, in the manner
provided in Section 13.03, notice of all Defaults with respect to such series
known to the Trustee, unless such Defaults shall have been cured or waived
before the giving of such notice; provided, that, except in the case of Default
in the payment of the principal of, or premium, if any, or interest on, any of
the Debt Securities or Coupons of such series or in the making of any sinking
fund payment with respect to the Debt Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a committee of directors or responsible
officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders thereof.
Section 6.08. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN
SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this Indenture
agree, and each Holder of any Debt Security or Coupon by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
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, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit in the manner and to the extent provided in the Trust
Indenture Act, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 6.08 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Holder,
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or group of Holders, holding in the aggregate more than ten percent in
principal amount of the Outstanding Debt Securities of that series or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, or premium, if any, or interest on, any Debt Security or Coupon
on or after the due date for such payment expressed in such Debt Security or
Coupon.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. The Trustee, prior
to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case
an Event of Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of 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 man would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that:
(a) this subsection shall not be construed to limit the effect
of the first paragraph of this Section 7.01;
(b) prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after the curing or waiving of
all Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with
respect to Debt Securities and Coupons, if any, of any series shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties
and obligations with respect to such series as are specifically set
forth in this Indenture, and no implied covenants or obligations with
respect to such series shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture; but the Trustee
shall examine the evidence furnished to it pursuant to Section 5.03 to
determine whether or not such evidence conforms to the requirement of
this Indenture;
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(iii) the Trustee shall not be liable for an error
of judgment made in good faith by a responsible officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iv) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it with respect to Debt
Securities of any series in good faith in accordance with the
direction of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Debt Securities of that series
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to
Debt Securities of such series.
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any Personal financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided
in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Company Order (unless
other evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel, and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of Debt Securities or Coupons of any series
pursuant to the provisions of this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be Incurred therein or thereby;
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(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, approval or other paper or document, unless
requested in writing to do so by the Holders of a majority in aggregate
principal amount of the then Outstanding Debt Securities of a series affected
by such matter; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be Incurred by
it in the making of such investigation is not, in the opinion of the Trustee,
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so proceeding. The reasonable
expense of every such investigation shall be paid by the Company or, if paid by
the Trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed by it with due
care hereunder; and
(h) if any property other than cash shall at any time be
subject to a Lien in favor of the Holders, the Trustee, if and to the extent
authorized by a receivership or bankruptcy court of competent jurisdiction or
by the supplemental instrument subjecting such property to such lien, shall be
entitled to make advances for the purpose of preserving such property or of
discharging tax Liens or other prior Liens or encumbrances thereon.
Section 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN DEBT
SECURITIES. The recitals contained herein, in the Debt Securities (except the
Trustee's certificate of authentication) and in any Coupons shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities or Coupons,
if any, of any series, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Debt
Securities and perform its obligations hereunder, and that the statements made
by it or to be made by it in a Statement of Eligibility and Qualification on
Form T-1 supplied to the Company are true and accurate. The Trustee shall not
be accountable for the use or application by the Company of any of the Debt
Securities or of the proceeds thereof.
Section 7.04. TRUSTEE, PAYING AGENT OR REGISTRAR MAY OWN DEBT
SECURITIES. The Trustee or any paying agent or Registrar, in its individual or
any other capacity, may become the owner or pledgee of Debt Securities or
Coupons and subject to the provisions of the Trust Indenture Act relating to
conflicts of interest and preferential claims may otherwise deal with the
Company with the same rights it would have if it were not Trustee, paying agent
or Registrar.
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Section 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST. Subject
to the provisions of Section 11.05, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for
interest on any moneys received by it hereunder. So long as no Event of Default
shall have occurred and be continuing, all interest allowed on any such moneys
shall be paid from time to time to the Company upon a Company Order.
Section 7.06. COMPENSATION AND REIMBURSEMENT. The Company covenants
and agrees to pay in Dollars to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and, except as otherwise
expressly provided herein, the Company will pay or reimburse in Dollars the
Trustee upon its request for all reasonable expenses, disbursements and
advances Incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents, attorneys and counsel and of all
Persons not regularly in its employ) except any such expense, disbursement or
advances as may arise from its negligence or bad faith. The Company also
covenants to indemnify in Dollars the Trustee for, and to hold it harmless
against, any loss, liability or expense Incurred without negligence, wilful
misconduct or bad faith on the part of the Trustee, arising out of or in
connection with the acceptance or administration of this trust or trusts
hereunder, including the reasonable costs and expenses of defending itself
against any claim of liability in connection with the exercise or performance
of any of its powers or duties hereunder. The obligations of the Company under
this Section 7.06 to compensate and indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. The Company and the Holders agree that such
additional indebtedness shall be secured by a Lien prior to that of the Debt
Securities and Coupons, if any, upon all property and funds held or collected
by the Trustee, as such, except funds held in trust for the payment of
principal of, and premium, if any, or interest on, particular Debt Securities
and Coupons.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency, reorganization or other
similar law.
Section 7.07. RIGHT OF TRUSTEE TO RELY ON AN OFFICERS' CERTIFICATE
WHERE NO OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided
in Section 7.01, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under
the provisions of this Indenture upon the faith thereof.
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Section 7.08. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE. The Company
may, but need not, appoint a separate Trustee for any one or more series of
Debt Securities. The Trustee may resign with respect to one or more or all
series of Debt Securities at any time by giving notice to the Company. The
Holders of a majority in principal amount of the Debt Securities of a
particular series may remove the Trustee for such series and only such series
by so notifying the Trustee and may appoint a successor Trustee. The Company
shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) 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 Debt Securities of a particular series
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. No resignation or removal of the Trustee
and no appointment of a successor Trustee shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 7.08.
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 Holders of Debt Securities of each applicable series. 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 7.06.
If a successor Trustee does not take office within 60 days after the
retiring Trustee gives notice of resignation or is removed, the retiring
Trustee or the Holders of 25% in principal amount of the Debt Securities of any
applicable series may petition any court of competent jurisdiction for the
appointment of a successor Trustee for the Debt Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of Debt
Securities of any applicable series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee for the Debt Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.06 shall continue for
the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or successor
trustee with respect to the Debt Securities of one or more series, the Company,
any retiring Trustee and each successor or
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separate Trustee with respect to the Debt Securities of any applicable series
shall execute and deliver an Indenture supplemental hereto (i) which shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of any retiring Trustee with
respect to the Debt Securities of any series as to which any such retiring
Trustee is not retiring shall continue to be vested in such retiring Trustee
and (ii) that shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, it being understood that nothing
herein or in such supplemental Indenture shall constitute such Trustees
co-trustees of the same trust and that each such separate, retiring or
successor Trustee shall be Trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such
Trustee.
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 or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Debt Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Debt Securities so
authenticated; and in case at that time any of the Debt Securities shall not
have been authenticated, any successor to the Trustee may authenticate such
Debt Securities 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 Debt Securities or in this
Indenture provided that the certificate of the Trustee shall have.
Section 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of Section 310(a) of the Trust Indenture Act.
The Trustee shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition. No
obligor upon the Debt Securities or Coupons, if any, of a particular series or
Person directly or indirectly controlling, controlled by or under common
control with such obligor shall serve as Trustee upon the Debt Securities and
Coupons of such series. The Trustee shall comply with Section 310(b) of the
Trust Indenture Act; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the Trust Indenture Act this Indenture or 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 Section 310(b)(1) of the Trust
Indenture Act are met.
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act.
A Trustee who has resigned or been removed shall be subject to Section 311(a)
of the Trust Indenture Act to the extent indicated therein.
Section 7.12. COMPLIANCE WITH TAX LAWS. The Trustee hereby agrees to
comply with all U.S. Federal income tax information reporting and withholding
requirements applicable to it with
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respect to payments of premium (if any) and interest on the Debt Securities,
whether acting as Trustee, Security Registrar, paying agent or otherwise with
respect to the Debt Securities.
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01. EVIDENCE OF ACTION BY HOLDERS. Whenever in this
Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Debt Securities of any or all series may take
action (including the making of any demand or request, the giving of any
direction, notice, consent or waiver or the taking of any other action) the
fact that at the time of taking any such action the Holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Holders in Person or by
agent or proxy appointed in writing, (b) by the record of the Holders voting in
favor thereof at any meeting of Holders duly called and held in accordance with
the provisions of Section 5.02 or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
Section 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF DEBT
SECURITIES. Subject to the provisions of Sections 7.01, 7.02 and 13.11, proof
of the execution of any instrument by a Holder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee.
The ownership of Registered Securities of any series shall be proved
by the Debt Security Register or by a certificate of the Registrar for such
series.
The ownership of Bearer Securities shall be proved by production of
such Bearer Securities or by a certificate executed by any bank or trust
company, which certificate shall be dated and shall state on the date thereof a
Bearer Security bearing a specified identifying number or other mark was
deposited with or exhibited to the Person executing such certificate by the
Person named in such certificate, or by any other proof of possession
reasonably satisfactory to the Trustee. The holding by the Person named in any
such certificate of any Bearer Security specified therein shall be presumed to
continue for a period of one year unless at the time of determination of such
holding (a) another certificate bearing a later date issued in respect of the
same Bearer Security shall be produced, (b) such Bearer Security shall be
produced by some other Person, (c) such Bearer Security shall have been
registered on the Debt Security Register, if, pursuant to Section 2.03, such
Bearer Security can be so registered, or (d) such Bearer Security shall have
been canceled or paid.
The Trustee may require such additional proof of any matter referred
to in this Section 8.02 as it shall deem necessary.
Section 8.03. WHO MAY BE DEEMED OWNER OF DEBT SECURITIES. Prior to due
presentment for registration of transfer of any Registered Security, the
Company, the Trustee, any paying agent
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and any Registrar may deem and treat the Person in whose name any Registered
Security shall be registered upon the books of the Company as the absolute
owner of such Registered Security (whether or not such Registered Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and premium, if any, and (subject to Section 2.03) interest on such
Registered Security and for all other purposes, and neither the Company nor the
Trustee nor any paying agent nor any Registrar shall be affected by any notice
to the contrary; and all such payments so made to any such Holder for the time
being, or upon his order, shall be valid and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Registered Security.
The Company, the Trustee and any paying agent may deem and treat the
Holder of any Bearer Security or Coupon as the absolute owner of such Bearer
Security or Coupon (whether or not such Debt Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and premium,
if any, and (subject to Section 2.03) interest on such Bearer Security or
Coupon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent shall be affected by any notice to the contrary; and all such
payments so made to any such Holder for the time being, or upon his order,
shall be valid and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such Bearer
Security or Coupon.
None of the Company, the Trustee, any paying agent or the Registrar
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Section 8.04. INSTRUMENTS EXECUTED BY HOLDERS BIND FUTURE HOLDERS. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.01, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Debt Securities of any series specified in
this Indenture in connection with such action and subject to the following
paragraph, any Holder of a Debt Security which is shown by the evidence to be
included in the Debt Securities the Holders of which have consented to such
action may, by filing written notice with the Trustee at its corporate trust
office and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Debt Security. Except as aforesaid any such
action taken by the Holder of any Debt Security shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Debt Security
and all past, present and future Holders of Coupons, if any, appertaining
thereto, and of any Debt Security issued upon transfer thereof or in exchange
or substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon such Debt Security or such other Debt Securities or
Coupons. Any action taken by the Holders of the percentage in aggregate
principal amount of the Debt Securities of any series specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the Holders of all the Securities and Coupons of such
series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Registered Securities entitled to
give their consent or take any other
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action 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 Holders of Registered Securities 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 of Registered
Securities after such record date. No such consent shall be valid or effective
for more than 120 days after such record date unless the consent of the Holders
of the percentage in aggregate principal amount of the Debt Securities of such
series specified in this Indenture shall have been received within such 120-day
period.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURE MAY BE ENTERED
INTO WITHOUT CONSENT OF HOLDERS. The Company, when authorized by a resolution
of the Board of Directors, and the Trustee may from time to time and at any
time, without the consent of Holders, enter into an Indenture or Indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof) for one or more
of the following purposes:
(a) to evidence the succession pursuant to Article X of
another Person to the Company, or successive successions, and the assumption by
the Successor Company (as defined in Section 10.01) of the covenants,
agreements and obligations of the Company in this Indenture and in the Debt
Securities;
(b) to surrender any right or power herein conferred upon the
Company, to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of all
or any series of Debt Securities and the Coupons, if any, appertaining thereto
(and if such covenants are to be for the benefit of less than all series of
Debt Securities, stating that such covenants are expressly being included
solely for the benefit of such series) as the Board of Directors shall consider
to be for the protection of the Holders of such Debt Securities, and to make
the occurrence, or the occurrence and continuance, of a Default in any of such
additional covenants, restrictions, conditions or provisions a Default or an
Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture; provided, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
Indenture may provide for a particular period of grace after Default (which
period may be shorter or longer than that allowed in the case of other
Defaults) or may provide for an immediate enforcement upon such Default or may
limit the remedies available to the Trustee upon such Default or may limit the
right of the Holders of a majority in aggregate principal amount of any or all
series of Debt Securities to waive such default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein, in any supplemental Indenture or in any Debt
Securities of any series that may be defective or inconsistent with any other
provision contained herein, in any supplemental Indenture or in the
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Debt Securities of such series; to convey, transfer, assign, mortgage or pledge
any property to or with the Trustee, or to make such other provisions in regard
to matters or questions arising under this Indenture as shall not adversely
affect the interests of any Holders of Debt Securities of any series;
(d) to modify or amend this Indenture in such a manner as to
permit the qualification of this Indenture or any Indenture supplemental hereto
under the Trust Indenture Act as then in effect, except that nothing herein
contained shall permit or authorize the inclusion in any Indenture supplemental
hereto of the provisions referred to in Section 316(a)(2) of the Trust
Indenture Act;
(e) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registerable as to
principal, to change or eliminate any restrictions on the payment of principal
of, or premium, if any, on, Registered Securities or of principal of, or
premium, if any, or interest on, Bearer Securities or to permit Registered
Securities to be exchanged for Bearer Securities; provided, that any such
action shall not adversely affect the interests of the Holders of Debt
Securities or any Coupons of any series in any material respect or permit or
facilitate the issuance of Debt Securities of any series in uncertificated
form;
(f) to comply with Article X;
(g) in the case of any Debt Securities and Coupons, if any,
appertaining thereto subordinated pursuant to Article XII, to make any change
in Article XII that would limit or terminate the benefits available to any
holder of Senior Indebtedness (or Representatives therefor) under Article XII;
(h) to add Guarantees with respect to the Debt Securities or
to secure the Debt Securities;
(i) to make any change that does not adversely affect the
rights of any Holder;
(j) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Debt Securities; provided,
however, that any such addition, change or elimination not otherwise permitted
under this Section 9.01 shall (i) neither (A) apply to any Debt Security of any
series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Debt Security with respect to such provision or (ii) shall
become effective only when there is no such Debt Security Outstanding;
(k) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate Trustee with respect to the Debt
Securities of one or more series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; and
(l) to establish the form or terms of Debt Securities and
Coupons, if any, of any series as permitted by Sections 2.01 and 2.03.
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The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental Indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental Indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee without the consent
of the Holders of any of the Debt Securities or Coupons, if any, appertaining
thereto at the time Outstanding, notwithstanding any of the provisions of
Section 9.02.
In the case of Debt Securities or Coupons, if any, appertaining
thereto subordinated pursuant to Article XII, an amendment under this Section
9.01 may not make any change that adversely affects the rights under Article
XII 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 9.01 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected
thereby a notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section 9.01.
Section 9.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF
DEBT SECURITIES. Without notice to any Holder but with the consent (evidenced
as provided in Section 8.01) of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such supplemental Indenture, the Company, when authorized by a
resolution of the Board of Directors, and the Trustee may from time to time and
at any time enter into an Indenture or Indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of execution thereof) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental Indenture or of modifying in any manner the rights of
the Holders of the Debt Securities of such series; provided, that no such
supplemental Indenture, without the consent of the Holders of each Debt
Security so affected, shall (a) reduce the percentage in principal amount of
Debt Securities of any series whose Holders must consent to an amendment; (b)
reduce the rate of or extend the time for payment of interest on any Debt
Security or Coupon or reduce the amount of any payment to be made with respect
to any Coupon; (c) reduce the principal of or extend the Stated Maturity of any
Debt Security; (d) reduce the premium payable upon the redemption of any Debt
Security or change the time at which any Debt Security may or shall be redeemed
in accordance with Article III; (e) make any Debt Security or Coupon payable in
Currency other than that stated in the Debt Security; (f) in the case of any
Debt Security or Coupons, if any, appertaining thereto subordinated pursuant to
Article XII, make any change in Article XII that adversely affects the rights
of any Holder under Article XII; (g) release any security that may have been
granted in respect of the Debt Securities; (h) make any change in Section 6.06
or this Section 9.02; (i) change any obligation of the Company to pay
additional interest pursuant to Section 4.06; or (j) limit the obligation of
the
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Company to maintain a paying agency outside the United States for payment on
Bearer Securities as provided in Section 4.02 or limit the obligation of the
Company to redeem a Bearer Security as provided in Section 3.02(b).
A supplemental Indenture which changes or eliminates any covenant or
other provision of this Indenture which has been expressly included solely for
the benefit of one or more particular series of Debt Securities and Coupons, if
any, or which modifies the rights of the Holders of Debt Securities and Coupons
of such series with respect to such covenant or other provision, shall be
deemed not to affect the rights under this Indenture of the Holders of Debt
Securities and Coupons, if any, of any other series.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Directors authorizing the execution of any such supplemental
Indenture, and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental Indenture unless such supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion but shall not be obligated to
enter into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
In the case of any Debt Securities or Coupons, if any, appertaining
thereto, subordinated pursuant to Article XII, an amendment under this Section
9.02 may not make any change that adversely affects the rights under Article
XII 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 9.02 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected
thereby a notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section 9.02.
Section 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental Indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental Indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental Indenture complies with the provisions of
this Article IX.
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Section 9.04. DEBT SECURITIES MAY BEAR NOTATION OF CHANGES BY
SUPPLEMENTAL INDENTURES. Debt Securities and Coupons, if any, of any series
authenticated and delivered after the execution of any supplemental Indenture
pursuant to the provisions of this Article IX may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental Indenture. New Debt Securities and Coupons of
any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such
supplemental Indenture may be prepared and executed by the Company,
authenticated by the Trustee and delivered in exchange for the Debt Securities
and Coupons of such series then Outstanding. Failure to make the appropriate
notation or to issue a new Debt Security or Coupon of such series shall not
affect the validity of such amendment.
Section 9.05. 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 Debt Securities or Coupons, if any,
appertaining thereto 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
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 10.01. CONSOLIDATIONS AND MERGERS OF THE COMPANY. The Company
shall not consolidate with or merge with or into any Person, or convey,
transfer or lease all or substantially all its assets, unless: (a) either (i)
the Company shall be the continuing Person in the case of a merger or (ii) the
resulting, surviving or transferee Person if other than the Company (the
"Successor Company") shall be a corporation organized and existing under the
laws of the United States, any State thereof or the District of Columbia and
the Successor 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 Debt Securities and
Coupons, if any, according to their tenor, and this Indenture; (b) immediately
after giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Subsidiary of the Company
as a result of such transaction as having been Incurred by the Successor
Company or such Subsidiary at the time of such transaction), no Default or
Event of Default would occur or be continuing; (c) the Successor Company waives
any right to redeem any Bearer Security under circumstances in which the
Successor Company would be entitled to redeem such Bearer Security but the
Company would not have been so entitled to redeem if the consolidation, merger,
conveyance, transfer or lease had not occurred; and (d) 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.
Section 10.02. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of
any consolidation or merger, or conveyance or transfer of the assets of the
Company as an entirety or virtually as an
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entirety in accordance with Section 10.01, the Successor Company shall succeed
to and be substituted for the Company, with the same effect as if it had been
named herein as the party of the first part, and the predecessor corporation
shall be relieved of any further obligation under the Indenture and the
Securities. The Successor Company thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all the Debt
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of the Successor
Company, instead of the Company, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Debt Securities and Coupons, if any, appertaining thereto,
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Debt Securities and Coupons,
if any, appertaining thereto, which the Successor Company thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the Debt
Securities and Coupons, if any, appertaining thereto so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Debt
Securities and Coupons, if any, appertaining thereto theretofore or thereafter
issued in accordance with the terms of this Indenture as though all such Debt
Securities and Coupons had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the Debt
Securities and Coupons, if any, appertaining thereto thereafter to be issued as
may be appropriate.
ARTICLE XI
SATISFACTION AND DISCHARGE OF
INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01. APPLICABILITY OF ARTICLE. If, pursuant to Section 2.03,
provision is made for the defeasance of Debt Securities of a series and if the
Debt Securities of such series are Registered Securities and denominated and
payable only in Dollars (except as provided pursuant to Section 2.03), then the
provisions of this Article XI relating to defeasance of Debt Securities shall
be applicable except as otherwise specified pursuant to Section 2.03 for Debt
Securities of such series. Defeasance provisions, if any, for Debt Securities
denominated in a Foreign Currency or for Bearer Securities may be specified
pursuant to Section 2.03.
Section 11.02. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancelation all Debt Securities of any series theretofore authenticated and
delivered (other than (A) Coupons appertaining to Bearer Securities of such
series called for redemption and maturing after the relevant redemption date,
surrender of which has been waived, (B) any Debt Securities and Coupons of such
series which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.09 and (C) Debt Securities and
Coupons for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company as provided in Section 11.05) or (ii) all Debt
Securities and the Coupons, if any, of such series not theretofore delivered to
the Trustee for cancelation shall have become due and payable, or are by their
terms to become due and payable within one year or are to
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be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company shall deposit
with the Trustee as trust funds the entire amount in the Currency in which such
Debt Securities are denominated (except as otherwise provided pursuant to
Section 2.03) sufficient to pay at maturity or upon redemption all Debt
Securities of such series not theretofore delivered to the Trustee for
cancelation, including principal and premium, if any, and interest due or to
become due on such date of maturity or redemption date, as the case may be, and
if in either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of such Debt Securities herein expressly provided for and rights to
receive payments of principal of, and premium, if any, and interest on, such
Debt Securities and any right to receive additional interest as provided in
Section 4.06) with respect to the Debt Securities of such series, and the
Trustee, on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging this
Indenture.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the
Company at any time may terminate, with respect to Debt Securities of a
particular series, (i) all its obligations under the Debt Securities of such
series and this Indenture with respect to the Debt Securities of such series
("legal defeasance option") or (ii) its obligations with respect to the Debt
Securities of such series under clause (c) of Section 10.01 and the related
operation of Section 6.01(d) and the operation of Sections 6.01(e), (f), (i)
and (j) ("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
Debt Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Debt Securities of the defeased series may not be accelerated
because of an Event of Default specified in Sections 6.01(d), (e), (f), (i) and
(j) (except to the extent covenants or agreements referenced in such Sections
remain applicable).
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 2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 7.10, 11.05, 11.06
and 11.07 shall survive until the Debt Securities of the defeased series have
been paid in full. Thereafter, the Company's obligations in Sections 7.06,
11.05 and 11.06 shall survive.
Section 11.03. CONDITIONS OF DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option with respect to Debt
Securities of a particular series only if:
(a) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment of principal of,
and premium, if any, and interest on, the Debt Securities of such series to
maturity or redemption, as the case may be;
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(b) 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 the principal, premium and interest when due on all the Debt
Securities of such series to maturity or redemption, as the case may be;
(c) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(g) or (h) with respect to
the Company occurs which is continuing at the end of the period;
(d) no Default has occurred and is continuing on the date of
such deposit and after giving effect thereto;
(e) the deposit does not constitute a default under any other
agreement binding on the Company and, if the Debt Securities of such series are
subordinated pursuant to Article XII, is not prohibited by Article XII;
(f) 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;
(g) in the event 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 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 of the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of Debt Securities of such
series will not recognize income, gain or loss for Federal income tax purposes
as a result of such defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(h) in the event of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of Debt Securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(i) 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 Debt Securities of such series
as contemplated by this Article XI have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Debt Securities of such
series at a future date in accordance with Article III.
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Section 11.04. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article XI. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Debt Securities and Coupons, if any, of the defeased series. In the event
the Debt Securities and Coupons, if any, of the defeased series are
subordinated pursuant to Article XII, money and securities so held in trust are
not subject to Article XII.
Section 11.05. REPAYMENT TO COMPANY. The Trustee and any 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 any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors.
Section 11.06. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company
shall pay and shall indemnify the Trustee and the Holders against any tax, fee
or other change imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
Section 11.07. REINSTATEMENT. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XI until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article XI.
ARTICLE XII
SUBORDINATION OF DEBT SECURITIES
Section 12.01. APPLICABILITY OF ARTICLE; AGREEMENT TO SUBORDINATE. The
provisions of this Article XII shall be applicable to the Debt Securities of
any series (Debt Securities of such series referred to in this Article XII as
"Subordinated Debt Securities") designated, pursuant to Section 2.03, as
subordinated to Senior Indebtedness. Each Holder by accepting a Subordinated
Debt Security agrees that the Indebtedness evidenced by such Subordinated Debt
Security is subordinated in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment of all Senior Indebtedness
and that the subordination is for the benefit of and enforceable by the holders
of Senior Indebtedness. All provisions of this Article XII shall be subject to
Section 12.12.
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Section 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets 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:
(a) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash of the Senior Indebtedness (including interest
(if any), accruing on or after the commencement of a proceeding in bankruptcy,
whether or not allowed as a claim against the Company in such bankruptcy
proceeding) before Holders of Subordinated Debt Securities shall be entitled to
receive any payment of principal of, or premium, if any, or interest on, the
Subordinated Debt Securities; and
(b) until the Senior Indebtedness is paid in full, any
distribution to which Holders of Subordinated Debt Securities would be entitled
but for this Article XII shall be made to holders of Senior Indebtedness as
their interests may appear, except that such Holders may receive shares of
stock and any debt securities that are subordinated to Senior Indebtedness to
at least the same extent as the Subordinated Debt Securities.
Section 12.03. DEFAULT ON SENIOR INDEBTEDNESS. The Company may not pay
the principal of, or premium, if any, or interest on, the Subordinated Debt
Securities or make any deposit pursuant to Article XI and may not repurchase,
redeem or otherwise retire (except, in the case of Subordinated Debt Securities
that provide for a mandatory sinking fund pursuant to Section 3.05, by the
delivery of Subordinated Debt Securities by the Company to the Trustee pursuant
to the first paragraph of Section 3.06) any Debt Securities (collectively, "pay
the Subordinated Debt Securities") if (a) any principal, premium or interest in
respect of Senior Indebtedness is not paid within any applicable grace period
(including at maturity) or (b) any other default on Senior Indebtedness occurs
and the maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (i) the default has been cured or waived and
any such acceleration has been rescinded or (ii) such Senior Indebtedness has
been paid in full in cash; provided, however, that the Company may pay the
Subordinated Debt Securities without regard to the foregoing if the Company and
the Trustee receive written notice approving such payment from the
Representative of each issue of Designated Senior Indebtedness. During the
continuance of any default (other than a default described in clause (a) or (b)
of the preceding sentence) with respect to any 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
Subordinated Debt Securities for a period (a "Payment Blockage Period")
commencing upon the receipt by the Company and the Trustee of written notice of
such default from the Representative of any Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period (a "Blockage
Notice") and ending 179 days thereafter (or earlier if such Payment Blockage
Period is terminated (A) by written notice to the Trustee and the Company from
the Person or Persons who gave such Blockage Notice, (B) by repayment in full
in cash of such Designated Senior Indebtedness or (C) because the default
giving rise to such Blockage Notice is no longer continuing). Notwithstanding
the provisions described in the immediately preceding sentence (but subject to
the provisions contained in the first sentence of this Section 12.03), 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
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Subordinated Debt Securities after 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 any number of issues of
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), 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 12.03, 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 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 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.
Section 12.04. ACCELERATION OF PAYMENT OF DEBT SECURITIES. If payment
of the Subordinated Debt Securities 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.
Section 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to Holders of Subordinated Debt Securities that because of this Article
XII should not have been made to them, the Holders who receive such
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
Section 12.06. SUBROGATION. After all Senior Indebtedness is paid in
full and until the Subordinated Debt Securities are paid in full, Holders
thereof shall be subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness. A distribution made
under this Article XII to holders of Senior Indebtedness which otherwise would
have been made to Holders of Subordinated Debt Securities is not, as between
the Company and such Holders, a payment by the Company on Senior Indebtedness.
Section 12.07. RELATIVE RIGHTS. This Article XII defines the relative
rights of Holders of Subordinated Debt Securities and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders of either
Subordinated Debt Securities or Debt Securities, the obligation of the Company,
which is absolute and unconditional, to pay principal of, and premium, if any,
and interest on, the Subordinated Debt Securities and the Debt Securities in
accordance with their terms; or
(b) prevent the Trustee or any Holder of either Subordinated
Debt Securities or Debt Securities from exercising its available remedies upon
a Default, subject to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Holders of Subordinated Debt Securities.
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Section 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Subordinated Debt Securities shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture.
Section 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 12.03, the Trustee or any paying agent may continue to make payments on
Subordinated Debt Securities 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
responsible officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article XII. The Company, the Registrar,
any paying agent, a Representative or a holder of Senior Indebtedness may give
the notice; provided, however, that, if an issue of Senior Indebtedness has a
Representative, only the Representative 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 Trustee. The
Registrar and any paying agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article XII with respect
to any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness; and nothing in Article VII
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article XII shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.06.
Section 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
Section 12.11. ARTICLE XII NOT TO PREVENT DEFAULTS OR LIMIT RIGHT TO
ACCELERATE. The failure to make a payment pursuant to the Debt Securities by
reason of any provision in this Article XII shall not be construed as
preventing the occurrence of a Default. Nothing in this Article XII shall have
any effect on the right of the Holders or the Trustee to accelerate the
maturity of either the Subordinated Debt Securities or the Debt Securities, as
the case may be.
Section 12.12. 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 XI by the Trustee for the
payment of principal of, and premium, if any, and interest on, the Subordinated
Debt Securities or the Debt Securities shall not be subordinated to the prior
payment of any Senior Indebtedness or subject to the restrictions set forth in
this Article XII, and none of the Holders thereof 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.
Section 12.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Holders shall be
entitled to rely (a) 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, (b) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to such
Holders or (c) upon the Representatives for the
74
<PAGE> 81
holders of Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
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 XII. 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 to participate in
any payment or distribution pursuant to this Article XII, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of 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 XII,
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 XII.
Section 12.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder by
accepting a Subordinated Debt Security 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 Holders of Subordinated
Debt Securities and the holders of Senior Indebtedness as provided in this
Article XII and appoints the Trustee as attorney-in-fact for any and all such
purposes.
Section 12.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall mistakenly pay over or distribute to Holders of Subordinated Debt
Securities or the Company or any other Person, money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article XII
or otherwise.
Section 12.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Holder by accepting a Subordinated Debt Security
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, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Subordinated Debt Securities, 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.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company or the Trustee shall bind its
successors and assigns, whether so expressed or not.
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Section 13.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR
COMPANY VALID. Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any Successor Company.
Section 13.03. REQUIRED NOTICES OR DEMANDS. Except as otherwise
expressly provided in this Indenture, any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders to or on the Company may be given or served by
being deposited postage prepaid in a post office letter box in the United
States addressed (until another address is filed by the Company with the
Trustee) as follows: Pioneer Natural Resources Company, 1400 Williams Square
West, 5205 North O'Connor Boulevard, Irving, Texas 75039, Attention: Chief
Financial Officer. Except as otherwise expressly provided in this Indenture,
any notice, direction, request or demand by the Company or by any Holder to or
upon the Trustee may be given or made, for all purposes, by being deposited
postage prepaid in a post office letter box in the United States addressed to
the corporate trust office of the Trustee initially at [TRUSTEE ADDRESS]. The
Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice required or permitted to a Registered Holder by the Company
or the Trustee pursuant to the provisions of this Indenture shall be deemed to
be properly mailed by being deposited postage prepaid in a post office letter
box in the United States addressed to such Holder at the address of such Holder
as shown on the Debt Security Register. Any report pursuant to Section 313 of
the Trust Indenture Act shall be transmitted in compliance with subsection (c)
therein.
Any notice required or permitted to a Bearer Holder by the Company or
the Trustee pursuant to this Indenture shall be deemed to be properly given if
published on two separate business days in an Authorized Newspaper or
Newspapers in such Place or Places of Payment specified pursuant to Section
2.03, the first such publication to be not earlier than the earliest date and
not later than two business days prior to the latest date prescribed for the
giving of such notice. Notwithstanding the foregoing, any notice to Holders of
Floating Rate Debt Securities regarding the determination of a periodic rate of
interest, if such notice is required pursuant to Section 2.03, shall be
sufficiently given if given in the manner specified pursuant to Section 2.03.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall
constitute sufficient notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspaper
or by reason of any other cause it shall be impracticable to give notice by
publication, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Failure to mail a notice or communication to a Holder or any defect in
it or any defect in any notice by publication as to a Holder shall not affect
the sufficiency of such notice with respect to other Holders. If a notice or
communication is mailed or published in the manner provided above, it is
conclusively presumed duly given.
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Section 13.04. INDENTURE AND DEBT SECURITIES TO BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture, each Debt
Security and each Coupon shall be deemed to be New York contracts, and for all
purposes shall be construed in accordance with the laws of said State (without
reference to principles of conflicts of law).
Section 13.05. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE
FURNISHED UPON APPLICATION OR DEMAND BY THE COMPANY. Upon any application or
demand by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
Person making such certificate or opinion has read such covenant or condition,
(b) 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, (c) a statement that, in the opinion of such
Person, 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 (d) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.
Section 13.06. PAYMENTS DUE ON LEGAL HOLIDAYS. In any case where the
date of maturity of interest on or principal of and premium, if any, on the
Debt Securities of a series or the date fixed for redemption or repayment of
any Debt Security or the making of any sinking fund payment shall not be a
business day at any Place of Payment for the Debt Securities of such series,
then payment of interest or principal and premium, if any, or the making of
such sinking fund payment need not be made on such date at such Place of
Payment, but may be made on the next succeeding business day at such Place of
Payment with the same force and effect as if made on the date of maturity or
the date fixed for redemption, and no interest shall accrue for the period
after such date. If a record date is not a business day, the record date shall
not be affected.
Section 13.07. PROVISIONS REQUIRED BY TRUST INDENTURE ACT TO CONTROL.
If and to the extent that any provision of this Indenture limits, qualifies or
conflicts with another provision included in this Indenture which is required
to be included in this Indenture by any of Sections 310 to 318, inclusive, of
the Trust Indenture Act, such required provision shall control.
Section 13.08. COMPUTATION OF INTEREST ON DEBT SECURITIES. Interest,
if any, on the Debt Securities shall be computed on the basis of a 360-day year
of twelve 30-day months, except as may otherwise be provided pursuant to
Section 2.03.
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Section 13.09. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and any paying agent may make reasonable rules for their functions.
Section 13.10. NO RECOURSE AGAINST OTHERS. An incorporator or any
past, present or future director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Debt Securities, the Coupons or this Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Debt Security or Coupon, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for
the issue of the Debt Securities and Coupons.
Section 13.11. SEVERABILITY. In case any provision in this Indenture,
the Debt Securities or the Coupons shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 13.12. EFFECT OF HEADINGS. The article and section headings
herein and in the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 13.13. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
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The Trustee hereby accepts the trusts in this Indenture upon the terms
and conditions herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed as of the date first written above.
PIONEER NATURAL RESOURCES COMPANY,
By:
---------------------------------------------
Name: Scott D. Sheffield
Title: President and Chief Executive Officer
[TRUSTEE],
By:
---------------------------------------------
Name: [SIGNATORY NAME]
Title: [SIGNATORY TITLE]
79
<PAGE> 1
EXHIBIT 5.1
DRAFT OF DECEMBER 11, 1997
(214) 220-7700 (214) 220-7716
Pioneer Natural Resources Company
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75309
Re: Pioneer Natural Resources Company
Registration Statement on Form S-3 (No. 333- )
Debt Securities
Preferred Stock, par value $.01 per share
Depositary Shares
Common Stock, par value $.01 per share
Warrants
Ladies and Gentlemen:
We have acted as counsel for Pioneer Natural Resources Company, a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933 (the "Securities Act"), on a Registration Statement
on Form S-3 (No. 333- ) (the "Registration Statement") of the offer and sale
from time to time pursuant to Rule 415 under the Securities Act of the
following securities for an aggregate initial offering price not to exceed
$1,400,000,000: (i) debt securities of the Company ("Debt Securities"); (ii)
shares of preferred stock, par value $.01 per share, of the Company ("Preferred
Stock"); (iii) depositary shares representing fractional interests in Preferred
Stock ("Depositary Shares"); (iv) shares of common stock, par value $.01 per
share, of the Company ("Common Stock"); and (v) warrants to purchase Debt
Securities, Preferred Stock or Common Stock (the "Warrants", and, together with
the Debt Securities, Preferred Stock, the Depositary Shares and Common Stock,
the "Securities").
For purposes of rendering the opinions contained in this letter, we
have reviewed those agreements, records, documents, and matters of law as we
have deemed relevant in order to render the opinions set forth herein,
including but not limited to (a) the Composite Certificate of Incorporation and
the Bylaws of the Company, (b) resolutions adopted by the Board of Directors of
the Company, and (c) the Indenture in the form of Exhibit 4.2 to the
Registration Statement to be
<PAGE> 2
Pioneer Natural Resources Company
Draft of December 11, 1997
Page 2
executed by the Company and the trustee (the "Indenture"), pursuant to which
Debt Securities may be issued.
As to certain questions of fact material to our opinions, we have
relied upon certificates from officers of the Company and other persons, as
appropriate, and upon certificates of public officials.
Based upon and subject to the foregoing and subject further to the
assumptions, exceptions and qualifications hereinafter stated, we express the
following opinions:
1. With respect to Debt Securities to be issued under the Indenture,
when (A) the Indenture has been duly authorized and validly executed and
delivered by the Company to the trustee, (B) the Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended, (C) the Board has
taken all necessary corporate action to approve the issuance and terms of such
Debt Securities, the terms of the offering thereof and related matters, and (D)
such Debt Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Indenture and the applicable
definitive purchase, underwriting or similar agreement approved by the Board
upon payment of the consideration therefor provided for therein, such Debt
Securities will be legally issued and will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as such enforcement is subject to any applicable
bankruptcy, insolvency, reorganization or other law relating to or affecting
creditors' rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
2. With respect to shares of Preferred Stock, when both (A) the Board
has taken all necessary corporate action to approve the issuance and terms of
the shares of Preferred Stock, the terms of the offering thereof, and related
matters, including the adoption of a Certificate of Designation relating to
such Preferred Stock (a "Certificate") and the filing of the Certificate with
the Secretary of State of the State of Delaware, and (B) certificates
representing the shares of Preferred Stock have been duly executed,
countersigned, registered and delivered either (i) in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor (not less than the par
value of the Preferred Stock) provided for therein or (ii) upon conversion or
exercise of any other Security, in accordance with the terms of such Security
or the instrument governing such Security providing for such conversion or
exercise as approved by the Board, for the consideration approved by the Board
(not less than the par value of the Preferred Stock), then the shares of
Preferred Stock will be legally issued, fully paid and non assessable.
3. With respect to Depositary Shares, when (A) the Board has taken all
necessary corporate action to approve the issuance and terms of the Depositary
Shares, the terms of the offering thereof, and related matters, including the
adoption of a Certificate relating to the Preferred Stock
<PAGE> 3
Pioneer Natural Resources Company
Draft of December 11, 1997
Page 3
underlying such Depositary Shares and the filing of the Certificate with the
Secretary of State of the State of Delaware, (B) the Depositary Agreement or
Agreements relating to the Depositary Shares and the related Depositary
Receipts have been duly authorized and validly executed and delivered by the
Company and the Depositary appointed by the Company, (C) the shares of
Preferred Stock underlying such Depositary Shares have been deposited with a
bank or trust company (which meets the requirements for the Depositary set
forth in the Registration Statement) under the applicable Depositary
Agreements, and (D) the Depositary Receipts representing the Depositary Shares
have been duly executed, countersigned, registered and delivered in accordance
with the appropriate Depositary Agreement and the applicable definitive
purchase, underwriting or similar agreements approved by the Board upon payment
of the consideration therefore provided for therein, the Depositary Shares will
be legally issued.
4. With respect to shares of Common Stock, when both (A) the Board of
Directors of the Company or, to the extent permitted by Section 141(c) of the
General Corporation Law of the State of Delaware, a duly constituted and acting
committee thereof (such Board of Directors or committee being hereinafter
referred to as the "Board") has taken all necessary corporate action to approve
the issuance of and the terms of the offering of the shares of Common Stock and
related matters and (B) certificates representing the shares of Common Stock
have been duly executed, countersigned, registered and delivered either (i) in
accordance with the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor (not
less than the par value of the Common Stock) provided for therein or (ii) upon
conversion or exercise of any other Security, in accordance with the terms of
such Security or the instrument governing such Security providing for such
conversion or exercise as approved by the Board, for the consideration approved
by the Board (not less than the par value of the Common Stock), then the shares
of Common Stock will be legally issued, fully paid and nonassessable.
5. With respect to the Warrants, when (A) the Board has taken all
necessary corporate action to approve the creation of and the issuance and
terms of the Warrants, the terms of the offering thereof, and related matters,
(B) the warrant agreement or agreements relating to the Warrants have been duly
authorized and validly executed and delivered by the Company and the warrant
agent appointed by the Company, and (C) the Warrants or certificates
representing the Warrants have been duly executed, countersigned, registered
and delivered in accordance with the appropriate warrant agreement or
agreements and the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor
provided for therein, the Warrants will be legally issued.
<PAGE> 4
Pioneer Natural Resources Company
Draft of December 11, 1997
Page 4
The opinions expressed above are subject in all respects to the
following assumptions, exceptions and qualifications:
a. We have assumed (i) all information contained in all documents
reviewed by us is true and correct, (ii) the genuineness of all signatures on
all documents reviewed by us, (iii) the authenticity and completeness of all
documents submitted to us as originals, (iv) the conformity to authentic
originals of all documents submitted to us as certified or photostatic copies,
(v) each natural person signing any document reviewed by us had the legal
capacity to do so, (vi) each person signing in a representative capacity any
document reviewed by us had authority to sign in such capacity, and (vii) the
laws of any jurisdiction other than Texas that govern any of the documents
reviewed by us or referenced in this opinion letter (other than the Company's
Composite Certificate of Incorporation and Bylaws) do not modify the terms that
appear in any such document.
b. We have assumed that (i) the Registration Statement and any
amendments thereto (including post-effective amendments) will have become
effective and comply with all applicable laws; (ii) the Registration Statement
will be effective and will comply with all applicable laws at the time the
Securities are offered or issued as contemplated by the Registration Statement
(if such offering or issuance requires the delivery of a prospectus under the
Securities Act or pursuant to any other law); (iii) a Prospectus Supplement
will have been prepared and filed with the Securities and Exchange Commission
describing the Securities offered thereby and will comply with all applicable
laws; (iv) all Securities will be issued and sold in compliance with applicable
federal and state securities laws and in the manner stated in the Registration
Statement and the appropriate Prospectus Supplement; (v) a definitive purchase,
underwriting or similar agreement with respect to any Securities offered or
issued will have been duly authorized and validly executed and delivered by the
Company and the other parties thereto; and (vi) any Securities issuable upon
conversion, exchange or exercise of any Security being offered or issued will
be duly authorized, created and, if appropriate, reserved for issuance upon
such conversion, exchange or exercise.
c. In rendering the opinion in paragraph 1, we have assumed that the
trustee is or, at the time the Indenture is signed, will be qualified to act as
trustee under the Indenture and that the trustee has or will have duly executed
and delivered the Indenture.
d. We express no opinion with respect to (i) the enforceability of
provisions in the Indenture or any other agreement or instrument with respect
to delay or omission of enforcement of rights or remedies, or waivers of
defenses, or waivers of benefits of stay, extension, moratorium, redemption,
statutes of limitation, or other nonwaivable benefits bestowed by operation of
law; or (ii) the enforceability of indemnification provisions to the extent
they purport to relate to liabilities resulting from or based upon negligence
or any violation of federal or state securities or blue sky laws.
<PAGE> 5
Pioneer Natural Resources Company
Draft of December 11, 1997
Page 5
e. We express no opinion as to the requirements of or compliance with
federal or state securities laws or regulations.
f. We note that the Indenture by its terms purports to be governed by
the laws of the State of New York and that the terms of the Warrants, when
determined, may be governed by the laws of a jurisdiction other than the State
of Texas or other than the General Corporation Law of the State of Delaware.
While we express no opinion with respect to the laws of the State of New York
or such other jurisdictions in rendering these opinions, we have assumed that
the internal laws of the State of New York and such other jurisdictions are the
same as the internal laws of the State of Texas. We have not conducted any
analysis to determine whether that assumption is correct.
g. The opinions expressed in this letter are limited to the laws of
the State of Texas, the General Corporation Law of the State of Delaware, and
the federal laws of the United States of America. You should be aware that we
are not admitted to the practice of law in the State of Delaware.
We consent to the filing of this opinion of counsel as Exhibit 5 to
the Registration Statement. We also consent to the reference to this firm under
the heading "Legal Opinions" in the Prospectus forming a part of the
Registration Statement. In giving this consent, we do not admit that this firm
is in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
We disclaim any duty to advise you regarding any changes in, or
otherwise communicate with you with respect to, the matters addressed herein.
Very truly yours,
<PAGE> 1
EXHIBIT 10.48
STOCK ACQUISITION LOAN AGREEMENT
This Stock Acquisition Loan Agreement ("Agreement") is made and entered in
to as of June 15, 1995, between Parker & Parsley Petroleum Company, a Delaware
corporation (the "Company") and Scott D. Sheffield (the "Executive").
RECITALS:
A. WHEREAS, the Board of Directors of Company (the "Board") deem it to be
in the best interest of the Company for the officers of the Company and its
Subsidiaries to accumulate and maintain significant stock ownership in the
Company;
B. WHEREAS, Executive is an officer of Company or one of its Subsidiaries
and an employee of a Subsidiary of Company, and is desirous of accumulating
ownership of additional shares of the Company's common stock ("Shares"); and
C. WHEREAS, the Board desires to provide Executive the means to acquire
Company's common stock;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:
1. Loan. In consideration of Executive's continued employment with any
Subsidiary of Company and other value received, Company agrees, from and after
the date hereof until the earlier to occur of (a) Executive's termination of
employment with any Subsidiary of the Company, or (b) June 22, 1995, to make
advances up to, but not in excess of $125,418 (the "Advances"), to Executive
for the purchase of Shares. In consideration of the Advances and other value
received, Executive promises to pay to Company the aggregate amount of all
Advances, together with interest thereon at a rate per annum equal to 7.0625%,
calculated on the basis of actual days elapsed, but computed as if each
calendar year consisted of 365 or 366 days, as the case may be, as provided
herein.
2. Use of Advances. The Advances shall be used by Executive exclusively to
purchase Shares not later than June 22, 1995. Advances shall be made only upon
Executive's delivery to Company of written evidence satisfactory to Company of
Executive's purchase of Shares.
3. Repayment of Loan. Advances shall be due and payable in three (3) equal
installments on each of June 15, 1996, 1997 and 1998 (each a "Payment Date"),
together with all interest then accrued but unpaid; provided, however,
Advances, together with all interest then accrued but unpaid shall be
immediately due and payable upon the termination of Executive's employment
prior to a Change in Control (as hereinafter defined) for a reason other than a
reason set forth in clause (c) of this paragraph; and provided further,
however, that amounts due under this Agreement on a Payment Date shall be
1
<PAGE> 2
automatically forgiven by Company, without further obligation or liability
therefor by Executive, (a) in the event a Change in Control has occurred prior
to such Payment Date; (b) if Executive is then employed by Company or any
Subsidiary of Company (the "Employer"); or (c) if not employed by Employer on
such Payment Date and Executive's employment was terminated:
(i) as the result of Executive's death;
(ii) by Employer:
(A) as a result of Executive's absence from his
employment duties on a full time basis (1)
for 180 consecutive calendar days due to
Executive's incapacity arising from
physical or mental impairment or illness;
and (2) following Company's written notice
of termination of employment (whether
before or after the end of such 180 day
period); or
(B) for any reason other than for Cause; or
(iii) by Employee (1) for Good Reason; or (2) if his
health should become impaired to an extent that
makes the continued performance of his employment
duties hazardous to his physical or mental health or
his life.
4. Certain Definitions. As used in this Agreement, each of the
following terms or phrases has the meaning stated:
(a) "Acquiring Person" means any Person other than
Company, any of Company's Subsidiaries, any employee
benefit plan of Company or of a Subsidiary of
Company or of a corporation owned directly or
indirectly by the stockholders of Company in
substantially the same proportions as their
ownership of stock of Company, or any trustee or
other fiduciary holding securities under an employee
benefit plan of Company or of a Subsidiary of
Company or of a corporation owned directly or
indirectly by the stockholders of Company in
substantially the same proportions as their
ownership of stock of Company.
(b) "Across-the-Board Salary Reduction" shall mean a
reduction in the Base Salary that is a part of, and
is at a rate consistent with, a reduction in the
base salaries paid to all executive officers of the
Company or its Subsidiaries.
(c) "Affiliate" means, with respect to any Person, any
other Person that directly or indirectly controls,
is controlled by, or is under common control with
the Person in question. As used in this definition
of
2
<PAGE> 3
"Affiliate," the term "control" means the possession,
directly or indirectly, of the power to direct or
cause the direction of the management and policies
of a Person, whether through ownership of Voting
Securities, by contract, or otherwise.
(d) "Base Salary" shall mean compensation paid by
Company to Executive for Executive's services in a
specified amount per annum. The Base Salary shall be
payable in substantially equal bi-monthly
installments. The Compensation Committee of the
Board may review the Base Salary periodically and
may grant such increases, or effect such reductions,
in the Base Salary as the Compensation Committee
considers appropriate in accordance with such
compensation guidelines and policies as it may
establish from time to time.
(e) "Cause" shall mean (i) Executive's continued failure
to substantially perform his duties and
responsibilities (other than any such failure
resulting from Executive's incapacity due to
physical or mental impairment or illness) after
written demand for substantial performance is
delivered by [IN THE CASE OF THE CHIEF EXECUTIVE
OFFICER: the Board] [IN THE CASE OF THE OTHER
EXECUTIVE OFFICERS: the Board or the Chief Executive
Officer] specifically identifying the manner in
which [IN THE CASE OF THE CHIEF EXECUTIVE OFFICER:
the Board] [IN THE CASE OF THE OTHER EXECUTIVE
OFFICERS: the Board or the Chief Executive Officer,
as the case may be,] believes Executive has not
substantially performed such duties and
responsibilities; (ii) Executive's engaging in
misconduct that is materially injurious to the
Company or an Affiliate of the Company, monetarily
or otherwise; or (iii) disclosure of Nonpublic
Information as further defined. For purposes of
clause (ii) of this paragraph, an act, or failure to
act, on Executive's part shall be considered
"misconduct" if done, or omitted, by Executive not
in good faith and without reasonable belief that
such act, or failure to act, was in the best
interests of the Company.
(f) "Change in Control" shall have the meaning given
that term in Section 1.6 of Company's Long-term
Incentive Plan dated February 19, 1991, as amended
from time to time.
(g) "Excessive Salary Reduction" shall mean (i) a
reduction in the Base Salary that is not an
Across-the-Board Salary Reduction and that, when
combined with the net effect of all prior increases
and reductions in the Base Salary (other than prior
reductions that were Across-the-Board Salary
Reductions), results in the Base Salary being less
than 80% of the highest Base Salary to which
Executive
3
<PAGE> 4
has ever been subject; or (ii) a reduction in the
Base Salary (whether or not an Across-the-Board
Salary Reduction) that, when combined with the net
effect of all prior increases and reductions in the
Base Salary (whether or not Across-the-Board Salary
Reductions), results in the Base Salary being less
than 65% of the highest Base Salary to which
Executive has ever been subject.
(h) "Good Reason" shall mean the occurrence, subsequent
to the date hereof, of (i) a material reduction in
Executive's authorities, powers, functions, duties
or responsibilities; (ii) an Excessive Salary
Reduction; or (iii) a material failure by Company or
its Subsidiaries to comply with any written
agreement among Executive and Company or its
Subsidiary.
(j) "Incumbent Board" means all individuals who, as of
the date hereof, constitute the board of directors
of Company and any other individual who becomes a
director of Company after that date and whose
election or appointment by the board of directors or
nomination for election by Company's stockholders
was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board.
(k) "Nonpublic Information" means various information
regarding the Company and its business, operations
and affairs which Executive, in connection with his
employment with the Company, has received, and will
continue to receive, and which is not publicly
available other than as a result of disclosure by
Executive in violation of any written agreement
between Executive and Company or any of its
Subsidiaries, is referred to herein as "Nonpublic
Information."
(l) "Person" means any person or entity of any nature
whatsoever, specifically including an individual, a
firm, a company, a corporation, a partnership, a
trust or other entity. A Person, together with that
Person's Affiliates and Associates (as those terms
are defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended ("Exchange Act")),
and any Persons acting as a partnership, limited
partnership, joint venture, association, syndicate
or other group (whether or not formally organized),
or otherwise acting jointly or in concert or in a
coordinated or consciously parallel manner (whether
or not pursuant to any express agreement), for the
purpose of acquiring, holding voting or disposing of
securities of Company with such Person, shall be
deemed a single "Person."
(m) "Subsidiary" means any corporation or other entity
of which a majority of the voting power of the
Voting Securities is owned, directly or indirectly,
by such Person.
4
<PAGE> 5
(n) "Voting Securities" means any securities or equity
interests that vote generally in the election of
directors, in the admission of general partners, or
in the selection of any other similar governing
body.
5. Miscellaneous.
(a) Usury Savings Clause. Regardless of any provision
contained herein, Company shall never be entitled to
receive, collect, or apply, as interest, any amount
in excess of the maximum rate permitted by law
("Highest Lawful Rate"), and, in the event the
Company ever receives, collects, or applies as
interest, any such excess, such amount which would
be excessive interest shall be deemed a partial
prepayment of advances and treated hereunder as
such; and, if all Advances have been paid or
forgiven in full, any remaining excess shall
forthwith be paid to Executive. In determining
whether or not the interest paid or payable, under
any specific contingency, exceeds the Highest Lawful
Rate, Executive and the Company shall, to the
maximum extent permitted under applicable law, (a)
treat all Advances as but a single extension of
credit, (b) characterize any nonprincipal payment as
an expense, fee, or premium rather than an interest,
(c) exclude voluntary prepayments and the effects
thereof, and (d) spread the total amount of interest
throughout the entire contemplated term hereof;
provided that if all Advances have been paid or
forgiven in full prior to the end of the full
contemplated term hereof, and if the interest
received for the actual period of existence thereof
exceeds the Highest Lawful Rate, the Company shall
refund to Executive the amount of such excess, and,
in such event, the Company shall not be subject to
any penalties provided by any law for contracting
for, charging, taking, reserving, or receiving
interest in excess of the Highest Lawful Rate.
(b) Successors. This Agreement shall be binding upon,
and inure to the benefit of Company and Executive
and their respective successors, assigns, personal
and legal representatives, executors,
administrators, heirs, distributees, devisees, and
legatees, as applicable.
(c) Notices. For purposes of this Agreement, notices and
all other communications provided for in the
Agreement shall be in writing and shall be deemed to
have been duly given when (i) delivered personally;
(ii) sent by telecopy or similar electronic device
and confirmed; (iii) delivered by overnight mail; or
(iv) sent by registered or certified mail, postage
prepaid, addressed as follows:
If to Executive:
5
<PAGE> 6
(marked "Personal and Confidential")
Scott D. Sheffield
303 W. Wall, Suite 101
Midland, Texas 79701
If to Company:
Parker & Parsley Petroleum Company
303 W. Wall, Suite 101
Midland, Texas 79701
Attention: President, and
General Counsel
or to such other address as any party may have
furnished to the other in writing in accordance
herewith, except that notices of change of address
shall be effective only upon receipt.
(d) Waivers. No provision of this Agreement may be
modified, waived, or discharged unless such waiver,
modification, or discharge is agreed to in writing
signed by Executive and Company. No waiver by either
party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or
implied, with respect to the subject matter hereof
have been made by either party which are not set
forth expressly in this Agreement.
(e) Governing Law. THIS AGREEMENT IS BEING MADE AND
EXECUTED IN, AND IS INTENDED TO BE PERFORMED, IN THE
STATE OF TEXAS, AND SHALL BE GOVERNED, CONSTRUED,
INTERPRETED, AND ENFORCED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE STATE OF TEXAS.
(f) Attorney Fees. All legal fees and costs incurred by
Executive in connection with resolution of any
dispute or controversy under or in connection with
this Agreement shall be reimbursed promptly by
Company to the Executive upon presentation by
Executive to Company, after the dispute or
controversy is resolved in favor of Executive.
(g) Validity. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not
affect the validity or enforceability of any other
provision of this Agreement, which shall remain in
full force and effect.
6
<PAGE> 7
(h) Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed
to be an original, but all of which together will
constitute one and the same agreement.
(i) Offset. Without limiting any remedy available to the
Company at law or in equity for breach by Executive
of this Agreement, Company may offset any amounts
owed, or benefits payable, by Company to Executive
under any other agreement or benefit plans against
amounts due and payable from Executive to Company
under this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
PARKER & PARSLEY PETROLEUM COMPANY
By: /s/ Scott D. Sheffield
-----------------------------------------
Scott D. Sheffield, President
EXECUTIVE:
/s/ Scott D. Sheffield
---------------------------------------------
8
<PAGE> 9
SCHEDULE I
Buddy J. Knight
Denny B. Bullard
David E. Sanders
Danny Kellum
Howard Bradford
Hermann E. Eben
Lon C. Kile
Larry N. Paulsen
Timothy L. Dove
W.T. Howard
Mark L. Withrow
9
<PAGE> 1
EXHIBIT 12.1
PARKER & PARSLEY PETROLEUM COMPANY
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
COMBINED COMBINED
------------ ----------
NINE MONTHS NINE MONTHS YEAR ENDED DECEMBER 31, NINE MONTHS YEAR ENDED
ENDED ENDED -------------------------------------------------- ENDED DECEMBER 31,
SEP. 30, 1997 SEP. 30, 1996 1996 1995 1994 1993 1992 SEP. 30, 1997 1996
----------------------------- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PRETAX EARNINGS 23,478 163,031 200,348 (150,007) (20,491) 48,403 30,146 (35,076) 78,808
----------------------------- ----------------------------------------------------------------------------
ADJUSTMENTS:
ADD FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS:
INTEREST:
EXPENSED 44,264 36,105 46,155 65,449 50,552 23,338 14,708 106,406 138,580
CAPITALIZED 0 0 0 0 0 733 0 157
RENTAL EXPENSE
ATTRIBUTABLE TO
INTEREST 724 724 965 1,200 500 567 367 724 965
PREFERRED STOCK
DIVIDENDS OF
SUBSIDIARY 0 0 0 0 0 0 0 0 0
PREFERRED STOCK
DIVIDENDS OF THE
COMPANY 0 0 0 0 0 0 0 0 0
----------------------------- ----------------------------------------------------------------------------
TOTAL FIXED
CHARGES AND
PREFERRED
STOCK DIVIDENDS 44,988 36,829 47,120 66,649 51,052 23,905 15,808 107,130 139,702
----------------------------- ----------------------------------------------------------------------------
DEDUCT:
INTEREST CAPITALIZED 0 0 0 0 0 0 733 0 157
PREFERRED STOCK
DIVIDENDS OF
SUBSIDIARY 0 0 0 0 0 0 0 0 0
----------------------------- ----------------------------------------------------------------------------
TOTAL DEDUCTS 0 0 0 0 0 0 733 0 157
----------------------------- ----------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------
ADJUSTED EARNINGS 68,466 199,860 247,468 (83,358) 30,561 72,306 45,221 72,054 218,353
============================= ============================================================================
RATIO OF EARNINGS
TO FIXED CHARGES 1.52 5.43 5.25 (1.25) 0.60 3.02 2.86 0.67 1.56
RATIO OF EARNINGS
TO FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS (C) 1.52 5.43 5.25 (1.25) 0.60 3.02 2.86 0.67 1.56
============================= ============================================================================
RATIO OF EARNINGS TO
FIXED CHARGES
DISCLOSURE 1.5 5.4 5.3 (b) (b) 3.0 2.9 (b) 1.6
DEFICIENCY,
IF ANY 150,007 20,491 35,076
</TABLE>
- ----------
(A) FOR PURPOSES OF COMPUTING SUCH RATIO, ADJUSTED EARNINGS CONSIST OF INCOME
BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE PLUS FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS, NET OF PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND INTEREST CAPITALIZED. FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS CONSIST OF INTEREST EXPENSE, INTEREST CAPITALIZED, THE PORTION OF
RENTAL EXPENSE ATTRIBUTABLE TO INTEREST, PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND PREFERRED STOCK DIVIDENDS OF THE COMPANY. THE DIVIDENDS ON THE
MIPS ARE RECORDED AS INTEREST EXPENSE FOR FINANCIAL REPORTING PURPOSES.
(B) THE RATIO INDICATES A LESS THAN ONE-TO-ONE COVERAGE BECAUSE THE EARNINGS
ARE INADEQUATE TO COVER THE FIXED CHARGES FOR THE PERIOD. PRO FORMA COMBINED
EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997, AND THE COMPANY'S
HISTORICAL EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994, WERE
INSUFFICIENT TO COVER ITS FIXED CHARGES. THE AMOUNTS OF THE DEFICIENCIES WERE
$35.1 MILLION, $150 MILLION AND $20.5 MILLION, RESPECTIVELY.
(C) FOR PURPOSES OF COMPUTING THE RATIO, ADJUSTED EARNINGS CONSIST OF INCOME
BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE PLUS FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS, NET OF PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND INTEREST CAPITALIZED, AND FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS CONSIST OF INTEREST EXPENSE, INTEREST CAPITALIZED, THE PORTION OF
RENTAL EXPENSE ATTRIBUTABLE TO INTEREST, PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY, AND PREFERRED STOCK DIVIDENDS. THE DIVIDENDS ON THE 6 1/4%
CUMULATIVE GUARANTEED MONTHLY INCOME CONVERTIBLE PREFERRED SHARES OF PARKER &
PARSLEY CAPITAL LLC, A SUBSIDIARY OF PARKER & PARSLEY, WERE RECORDED AS INTEREST
EXPENSE FOR FINANCIAL REPORTING PURPOSES UNTIL THOSE SHARES WERE CONVERTED INTO
COMMON STOCK OF PARKER & PARSLEY ON JULY 28, 1997.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors and Stockholders
Pioneer Natural Resources Company
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.
Our reports refer to a change in the method of accounting for the impairment of
long-lived assets and for long-lived assets to be disposed of and a change in
the method of accounting for income taxes.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Midland, Texas
December 11, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Dallas, Texas
December 12, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form S-3 registration
statement of Pioneer Natural Resources Company of our report dated February 14,
1997 except for Notes 12(b) and (c) which are as of September 3, 1997 and
October 29, 1997, respectively, on our audit of the consolidated financial
statements of Chauvco Resources Ltd. as at December 31, 1996 and 1995 and for
each of the years in the three year period ended December 31, 1996, and to all
references to Price Waterhouse included in or made a part of this registration
statement.
/s/ Price Waterhouse
Chartered Accountants
Calgary, Alberta
December 11, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form S-3 registration
statement of Pioneer Natural Resources Company of our report dated July 26,
1996, on our audit of the financial statements of Greenhill Petroleum
Corporation as of June 30, 1996, and for the year ended. We also consent to the
reference to our firm under the caption "Expert".
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Houston, Texas
December 11, 1997
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
We hereby consent to the use of our audit letter prepared for Parker &
Parsley Petroleum Company, effective December 31, 1996, and to all references to
our firm included in or made a part of this Registration Statement on Form S-3
of Pioneer Natural Resources Company.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ Frederic D. Sewell
--------------------------
Frederic D. Sewell
President
Dallas, Texas
December 10, 1997
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT ENGINEERS AND GEOLOGISTS
Williamson Petroleum Consultants, Inc. (Williamson) hereby consents to the
incorporation by reference to our report entitled "Evaluation and Review of Oil
and Gas Reserves to the Interests of Mesa Inc. in the Hugoton Area, Various
Counties, Kansas and West Panhandle Area, Various Counties, Texas, Effective
December 31, 1996, for Disclosure to the Securities and Exchange Commission,
Williamson Project 6.8421" dated March 17, 1997, with respect to Mesa Inc. and
to all references to our firm included in or made a part of the Pioneer Natural
Resources Company Registration Statement on Form S-3 to be filed on December 15,
1997.
/s/ Williamson Petroleum Consultants, Inc.
------------------------------------------
WILLIAMSON PETROLEUM CONSULTANTS, INC.
Houston, Texas
December 15, 1997
<PAGE> 1
EXHIBIT 23.7
[MILLER AND LENTS, LTD. LETTERHEAD]
December 11, 1997
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Re: Consent of Independent Petroleum Engineers and Geology
Gentlemen:
We hereby consent to the incorporation by reference of our report dated
February 24, 1997 entitled "Reserve and Net Revenue Forecast as of December 31,
1996, SEC Price Case" with respect to Greenhill Petroleum Corporation and MESA
Inc. and to all references to our firm included in or made a part of the
Registration Statement on Form S-3 of Pioneer Natural Resources Company.
Very truly yours,
MILLER AND LENTS, LTD.
By: /s/ P.G. Von Tungeln
P.G. Von Tungeln
Chairman
<PAGE> 1
EXHIBIT 23.8
[GILBERT LAUSTSEN JUNG ASSOCIATES LTD. LETTERHEAD]
CONSENT OF INDEPENDENT ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference of our reports entitled:
- Chauvco Resources Ltd. (Tidal Properties), Reserve Determination and
Economic Analysis, effective January 1, 1997, dated February 14, 1997.
- Chauvco Resources (Gabon) S.A., Remboue Field, Reserve Determination
and Economic Analysis, effective December 31, 1996, dated February 14,
1997.
- Chauvco Resources (Gabon) S.A., Remboue Field, Reserve Determination
and Economic Analysis, effective August 1, 1997, dated August 19, 1997.
- Chauvco Resources (Argentina) S.A., Reserve Determination and
Economic Analysis, effective December 31, 1996, dated January 21, 1997.
and to all references to our firm included in or made a part of this
Registration Statement on Form S-3 of Pioneer Natural Resources Company.
Yours very truly,
GILBERT LAUSTSEN JUNG
ASSOCIATES LTD.
per: /s/ WAYNE W. CHOW
Wayne W. Chow, P. Eng.
Vice-President
Calgary, Alberta
Dated: December 12, 1997
<PAGE> 1
EXHIBIT 23.9
CONSENT OF INDEPENDENT ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference of our report
entitled "Audit of Evaluation of Oil and Gas Reserves of Chauvco Resources
Ltd." prepared for Chauvco Resources Ltd. dated February 8, 1997 and to all
references to our firm included in or made a part of this Registration
Statement on Form S-3 of Pioneer Natural Resources Company.
MARTIN PETROLEUM & ASSOCIATES
By: /s/ John M. Hewitt
-----------------------------
John M. Hewitt, M.A., P.Eng.
Associate Partner
Calgary, Alberta
December 11 , 1997
