<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 12, 2000
REGISTRATION STATEMENT NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
QUESTAR MARKET RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
UTAH 87-0287750
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
180 EAST 100 SOUTH STREET
P.O. BOX 45601
SALT LAKE CITY, UTAH 84145-0601
(801) 324-2600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CONNIE C. HOLBROOK, ESQ.
QUESTAR MARKET RESOURCES, INC.
180 EAST 100 SOUTH STREET
P.O. BOX 45601
SALT LAKE CITY, UTAH 84145-0601
(801) 324-2600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:
<TABLE>
<S> <C>
RICHARD J. GROSSMAN, ESQ. PAUL C. PRINGLE, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP BROWN & WOOD LLP
FOUR TIMES SQUARE 555 CALIFORNIA STREET, SUITE 5000
NEW YORK, NEW YORK 10036-6522 SAN FRANCISCO, CALIFORNIA 94104
TEL: (212) 735-3000 TEL: (415) 772-1200
FAX: (212) 735-2000 FAX: (415) 397-4621
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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, as amended, check the following box: / /
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 this Form is a post-effective amendment filed pursuant to
Rule 462(d) 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: / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM OFFERING PROPOSED
TITLE OF SECURITIES AMOUNT TO BE PRICE PER MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED NOTE(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
% Senior Notes Due 20[ ].................. $150,000,000 100% $ 150,000,000 $ 39,600
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) of the Securities Act.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH 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 SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 12, 2000
P R O S P E C T U S
$150,000,000
[LOGO]
QUESTAR MARKET RESOURCES, INC.
(A SUBSIDIARY OF QUESTAR CORPORATION)
% SENIOR NOTES DUE 20[ ]
----------------------
We will pay interest on the senior notes on and of
each year, beginning , 2000. The senior notes will mature
on , 20[ ]. We may redeem some or all of the senior notes
at any time at redemption prices described in this prospectus.
The senior notes will be unsecured obligations and rank equally with our
unsecured senior indebtedness. The senior notes will be issued only in
registered form in denominations of $1,000.
----------------------
<TABLE>
<CAPTION>
PER SENIOR NOTE TOTAL
--------------- -----
<S> <C> <C>
Public offering price(1)........................................ % $
Underwriting discount........................................... % $
Proceeds, before expenses, to Questar Market Resources.......... % $
</TABLE>
(1) Plus accrued interest from , 2000, if settlement
occurs after that date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The senior notes will be ready for delivery in book-entry form only through
The Depository Trust Company on or about , 2000.
----------------------
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
TD SECURITIES
------------------------
The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary.................................................................................................... 3
Use of Proceeds............................................................................................ 7
Capitalization............................................................................................. 7
Selected Historical Financial Data......................................................................... 8
Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 9
Business................................................................................................... 13
Our Relationship with Questar.............................................................................. 17
Description of the Senior Notes............................................................................ 18
Underwriting............................................................................................... 26
Legal Matters.............................................................................................. 28
Experts.................................................................................................... 28
Where You Can Find Additional Information.................................................................. 29
</TABLE>
------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus is accurate only
as of the date on the front cover of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that date.
------------------------
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the meaning of
Section 27a of the Securities Act of 1933, as amended, and Section 21e of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical facts included or incorporated by reference in this
prospectus, including, without limitation, statements regarding our future
financial position, business strategy, budgets, projected costs and plans and
objectives of management for future operations, are forward-looking statements.
In addition, forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may", "will", "could," "expect",
"intend", "project", "estimate", "anticipate", "believe", "forecast" or
"continue" or the negative thereof or variations thereon or similar terminology.
Although we believe that the expectations reflected in these forward-looking
statements are reasonable, we cannot assure you that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from those expressed or implied in forward-looking statements
include changes in general economic conditions, gas and oil prices and supplies,
competition, regulation of the Wexpro settlement agreement, availability of gas
and oil properties for sale or exploration, the rate of inflation, the weather
and other natural phenomena, the effect of accounting policies issued
periodically by accounting standard-setting bodies, and other factors beyond our
control that could affect adversely our financial condition and results of
operations. All our subsequent written and oral forward-looking statements or
those of persons acting on our behalf, are qualified by these cautionary
statements. We assume no duty to update or revise our forward-looking statements
based on changes in internal estimates or expectations or otherwise.
<PAGE>
Unless the context otherwise requires, in this prospectus:
o "Questar" refers to Questar Corporation, an integrated energy services
holding company with two principal business units, Market Resources and
Regulated Services
o "We," "us" and "our" refer collectively to Questar Market Resources, a
subholding company of Questar, and its subsidiaries, which collectively
comprise the Market Resources unit of Questar
o "Questar E&P" refers to our subsidiary Questar Exploration and Production
Company
o "Celsius Ltd." refers to Celsius Energy Resources Ltd., Questar E&P's
Canadian subsidiary
o "Canor" refers to Canor Energy Ltd., a Canadian oil and gas exploration
company recently acquired by Celsius Ltd.
o "Wexpro" refers to our subsidiary Wexpro Company
o "QGM" refers to our subsidiary Questar Gas Management Company
o "Questar Energy Trading" refers to our subsidiary Questar Energy Trading
Company
o "Questar Gas" refers to one of Questar's subsidiaries, Questar Gas
Company
o "Questar Pipeline" refers to one of Questar's subsidiaries, Questar
Pipeline Company
EXPLANATION OF WEIGHTS AND MEASURES
o Bcf = billion cubic feet
o Dth = decatherm
o Bbl = barrel
o 1Dth = 1 MMBtu
o MBbl = thousand barrels
o MDth = thousand decatherms
o MMBbl = million barrels
o MMDth = million decatherms
o Mcf = thousand cubic feet
o Mcfe = thousand cubic feet of natural gas equivalents
o MMcf = million cubic feet
o MMBtu = million British thermal units
o Bcfe = billion cubic feet of natural gas equivalents
o Oil volumes are converted to natural gas equivalents using the ratio of
one barrel of crude oil to six Mcf of natural gas
o Oil includes crude oil and condensate
o Unless otherwise indicated, natural gas volumes are stated at the
official temperature and pressure basis of the area in which the reserves
are located
OTHER TERMS
"Gross" natural gas and oil wells or "gross" acres equals the number of
wells or acres in which we have an interest. We determined "net" gas and oil
wells or "net" acres by multiplying "gross" wells or acres by our working
interest in those wells or acres. A "working interest" in an oil or natural gas
lease is an interest that gives the owner the right to drill, produce and
conduct operating activities on the property and to achieve a share of
production of any hydrocarbons covered by the lease. A working interest also
entitles the owner to a proportionate interest in any well located on the lands
covered by the lease, subject to all royalties, costs and expenses, risks and
other burdens. A "development well" is a well drilled as an additional well to
the same horizon or horizons as other producing wells on a prospect, or a well
drilled on a spacing unit adjacent to a spacing unit with an existing well
capable of commercial production and which is intended to extend the proven
limits of a prospect. An "exploratory well" is a well drilled to find
commercially productive hydrocarbons in an unproved area, or to extend
significantly a known prospect.
2
<PAGE>
SUMMARY
This summary highlights information contained elsewhere in this prospectus.
You should read the entire prospectus carefully, including the financial data
and related notes, before making an investment decision.
THE COMPANY
We and our subsidiaries comprise the Market Resources unit of Questar, a
publicly traded diversified natural gas company with two principal business
units, Market Resources and Regulated Services. We engage in oil and gas
exploration and production; gas gathering and processing; wholesale gas,
electricity, and hydrocarbon liquids marketing and trading; and the acquisition
and development of producing oil and gas properties. We are a subholding company
of Questar and carry out our business through the following subsidiaries:
o Questar E&P, Celsius Ltd. and Canor
o QGM
o Questar Energy Trading
o Wexpro
Management of Questar has identified our company as the primary growth area
within Questar's business strategy. Questar expects to spend approximately 70%
of its budgeted capital expenditures over the next five years on non-regulated
activities, primarily to expand our oil and gas reserves through drilling and
acquisitions and to enlarge our infrastructure of gathering systems, processing
plants, header facilities and nonregulated storage facilities. Our management
believes that the diversity of our activities enhances our basic strategy to
pursue complementary growth for our subsidiaries. As an example, as Questar E&P,
Celsius Ltd. and Canor, our exploration and production subsidiaries, find or
acquire new oil and gas reserves, QGM should have more opportunities to expand
gathering and processing activities, and Questar Energy Trading should have more
physical production to support its marketing programs.
We are parties to several agreements with Questar and its affiliates which
govern different aspects of our relationship with Questar. Summaries of the
agreements may be found under the heading "OUR RELATIONSHIP WITH QUESTAR."
3
<PAGE>
OUR CORPORATE STRUCTURE
The following is a diagram of Questar's and our corporate structure:
[FLOW CHART]
OUR BUSINESS STRATEGY
We believe we can best meet and balance the expectations of Questar and our
fixed income investors by pursuing the following strategies in our business:
o achieve a prudent, disciplined program for growing our oil and gas
reserves
o provide stakeholder value performance in both the short and long term
o employ hedging and other risk management tools to manage cyclicality
o maintain a strong balance sheet that permits prudent growth opportunities
o maintain a portfolio of quality drilling prospects
o identify and divest non-core and marginal assets and activities
o employ technology and proven innovations to reduce costs
RECENT DEVELOPMENTS
Canadian Acquisition. On January 26, 2000, we completed the acquisition of
all of the outstanding shares of Canor Energy Ltd., an oil and gas exploration
company based in Calgary, Alberta. Canor owns or operates more than 800 wells
located primarily in the province of Alberta, as well as in British Columbia and
Saskatchewan. The purchase price for the cash transaction was $61 million
(U.S.).
4
<PAGE>
The Canor acquisition will provide a broader operating and financial base
for our Canadian activities, particularly in the areas of exploration and
exploitation opportunities. We anticipate combining Celsius Ltd. and Canor into
a single entity at some point in the future. The combination of Canor with
Celsius Ltd. will expand our reported proved reserves by approximately 61.1
Bcfe, or 10%, and add about 150,000 net acres to our Canadian undeveloped
leasehold inventory, principally in the province of Alberta.
Pinedale Project. In January 2000, Questar E&P and Wexpro completed a
high-volume producing well in our Pinedale Anticline development in Sublette
County, Wyoming. The Mesa Unit No. 3 produced 11.4 MMcf of natural gas into a
pipeline and 113 barrels of oil during the initial 24-hour period. The flowing
tubing pressure was 1,100 pounds per square inch. The Mesa Unit No. 3 was
drilled to a total measured depth of 13,055 feet and was fracture-stimulated in
11 zones of the Lance Formation. Questar E&P and Wexpro have a combined 93.8%
working interest in the well. We have completed a second Mesa Unit well (No. 6)
located about one-half mile south of the Mesa Unit No. 3. The second well
encountered a similar number of pay zones, and initial test results are
comparable to the Mesa Unit No. 3. A third well failed to produce economic
quantities of gas because of lower-quality reservoir rock. The unsuccessful well
does not diminish our expectations for the development potential of our 14,800
gross acres in the Mesa area of the Pinedale Anticline, where we own a combined
average 60% working interest. Based on 80-acre spacing, we estimate the
potential for 130 or more drilling locations structurally above the unsuccessful
well. Estimated ultimate reserves per well are expected to range between 4 and
11 Bcfe.
THE OFFERING
The following is a brief summary of some of the terms of this offering. For
a more complete description of the terms of the senior notes see "DESCRIPTION OF
THE SENIOR NOTES" in this prospectus.
<TABLE>
<S> <C>
Issuer.................................................. Questar Market Resources, Inc.
Securities offered...................................... $150,000,000 aggregate principal amount of % senior
notes due 20[ ].
Maturity................................................ , 20[ ].
Interest payment dates.................................. and , beginning , 2000.
Ranking................................................. The senior notes will be unsecured and rank equally with
our senior indebtedness. As a holding company, the
claims of creditors of our subsidiaries will have
priority over the claims of holders of senior notes.
As of December 31, 1999, after giving pro forma effect
to this offering and our use of the net proceeds, there
would have been outstanding approximately $289 million
of senior indebtedness.
Optional redemption..................................... We may redeem some or all of the senior notes at any
time at the redemption prices described in this
prospectus.
Use of proceeds......................................... We estimate that the net proceeds from the offering will
be approximately $ million. We intend to use these
proceeds to:
o repay commercial bank debt, and
o repay intercompany indebtedness owed to Questar
</TABLE>
5
<PAGE>
SUMMARY HISTORICAL FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT RATIO DATA)
<S> <C> <C> <C> <C> <C>
SELECTED INCOME STATEMENT DATA:
Revenues........................................... $498,311 $458,272 $523,640 $484,080 $309,466
Operating expenses................................. 421,533 401,643 459,803 419,392 265,613
Write-down of investment in oil & gas properties... -- 31,000 9,000 -- --
-------- -------- -------- -------- --------
Operating income................................... 76,778 25,629 54,837 64,688 43,853
Interest & other income............................ 5,035 2,708 5,566 145 6,108
Debt expense....................................... (17,363) (12,631) (10,882) (8,699) (6,323)
Income tax (expense) credit........................ (18,584) 1,019 (10,410) (13,687) (11,984)
-------- -------- -------- -------- --------
Income from continuing operations.................. 45,866 16,725 39,111 42,447 31,654
Discontinued operations............................ -- (563) (1,021) (322) --
-------- -------- -------- -------- --------
Net income......................................... $ 45,866 $ 16,162 $ 38,090 $ 42,125 $ 31,654
======== ======== ======== ======== ========
SELECTED BALANCE SHEET DATA:
Total assets....................................... $847,891 $815,153 $696,675 $696,754 $457,620
Short-term debt.................................... 24,500 121,800 44,300 78,000 14,000
Long-term debt..................................... 264,894 181,624 133,387 120,000 53,000
Common equity...................................... 387,834 359,638 359,283 337,666 282,144
OTHER FINANCIAL DATA:
EBITDA(1).......................................... $160,421 $130,714 $136,481 $123,512 $100,034
Ratio of earnings to fixed charges(2).............. 4.47 2.07 5.13 7.13 7.43
Net cash provided from operating activities........ $141,245 $127,513 $136,935 $ 83,309 $ 79,596
Net cash used in investing activities.............. 94,858 246,693 81,306 184,453 17,606
</TABLE>
- ------------------
(1) Net income from continuing operations plus interest (debt expense), income
taxes, depreciation, depletion and amortization, including write-downs of
investment in oil and gas properties. We have included information
concerning EBITDA because it is used as an indication of our ability to
service our debt. EBITDA should be used together with operating income and
cash flows as an indicator of our financial perfomance.
(2) For purposes of this presentation, earnings represent income from continuing
operations before income taxes and fixed charges. Fixed charges consist of
total interest charges and amortization of debt issuance costs and the
interest portion of rental costs (which is estimated at 50%). Write-downs of
investment in oil and gas properties reduced income before income taxes by
$31 million in 1998 and $9 million in 1997.
6
<PAGE>
USE OF PROCEEDS
We plan to use the net proceeds from the sale of the senior notes to repay
a portion of our commercial bank term debt and to repay intercompany
indebtedness we owe Questar. At December 31, 1999, our bank long-term debt
totaled approximately $264.9 million and had an average interest rate of 6.54%
per annum, and short-term debt owed to Questar totaled approximately $24.5
million and had an interest rate of 6.61% per annum. We incurred our bank debt
and the short-term debt we owe Questar for general corporate purposes, including
working capital needs.
If gross proceeds of this offering were applied first to repayment of
intercompany debt outstanding at December 31, 1999 and then to repayment of our
commercial bank term debt on that date, affiliates of certain of the
underwriters would receive the following loan repayment amounts: Bank of
America--$ million; Bank One NA-- $ million; and Toronto Dominion
Bank--$ million.
CAPITALIZATION
The following table shows our short-term debt and capitalization as of
December 31, 1999 and as adjusted for this offering.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
--------------------------------------
AS ADJUSTED
ACTUAL AS ADJUSTED PERCENTAGE
-------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Short-term debt............................................................ $ 24,500 -- --
======== ========= =====
Long-term debt............................................................. $264,894 $ 289,394 42.7%
Common shareholder's equity................................................ 387,834 387,834 57.3
-------- --------- -----
Total capitalization..................................................... $652,728 $ 677,228 100.0%
======== ========= =====
</TABLE>
7
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth our selected financial data for the five
years ended December 31, 1999. You should read this table together with the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and the notes thereto
included in our registration statement on Form 10 dated April 12, 2000
incorporated by reference in this prospectus. The information for the years
ended December 31, 1996 and 1995 is unaudited.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT RATIO DATA)
<S> <C> <C> <C> <C> <C>
SELECTED INCOME STATEMENT DATA:
Revenues........................................... $498,311 $458,272 $523,640 $484,080 $309,466
Operating expenses................................. 421,533 401,643 459,803 419,392 265,613
Write-down of investment in oil and gas
properties...................................... -- 31,000 9,000 -- --
-------- -------- -------- -------- --------
Operating income................................... 76,778 25,629 54,837 64,688 43,853
Interest & other income............................ 5,035 2,708 5,566 145 6,108
Debt expense....................................... (17,363) (12,631) (10,882) (8,699) (6,323)
Income tax (expense) credit........................ (18,584) 1,019 (10,410) (13,687) (11,984)
-------- -------- -------- -------- --------
Income from continuing operations.................. 45,866 16,725 39,111 42,447 31,654
Discontinued operations............................ -- (563) (1,021) (322) --
-------- -------- -------- -------- --------
Net income......................................... $ 45,866 $ 16,162 $ 38,090 $ 42,125 $ 31,654
======== ======== ======== ======== ========
SELECTED BALANCE SHEET DATA:
Total assets....................................... $847,891 $815,153 $696,675 $696,754 $457,620
Short-term debt.................................... 24,500 121,800 44,300 78,000 14,000
Long-term debt..................................... 264,894 181,624 133,387 120,000 53,000
Common equity...................................... 387,834 359,638 359,283 337,666 282,144
OTHER FINANCIAL DATA:
EBITDA(1).......................................... $160,421 $130,714 $136,481 $123,512 $100,034
Ratio of earnings to fixed charges(2).............. 4.47 2.07 5.13 7.13 7.43
Net cash provided from operating activities........ $141,245 $127,513 $136,935 $ 83,309 $ 79,596
Net cash used in investing activities.............. 94,858 246,693 81,306 184,453 17,606
</TABLE>
- ------------------------
(1) Net income from continuing operations plus interest (debt expense), income
taxes, depreciation, depletion and amortization, including write-downs of
investment in oil and gas properties. We have included information
concerning EBITDA because it is used as an indication of our ability to
service our debt. EBITDA should be used together with operating income and
cash flows as an indicator of our financial performance.
(2) For purposes of this presentation, earnings represent income from continuing
operations before income taxes and fixed charges. Fixed charges consist of
total interest charges and amortization of debt issuance costs and the
interest portion of rental costs (which is estimated at 50%). Write-downs of
investment in oil and gas properties reduced income before income taxes by
$31 million in 1998 and $9 million in 1997.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis addresses changes in our financial
condition and results of operations.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS EXCEPT PER UNIT DATA)
<S> <C> <C> <C>
OPERATING INCOME:
Revenues:
Natural gas sales.......................................................... $125,245 $ 98,767 $ 89,489
Oil and natural gas liquids sales.......................................... 41,521 36,722 53,722
Cost-of-service gas operations............................................. 61,705 61,448 52,950
Energy marketing........................................................... 243,296 234,565 297,413
Gas gathering and processing............................................... 22,341 21,954 25,998
Other...................................................................... 4,203 4,816 4,068
-------- -------- --------
Total revenues.......................................................... 498,311 458,272 523,640
Operating expenses:
Energy purchases........................................................... 239,201 230,462 291,851
Operating and maintenance.................................................. 79,916 73,763 72,958
Depreciation and amortization.............................................. 78,608 71,377 67,078
Write-down of oil and gas properties....................................... 31,000 9,000
Other taxes................................................................ 21,516 24,988 25,569
Oil-income sharing......................................................... 2,292 1,053 2,347
-------- -------- --------
Total operating expenses................................................ 421,533 432,643 468,803
-------- -------- --------
Operating income........................................................ $ 76,778 $ 25,629 $ 54,837
======== ======== ========
OPERATING STATISTICS:
Production volumes:
Natural gas (in MMcf)...................................................... 62,712 51,309 47,442
Oil and natural gas liquids (in MBbl)...................................... 2,866 2,894 2,938
Production revenue:
Natural gas (per Mcf)...................................................... $ 2.00 $ 1.92 $ 1.89
Oil and natural gas liquids (per Bbl)...................................... 14.49 12.69 18.29
Wexpro investment base,
net of deferred income taxes (in thousands)................................ $108,890 $ 97,594 $ 72,867
Energy-marketing volumes
(in thousands of equivalent Dth)........................................... 112,982 113,513 142,601
Natural gas-gathering volumes (in MDth):
For unaffiliated customers................................................. 84,961 72,908 57,586
For Questar Gas............................................................ 32,050 29,893 28,506
For other affiliated customers............................................. 19,659 17,720 17,679
-------- -------- --------
Total gathering......................................................... 136,670 120,521 103,771
======== ======== ========
Gathering revenue (per Dth)................................................ $ 0.15 $ 0.16 $ 0.21
</TABLE>
Our operating income increased 36% in 1999 compared with 1998 excluding a
1998 full cost write-down. Primary factors were an increase in gas production,
higher commodity prices and an increase in the Wexpro investment base.
9
<PAGE>
Revenues from natural gas sales were 27% higher in 1999 compared with 1998.
Gas production rose 22% and selling prices were 4% higher. Revenues from selling
oil and natural gas liquids (NGL) climbed 13% in 1999 due to a 14% increase in
average selling prices.
We achieved a 132% reserve replacement ratio in 1999. Reserve additions,
revisions and purchases amounted to 139 Bcfe with the largest part of the
increased reserves coming through drilling results. We drilled 235 wells (93 net
wells) in 1999, including Wexpro's cost of service drilling, with a 90% success
rate. In 1999 we sold 34 Bcfe of nonstrategic reserves mostly in the Permian
Basin and Kansas with combined daily production of 4.3 MMcf of gas and 1,100
barrels of oil. The sale proceeds reduced the full cost amortization rate in the
fourth quarter of 1999. Reserve replacement in 1998 was 250% or 173 Bcfe,
primarily as a result of acquiring an estimated 150 Bcfe equivalent of proved
oil and gas reserves, primarily in Oklahoma, as well as in Texas, Arkansas and
Louisiana.
Wexpro's investment base, net of deferred income taxes, grew 12% to
$108.9 million as of December 31, 1999, through its successful development
drilling program. Wexpro's effective after-tax return on investment in those
properties was 18.9% at the end of the year.
We achieved a five-year average finding cost of $.85 per Mcfe, including
cost-of-service reserves, in 1999 compared with $.93 per Mcfe in 1998.
During 1999, we had forward contracts in place on approximately 59% of our
gas production at an average price of $2.03 per Mcf, net back to the well.
Approximately 56% of oil production, excluding oil produced by Wexpro, was
hedged at an average price of $15.02 per barrel, net back to the well, which was
equivalent to $16.33 per barrel using the West Texas Intermediate benchmark. At
December 31, 1999, approximately 52% of our owned gas production in 2000 and
2001 was under hedging contracts with prices, net back to the well, between
$2.15 and $2.23 per Mcf. On that date, approximately 84% of oil production in
2000 and 2001, excluding Wexpro, was hedged at $17.22 to $17.67 per barrel, net
back to the well.
A 31% drop in the average selling price of oil and NGL caused a $31 million
write-down of oil and gas properties in the fourth quarter of 1998 under
full-cost accounting rules. The write-down reduced our income in 1998 by $18.5
million after taxes. Our revenues decreased 12% in 1998 compared with 1997, due
primarily to lower marketing revenues and lower selling prices for oil and NGLs.
Natural gas production increased 8% primarily as a result of producing
properties acquired in September 1998. Lower commodity prices in Canada
accounted for a $6 million full-cost write-down out of a total write-down of
$9 million in 1997.
Revenues and product purchases for marketing activities both increased 4%
in 1999 compared with 1998 resulting in no change in the margin year to year. In
1999, we received refunds from pipelines as a result of orders issued by the
Federal Energy Regulatory Commission ("FERC"). Marketing volumes were unchanged
year to year.
Revenues from gas gathering and processing grew 2% in 1999. Gathering
volumes increased 13% because of increased drilling and gas production in the
Rocky Mountain region. A reduction in projected gathering-contract revenues
caused a $3 million write-down of gathering assets out of a total write-down of
$9 million in 1997.
Operating and maintenance expenses increased 8% in 1999 primarily due to an
increase in the number of gas and oil properties. Production costs in aggregate
increased 10% in 1999 compared with 1998, but were 6% lower on an equivalent
cost per Mcf basis. The full-cost amortization rate decreased to $.80 per Mcfe
for 1999, down from $.85 in 1998. However, depreciation and amortization expense
increased 10% in 1999 because of higher gas production.
Debt expense was higher in 1999 and 1998 when compared with the
corresponding prior year, because of higher levels of borrowings used to finance
capital expansion.
The effective income tax rates were below the combined federal, state and
foreign statutory rate of about 40% primarily due to tax credits for tight-sands
gas production. Production tax credits of $5.3 million in 1999, $5.7 million in
1998, and $6.6 million in 1997 reduced income tax expenses.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities. Net cash flow provided from operating activities was
sufficient to fund 1999 capital expenditures. In 1999, we refinanced
reserve-based, long-term debt used to acquire gas and oil reserves in 1998.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Net Income................................................................... $ 45,866 $ 16,162 $ 38,090
Non-cash transactions........................................................ 90,465 100,106 77,132
Changes in working capital................................................... 4,914 11,245 21,713
-------- -------- --------
Net cash provided from operating activities................................ $141,245 $127,513 $136,935
======== ======== ========
</TABLE>
Net cash provided from our operating activities increased 11% in 1999
primarily due to higher net income. Cash flows from accounts receivable
declined, representing increases in balances in 1999, due to higher commodity
prices. The write-downs of oil and gas properties in both 1998 and 1997 and
their effect on deferred income taxes were noncash transactions.
Investing Activities. Our capital expenditures and other investing
activities amounted to $134.3 million in 1999, $254.5 million in 1998 and $92.3
million in 1997. Following is a summary of capital expenditures for 1999 and
1998, and a forecast for 2000:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
2000
FORECAST 1999 1998
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Capital expenditures and other investing activities:
Exploratory drilling....................................................... $ 15,800 $ 1,538 $ 5,898
Development drilling....................................................... 57,400 64,642 60,402
Other exploration.......................................................... 10,400 19,464 6,789
Reserve acquisitions....................................................... 61,100 3,704 158,000
Production................................................................. 11,300 12,856 8,434
Gathering and processing................................................... 7,900 12,703 11,046
General and other.......................................................... 1,600 19,362 3,977
-------- -------- --------
Total................................................................... $165,500 $134,269 $254,546
======== ======== ========
</TABLE>
Capital expenditures in 1999 primarily comprised exploration and
development of gas and oil reserves and a $9.1 million equity contribution in a
partnership that operates a liquids processing plant. We participated in
drilling 235 wells (93 net wells) in 1999 that resulted in 167 gas wells, 10 oil
wells, 19 dry holes and 39 wells in progress at year end. The 1999 drilling
success rate was 90%. Early in 2000, we purchased 100% of the common stock of
Canor with 61 Bcfe of gas and oil reserves for $61 million (U.S.).
Financing Activities. Net cash flow provided from operating activities was
sufficient to fund 1999 capital expenditures. In 1999, we used the proceeds of
long-term debt and collection of notes receivable from Questar to reduce
short-term borrowings from Questar and refinance reserve-based, long-term debt
used to acquire gas and oil reserves. Proceeds from a sale of nonstrategic gas
and oil properties were placed in an escrow account pending a reinvestment in
strategic-producing properties.
In 1999, we entered into a long-term senior revolving-credit facility with
a syndicate of banks. The credit facility has a $295 million capacity. We had
borrowed $264.9 million as of December 31, 1999 under this arrangement. Net
working capital was negative at December 31, 1999 because of short-term
borrowings used to expand operations. We intend to refinance a portion of our
debt with the proceeds from this offering.
Our consolidated capital structure consisted of 41% long-term debt and 59%
common shareholder's equity at December 31, 1999.
11
<PAGE>
MARKET RISK
Our primary market-risk exposures arise from commodity-price changes for
natural gas, oil and other hydrocarbons and changes in long-term interest rates.
We have an investment in a Canadian operation that subjects us to exchange-rate
risk. We have also reserved certain volumes of pipeline capacity for which we
are obligated to pay approximately $3 million annually for the next seven years,
whether or not we are able to market the capacity to others.
Energy Price Risk Management. Energy price risk is a function of changes in
commodity prices as supply and demand fluctuate. We bear a majority of the risk
associated with changes in commodity prices. A primary objective of energy price
hedging is to protect our product sales from adverse changes in energy prices.
We do not enter into hedging contracts for speculative purposes.
We held hedge contracts covering the price exposure for about 72.1 million
Dth of gas and 2.4 million Bbl of oil at December 31, 1999. A year earlier hedge
contracts covered 45.3 million Dth of natural gas and 464,000 Bbl of oil. The
hedging contracts exist for a significant share of our owned gas and oil
production and for a portion of gas-marketing transactions. These contracts at
December 31, 1999 had terms extending through December 2001, with about 65% of
those contracts expiring by the end of 2000.
The mark-to-market adjustment of gas and oil price-hedging contracts at
December 31, 1999, was a negative $6.2 million. The calculation used energy
prices posted on the New York Mercantile Exchange from the last trading day of
1999. A 10% decline in gas and oil prices would cause a positive $16.7 million
mark-to-market adjustment resulting in a $10.5 million balance. Conversely, a
10% increase in prices results in a $16.3 million lower fair value adjustment.
The fair value of hedging contracts at December 31, 1998 was $6 million. In
1998, a 10% decrease in prices would have resulted in a $3.9 million increase in
the fair value of contracts, while a 10% increase in prices would have resulted
in a $4.1 million lower fair value calculation. This sensitivity calculation
does not consider the effect of gains or losses recognized on the underlying
physical side of these transactions, which should largely offset the change in
value.
Interest Rate Risk Management. We owed $264.9 million of variable-rate long
term debt at December 31, 1999 and $181.6 million at December 31, 1998. The book
value of variable rate debt approximates its fair value. If interest rates
change by 10%, interest costs would increase or decrease by about $1.7 million
in 1999 and $1.1 million in 1998. This sensitivity calculation does not
represent the cost to retire the debt securities.
Securities Available for Sale. Securities available for sale represent
equity instruments traded on national exchanges. The value of these investments
is subject to day to day market volatility. A 10% change in prices would
increase or decrease the value by $1.0 million in 1999.
Foreign Currency Risk Management. We do not hedge the Canadian currency
exposure of our Canadian operation's net assets. The net assets of the Canadian
operation were negative at December 31, 1999. Long-term debt held by the
Canadian operation, amounting to $59.9 million (U.S.), is expected to be repaid
from future operations of the foreign company. In January 2000, we expanded our
foreign operations by acquiring 100% of the outstanding common stock of Canor
for $61 million (U.S.).
YEAR 2000 ISSUES
Questar established a team to address the issue of computer programs and
embedded computer chips being unable to distinguish between the year 1900 and
the year 2000 ("Y2K"). The team identified 55 projects among Questar and its
affiliated companies that were assessed, remediated, tested, and determined to
be completed. In the process, Questar employees contacted more than 8,000
vendors and suppliers to assess their readiness to meet obligations to Questar.
The cost of the Y2K project was approximately $5.1 million and our share of
those costs was $.4 million.
We did not experience a disruption of operations because of Y2K.
Preparation for Y2K provided several benefits. We completed an inventory of our
primary systems and a testing laboratory. Systems were tested and remediated
where necessary. The testing laboratory will become an important part of our
information-technology management. In response to the Y2K challenge, business
contingency plans were revised and successfully tested.
12
<PAGE>
BUSINESS
GENERAL
We and our subsidiaries comprise the Market Resources unit of Questar, a
publicly-traded diversified natural gas company with two principal business
units, Market Resources and Regulated Services. We engage in oil and gas
exploration and production; gas gathering and processing; wholesale gas,
electricity, and hydrocarbon liquids trading; and the acquisition and
development of producing oil and gas properties. We are a subholding company of
Questar and carry out our business through the following subsidiaries:
o Questar E&P, Celsius Ltd. and Canor
o QGM
o Questar Energy Trading
o Wexpro
Management of Questar has identified our company as the primary growth area
within Questar's business strategy. Questar expects to spend approximately 70%
of its budgeted capital expenditures over the next five years on non-regulated
activities, primarily to expand our oil and gas reserves through drilling and
acquisitions and to enlarge our infrastructure of gathering systems, processing
plants, header facilities and nonregulated storage facilities. Our management
believes that the diversity of our activities enhances our basic strategy to
pursue complementary growth for our subsidiaries. As an example, as Questar E&P,
Celsius Ltd. and Canor, our exploration and production subsidiaries, find or
acquire new oil and gas reserves, QGM should have more opportunities to expand
gathering and processing activities, and Questar Energy Trading should have more
physical production to support its marketing programs.
Our executive offices are located at 180 East 100 South Street, P.O. Box
45601, Salt Lake City, Utah 84145-0601, and our telephone number is (801)
324-2600. We also maintain regional operating offices in Denver, Colorado;
Oklahoma City, Oklahoma; Tulsa, Oklahoma; Rock Springs, Wyoming; and Calgary,
Alberta.
OIL AND GAS EXPLORATION AND PRODUCTION--QUESTAR E&P, CELSIUS LTD. AND CANOR
Our exploration and production, or E&P, subsidiaries, Questar E&P, Celsius
Ltd. and Canor, form a unique group that conducts a blended program of low-cost
development drilling, low-risk oil and gas reserve acquisition, and high-quality
exploration. The E&P group also maintains a geographical balance and diversity
while concentrating its activities in core areas in which it has accumulated
geologic knowledge and developed significant management expertise. Core areas of
activity include the Rocky Mountain Region of Wyoming, Colorado, and Utah; the
Mid-Continent Region of Oklahoma, the Texas Panhandle, East Texas, and the Upper
Gulf Coast; the Southwest Region of northwest New Mexico and southwest Colorado;
and the Western Canada Sedimentary Basin located primarily in Alberta, Canada.
At December 31, 1999, we had proved noncost-of-service reserves of 612.9
Bcfe of natural gas, crude oil and natural gas liquids. Noncost-of-service
reserves exclude those cost-of-service reserves of our affiliate, Questar Gas.
Natural gas comprised 84% of total noncost-of-service proved reserves and proved
developed reserves comprised 85% of total noncost-of-service proved reserves on
energy equivalent bases.
Proved reserves are those quantities of natural gas and crude oil,
condensate and natural gas liquids on a net revenue interest basis which
geological and engineering data demonstrate with reasonable certainty are
recoverable under existing economic and operating conditions. Proved developed
reserves include proved developed producing reserves and proved developed
behind-pipe reserves. Proved developed producing reserves include only those
reserves expected to be recovered from existing completion intervals in existing
wells. Proved undeveloped reserves include those reserves expected to be
recovered from new wells on proved undrilled acreage or from existing wells
where a relatively major expenditure is required for re-completion.
13
<PAGE>
GAS GATHERING AND PROCESSING--QGM
QGM conducts gathering and processing activities in the Rocky Mountain and
Mid-Continent areas. Its activities are not subject to regulation by the FERC.
QGM was formed in 1993 as a wholly-owned subsidiary of Questar Pipeline to
construct and operate the Blacks Fork Processing Plant in southwestern Wyoming.
It expanded in 1996 when Questar Pipeline transferred its gathering assets and
activities to QGM. In mid-1996, ownership of QGM was moved from Questar Pipeline
to us and QGM acquired the processing plants that formerly belonged to Questar
E&P.
QGM's gathering system consists of 1,400 miles of gathering lines,
compressor stations, field dehydration plants and measuring stations, and was
largely built to gather production from Questar Gas' cost-of-service properties.
During 1999, QGM gathered 32.1 MMDth of natural gas from Questar Gas, compared
to 29.9 MMDth in 1998, for which it received $4.7 million in 1999 in demand
charges from Questar Gas. Under a contract that was assigned with the gathering
assets from Questar Pipeline, QGM is obligated to gather Questar Gas'
cost-of-service production for the life of the properties. QGM's total gas
gathering volumes were 136.7 MMDth in 1999 compared to 120.5 MMDth in 1998.
QGM's gathering system was originally built as part of a regulated company.
QGM now operates in a different competitive environment. Often, new wells will
have connections with more than one gathering system, and producers insist that
gathering systems be tied to more than one pipeline.
In addition to gathering activities, QGM is also engaged in processing
activities. It owns a 50% interest in the Blacks Fork Processing Plant, which
has a daily capacity of 84 MMcf and may be expanded during 2000. This plant
strips liquids such as ethane and butane from natural gas volumes. QGM and
Wexpro jointly own a new processing facility located in the Canyon Creek area of
southwestern Wyoming that has an operating capacity of 45 MMcf per day. QGM also
owns interests in other processing plants in the Rocky Mountain and
Mid-Continent areas.
WHOLESALE MARKETING AND TRADING--QUESTAR ENERGY TRADING
Questar Energy Trading conducts energy marketing and trading activities. It
combines gas volumes purchased from third parties and equity production
(production that is produced by affiliates) to build a flexible and reliable
portfolio. Questar Energy Trading aggregates supplies of natural gas for
delivery to large customers including industrial users and other marketing
entities. During 1999, Questar Energy Trading marketed a total of 101.1 MMDth of
natural gas, 2.0 MMBbls of liquids, and 10,000 megawatt-hours of electricity and
earned a gross profit margin of $4.1 million.
Questar Energy Trading uses derivatives as a risk management tool to
provide price protection for physical transactions involving equity production
and marketing transactions, and executes hedges for equity production on behalf
of Questar E&P with a variety of contracts for different periods of time.
As a wholesale marketing entity, Questar Energy Trading concentrates on
markets in the Pacific Northwest, Rocky Mountains, Midwest, Southwest,
California and western Canada that are close to reserves owned by affiliates or
accessible by major pipelines.
To sustain its activities in an increasingly competitive environment in
which sellers and purchasers are becoming more sophisticated, Questar Energy
Trading will endeavor to expand its capabilities. An affiliated new limited
liability company has filed an application with the FERC and obtained
authorization to construct and operate a private storage reservoir in
southwestern Wyoming adjacent to several interstate pipelines and is negotiating
partnerships to obtain additional expertise and access to sophisticated
information technology.
DEVELOPMENT AND PRODUCTION--WEXPRO
We conduct development drilling and provide production services to Questar
Gas through Wexpro. Wexpro was incorporated in 1976 as a subsidiary of Questar
Gas. Questar Gas' efforts to transfer producing properties and leasehold acreage
to Wexpro resulted in protracted regulatory proceedings and legal adjudications
that ended with a court-approved settlement agreement that was effective
August 1, 1981. Wexpro became our subsidiary in 1982.
14
<PAGE>
Unlike our other E&P companies, Wexpro generally does not conduct
exploratory operations and does not acquire leasehold acreage for exploration
activities. It conducts oil and gas development and production activities on
certain producing properties located in the Rocky Mountain region under the
terms of the settlement agreement. Wexpro produces gas from specified properties
for Questar Gas and is reimbursed for its costs plus a return on its investment.
In connection with its operations, Wexpro charges Questar Gas for its cost plus
a specified rate of return (at the end of 1999, 18.9%, and adjusted annually
based on a specified formula) on its net investment in these properties adjusted
for working capital and deferred taxes. Under the terms of the settlement
agreement, Wexpro bears all dry hole costs. The settlement agreement is
monitored by the Utah Division of Public Utilities, the staff of the Public
Service Commission of Wyoming, and experts retained by those agencies. A summary
of the settlement agreement may be found below under the heading "OUR
RELATIONSHIP WITH QUESTAR -Wexpro Settlement Agreement with Questar Gas."
The gas volumes produced by Wexpro for Questar Gas are reflected in Questar
Gas' rates at cost-of-service. Cost-of-service gas produced by Wexpro satisfied
approximately 49% of Questar Gas' system requirements during 1999. Questar Gas
relies upon Wexpro's drilling program to develop the properties from which the
cost-of-service gas is produced. During 1999, the average wellhead cost of
Questar Gas' cost-of-service gas was $1.50 per Dth, which is lower than Questar
Gas' average price for field-purchased gas. To fulfill its obligations to
Questar Gas under the settlement agreement, Wexpro must continue to be a prudent
operator. In 1999, Wexpro produced 38.9 Bcf of natural gas from Questar Gas'
cost-of-service properties and added cost-of-service reserves of 52.5 Bcf
through drilling activities and reserve estimate revisions.
Wexpro participates in drilling activities in response to the demands of
other working interest owners, to protect its rights and to meet the needs of
Questar Gas. Since August 1, 1981, Wexpro has had an ownership interest in the
wells and facilities related to its oil reservoirs and in the wells and
facilities that have been installed to develop and produce gas reservoirs
described above.
GOVERNMENT REGULATION
Our operations are subject to various levels of government controls and
regulation in the United States and Canada.
United States Regulation. In the United States, legislation affecting the
oil and gas industry has been pervasive and is subject to continuing review for
amendment or expansion. Various Federal, state and local laws and regulations
cover environmental, safety and conservation matters. Numerous Federal, state
and local departments and agencies have issued extensive rules and regulations
binding on the oil and gas industry and its individual members, some of which
carry substantial penalties for the failure to comply. These laws and
regulations have a significant impact on oil and gas drilling and production
activities, increase the cost of doing business and, consequently, affect
profitability. Because new legislation affecting the oil and gas industry is
commonplace and existing laws and regulations are frequently amended or
reinterpreted, we are unable to predict the future cost or impact of complying
with these laws and regulations.
Canadian Regulation. The oil and gas industry in Canada is subject to
extensive controls and regulations imposed by various levels of government,
including royalties and incentives payable to the federal and provincial
governments, export licensing, environmental regulation, and regulation of the
acquisition of Canadian businesses and certain natural resource properties by
non-Canadians. We do not expect that any of these controls or regulations will
affect our Canadian operations in a manner materially different than they would
affect other oil and gas companies of similar size.
We take the issue of environmental stewardship very seriously and work
diligently to comply with applicable environmental rules and regulations.
Compliance with environmental laws and regulations has not had a material
adverse effect on our operations or financial condition in the past. However,
because environmental laws and regulations are becoming increasingly stringent,
it is possible that these laws and regulations or any environmental law or
regulation enacted in the future will have a material adverse effect on our
operations or financial condition.
15
<PAGE>
COMPETITION
The oil and gas business is highly competitive. We face competition in all
aspects of our business, including acquiring reserves, leases, licenses and
concessions; obtaining goods, services and labor needed to conduct our
operations and manage our company; and marketing our oil and gas. Intense
competition occurs with respect to marketing and trading, particularly of
natural gas. Our competitors include multinational energy companies, other
independent producers and individual producers and operators, many of which have
greater financial and other resources than we do.
SEASONAL NATURE OF BUSINESS
Generally, but not always, the demand for natural gas decreases during the
summer months and increases during the winter months. Seasonal anomalies such as
mild winters sometimes lessen this fluctuation. In addition, pipelines,
utilities, local distribution companies and industrial users utilize natural gas
storage facilities and purchase some of their anticipated winter requirements
during the summer. This can also lessen seasonal demand fluctuations.
NATURAL GAS AND OIL MARKETING
We market substantially all of our own natural gas and oil production. The
revenues generated by our operations are highly dependent upon the prices of,
and demand for, oil and gas. The price we receive for our crude oil and natural
gas depends upon numerous market factors, the majority of which are beyond our
control, including economic conditions in the United States and elsewhere, the
world political situation, OPEC actions and governmental regulation. The
fluctuation in world oil prices continues to reflect market uncertainty
regarding the balance of world demand for and supply of oil and gas. The
fluctuation of natural gas prices reflects the seasonal swings of storage
inventory, weather conditions, and increasing utilization of natural gas for
electric generation as it affects overall demand. Decreases in the prices of oil
and gas have had, and could have in the future, an adverse effect on our
development and exploration programs, proved reserves, revenues, profitability
and cash flow.
CUSTOMERS
We sell our gas production to a variety of customers including pipelines,
gas marketing firms, industrial users and local distribution companies. We use
existing gathering systems and interstate and intrastate pipelines to consummate
gas sales and deliveries. The principal customers for our crude oil production
are refiners, remarketers and other companies, some of which have pipeline
facilities near the producing properties. In the event pipeline facilities are
not conveniently available, crude oil is trucked to storage, refining or
pipeline facilities.
EMPLOYEES
As of March 15, 2000, we had 417 full-time employees. None of our employees
is represented by organized labor unions. We also engage from time to time
independent consulting petroleum engineers, environmental professionals,
geologists, geophysicists, landmen and attorneys on a fee basis.
16
<PAGE>
OUR RELATIONSHIP WITH QUESTAR
We are parties to several agreements with Questar and its affiliates which
govern different aspects of our relationship with Questar. The more significant
of these are described below.
Tax Sharing Agreement with Questar. Under a tax sharing agreement with
Questar, our revenues and expenses are included in the consolidated Federal tax
return of Questar. We file most of our state income tax returns on a separate
basis. We are allocated Federal tax benefits and charges on the basis of
statutory U.S. tax rates applied to our taxable income or loss included in the
consolidated returns. The benefits of general business credits, foreign tax
credits and any other tax credits are utilized in computing current tax
liability. We are paid for tax benefits generated and utilized in Questar's
consolidated federal and state income tax returns, whether or not we would have
been able to utilize these benefits on a separate tax return. Income tax assets
or liabilities are settled on a quarterly basis.
Wexpro Settlement Agreement with Questar Gas. Wexpro and Questar Gas are
parties to a settlement agreement which became effective August 1, 1981 and sets
forth the rights of Questar Gas' utility operations to share in the results of
Wexpro's operations. The agreement was approved by the Public Service
Commissions of Wyoming and Utah in 1981 and affirmed by the Supreme Court of
Utah in 1983. Major provisions of the settlement agreement include:
o Wexpro continues to hold and operate all oil-producing properties
previously transferred from Questar Gas' nonutility accounts. The oil
production from these properties is sold at market prices, with the
revenues used to recover operating expenses and to give Wexpro a return
on its investment. The after tax rate of return is adjusted annually and
is approximately 13.7%. Any net income remaining after recovery of
expenses and Wexpro's return on investment is divided between Wexpro and
Questar Gas, with Wexpro retaining 46%.
o Wexpro conducts developmental oil drilling on productive oil properties
and bears any costs of dry holes. Oil discovered from these properties is
sold at market prices, with the revenues used to recover operating
expenses and to give Wexpro a return on its investment in successful
wells. The after tax rate of return is adjusted annually and is
approximately 18.7%. Any net income remaining after recovery of expenses
and Wexpro's return on investment is divided between Wexpro and Questar
Gas, with Wexpro retaining 46%.
o Questar Gas uses the amounts it receives from sharing Wexpro's oil income
to reduce natural gas costs to utility customers.
o Wexpro conducts developmental gas drilling on productive gas properties
and bears any costs of dry holes. Natural gas produced from successful
drilling is owned by Questar Gas. Wexpro is reimbursed for the costs of
producing the gas plus a return on its investment in successful wells.
The after tax return allowed Wexpro is approximately 21.7%.
o Wexpro operates Questar Gas' natural gas properties and is reimbursed for
its costs of operating these properties, including a rate of return on
any investment Wexpro makes. This rate of return is currently 13.7%.
Transportation Agreements with Affiliates. Questar Pipeline transports
natural gas produced from properties operated by Wexpro and owned by Questar
Gas. Questar Pipeline also transports volumes of natural gas marketed by Questar
Energy Trading.
Transfer of Gas Gathering Assets. In 1996, Questar Pipeline transferred
approximately $55 million of gas-gathering assets to QGM, which was at the time
its subsidiary. QGM was subsequently transferred to us on July 1, 1996. The
transaction was in the form of a stock dividend payable to Questar, which
contributed the stock to us.
17
<PAGE>
DESCRIPTION OF THE SENIOR NOTES
GENERAL
We will issue the senior notes as a series of debt securities under an
indenture dated as of , 2000, between us and Bank One Trust Company,
NA, as trustee. The following description is only a summary of the material
provisions of the indenture. We urge you to read the indenture because it, and
not this description, defines your rights as holders of the senior notes. A copy
of the proposed form of indenture is available upon request made to us or to the
underwriters. When we refer to securities, we refer to all debt securities that
we have issued or may issue in the future under the indenture and include the
senior notes.
In addition to the senior notes we are offering in this prospectus, the
indenture provides for the issuance of additional securities in one or more
series, without limitation as to aggregate principal amount. The senior notes
will be our unsecured obligations and will rank in parity with all our other
unsecured and unsubordinated indebtedness. Other than a limitation on liens
covenant, the indenture does not contain restrictive covenants which would
require us to maintain certain financial ratios or restrict our ability to incur
additional indebtedness. The covenants contained in the indenture would not
necessarily afford holders of the senior notes protection if a highly-leveraged
transaction involving us were to adversely affect holders.
We are a subholding company whose only material asset is the capital stock
of our subsidiaries. Our operations are conducted through our subsidiaries and
our cash flow will be derived principally from dividends on the capital stock of
our subsidiaries. Claims of creditors of our subsidiaries will have priority
with respect to the assets and earnings of such subsidiaries over the claims of
our creditors, including holders of the senior notes.
DENOMINATIONS AND INTEREST
The senior notes are being issued in an aggregate principal amount of
$150,000,000 and will mature on , 20[ ]. The senior notes will be
issued in fully registered form in denominations of $1,000 and any amount which
is an integral amount multiple of $1,000.
Interest at the annual rate for the senior notes set forth on the cover
page of this prospectus is payable semi-annually on and of each
year, commencing , 2000. We will make each interest payment to the
persons who are registered holders of the notes at the close of business on the
preceding and , respectively. Interest will be computed on the
basis of a 360-day year of twelve months of 30 days each. Interest will begin to
accrue on , 2000. If any interest payment date, maturity date or
redemption date falls on a day that is not a business day, the payment will be
made on the next business day and no interest will accrue for the period from
and after such interest payment date, maturity date or redemption date.
OPTIONAL REDEMPTION
The senior notes may be redeemed in whole or in part at our option at any
time or from time to time upon not less than 30 nor more than 60 days' notice at
a redemption price equal to the greater of (i) 100% of the principal amount of
the senior notes to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest on the senior notes to be
redeemed (not including any portion of such payments of interest accrued as of
the redemption date) discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus [ ] basis points, plus in each case accrued interest on the senior
notes to the date of redemption (provided that interest payments due on or prior
to the redemption date will be paid to the record holders of such senior notes
on the relevant record date).
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the senior notes to be redeemed
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that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of a comparable maturity to the remaining term of the senior notes.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the trustee after consultation with us.
"Comparable Treasury Price" means, with respect to any redemption date,
(A) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by such Reference Treasury Dealer at 3:30 p.m. New York
time on the third business day in The City of New York preceding such redemption
date.
"Reference Treasury Dealer" means at least five primary U.S. Government
securities dealers in The City of New York as we shall select.
Unless we default in payment of the redemption price, on and after the
redemption date interest will cease to accrue on the senior notes or portions
thereof called for redemption. If less than all of the senior notes are to be
redeemed, the trustee will select the senior notes to be redeemed by such method
as the trustee shall deem fair and appropriate.
MANDATORY REDEMPTION; SINKING FUND
There is no sinking fund or mandatory redemption obligation applicable to
the senior notes.
BOOK-ENTRY SYSTEM
The senior notes will be issued in the form of a single global security.
The senior notes will be deposited with the trustee as custodian for The
Depositary Trust Company, or DTC, on behalf of DTC and for so long as DTC or its
nominee is the registered owner of the senior notes, DTC or its nominee, as the
case may be, will be considered the sole holder of the senior notes for all
purposes under the indenture. Except as set forth below, a security may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC.
Upon our issuance of the senior notes, DTC or its nominee will credit the
accounts of persons holding through it on its book-entry registration and
transfer system with the respective principal amounts of the senior notes
represented by the global security. The accounts to be credited will be
designated by the applicable underwriter of such senior notes. Ownership of
beneficial interests in the global security will be limited to persons who have
accounts with DTC, called participants, or persons that hold interests through
participants. Ownership of beneficial interests by participants in the global
security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by DTC or its nominee for the global security.
Ownership of beneficial interest in a global security by persons that hold
interests through participants will be shown on, and the transfer of ownership
will be effected only through, records maintained by such participant. The laws
of some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interest in a global security.
Except as provided below, owners of beneficial interests in senior notes
represented by a global security will not be entitled to have senior notes
represented by the global security registered in their names, will not receive
or be entitled to receive physical delivery of senior notes in definitive form,
known as certificated notes, and will not be considered the owners or holders of
such notes under the indenture.
Senior notes represented by a global security will be exchangeable for
certificated senior notes only if:
o DTC or its nominee notifies us that it is unwilling or unable to
continue as depositary for the global security or we become aware
that DTC has ceased to be a clearing agency registered under
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the Exchange Act and we have not appointed a successor depositary
within 90 days after we receive such notice or become aware of such
ineligibility or
o we, in our sole discretion, determine to discontinue use of the
system of book-entry transfer and to exchange the global security
for certificated notes
Upon any such exchange, the certificated senior notes will be registered in
the names that DTC or its nominee holding the global security may direct.
We will make principal, premium and interest payments on the global
security to DTC or its nominee, as the case may be, as the sole registered owner
and the sole holder of the notes represented thereby for all purposes under the
indenture. DTC's practice is to credit participants' accounts on the applicable
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on such date.
We expect that payments by participants to owners of beneficial interests in a
global security held through such participants will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participant and not of DTC, the trustee or
us, subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal, premium and interest to DTC is our
responsibility and that of the trustee, disbursement of such payments to
participants is the responsibility of DTC, and disbursement of such payments to
the owners of beneficial interests in a global security held through such
participants is the responsibility of such participants. Neither we, the
trustee, the Paying Agent or the Security 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 representing any
notes or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The senior notes will be issued as fully registered securities registered
in the name of Cede & Co., DTC's partnership nominee. DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC was created to hold the securities of its
participants and to facilitate the clearance and settlement among participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in participants'
accounts, thus eliminating the need of physical movement of securities
certificates. Direct participants of DTC include securities brokers and dealers,
including the underwriters, banks, trust companies, clearing corporations and
certain other organizations. DTC is owned by a number of its direct participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and
the National Association of Securities Dealers, Inc. Access to DTC's system is
also available to others, known as indirect participants, such as securities
brokers and dealers, banks and trust companies that clear through or maintain a
direct or indirect custodial relationship with a direct participant, either
directly or indirectly. The rules applicable to DTC and its participants are on
file with the Securities and Exchange Commission.
Purchases of senior notes under DTC's system must be made by or through
direct participants, which will receive a credit for such senior notes on DTC's
records. The ownership interest of each actual purchaser, or beneficial owner,
of each senior note represented by a global security is in turn to be recorded
on the records of direct participants and indirect participants. Beneficial
owners will not receive written confirmation from DTC of their purchase, but
beneficial owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the direct participants or indirect participants through which such
beneficial owner entered into the transaction. Transfer of ownership interests
in the global security are to be accomplished by entries made on the books of
participants acting on behalf of beneficial owners. Beneficial owners of the
global security will not receive certificated notes representing their ownership
interests in the global security, except in the limited circumstances described
above.
To facilitate subsequent transfers, the global security deposited with, or
on behalf of, DTC is registered in the name of DTC's nominee, Cede & Co. The
deposit of the global security with, or on behalf of, DTC and its registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
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knowledge of the actual beneficial owners of the global security; DTC's records
reflect only the identity of the direct participants to whose accounts senior
notes are credited, which may or may not be the beneficial owners. The
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the senior
notes. Under its usual procedures, DTC mails an omnibus proxy to us as soon as
possible after the applicable record date. The omnibus proxy assigns Cede &
Co.'s consenting or voting rights to those direct participants to whose account
the senior notes are credited on the applicable record date (identified in a
listing attached to the omnibus proxy).
If applicable, redemption notices will be sent to Cede & Co. If less than
all of the senior notes are being redeemed, DTC's practice is to determine by
lot the amount of the interest of each direct participant in such issue to be
redeemed.
No service charge will be made for the registration of transfer or exchange
of senior notes, but we may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith.
Senior notes may be surrendered for registration of transfer or exchange at our
offices or agencies maintained for such purpose, which shall initially be the
Corporate Trust Office of the trustee in Chicago, Illinois. In the event that
certificated senior notes are issued or if DTC shall so require, we will be
required to appoint a paying agent and security registrar in The City of New
York. We may appoint additional paying agents and security registrar and may
change any paying agent or security registrar, subject to our obligation under
the indenture to maintain a paying agent and security registrar in Chicago,
Illinois and, in the event that certificated senior notes are issued or if DTC
shall so require, The City of New York. At our option, payment of interest on
certificated senior notes may be made by check mailed to the addresses of the
persons entitled thereto as they appear on the security register.
LIMITATIONS ON LIENS
Subject to certain exceptions, we will not, and will not permit any
Subsidiary to, create, assume or suffer to exist, otherwise than in favor of us
or a Subsidiary, any mortgage, pledge, lien, encumbrance, or security interest
(collectively, "Liens") upon any of our properties or assets or upon any income
or profits therefrom unless the senior notes shall be equally and ratably
secured. This prohibition will not apply to:
o Liens existing as of the date of the indenture;
o any purchase money mortgage or Lien created to secure all or part of the
purchase price of any property (or to secure a loan made to us or any
Subsidiary to enable it to acquire such property), provided that such
Lien shall extend only to the property so acquired, improvements thereon,
replacements thereof and the income or profits therefrom;
o Liens on any property at the time of the acquisition thereof, whether or
not assumed by us or a Subsidiary; provided that such Lien shall extend
only to the property so acquired, improvements thereon, replacements
thereof and income or profits therefrom;
o Liens on property or any contract for the sale of any product or service,
or any rights thereunder or any proceeds therefrom, acquired or
constructed by us or a Subsidiary and created within one year after the
later of:
o the completion of such acquisition or construction, or
o the commencement of operation of the property,
provided that such Lien shall extend only to the property so
acquired or constructed, improvements
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thereon, replacements thereof and income or profits therefrom;
o Liens on the property or assets of Subsidiaries outstanding at the time
they become Subsidiaries;
o Liens created or assumed by us or a Subsidiary on coal, geothermal, oil,
natural gas, inert gas, other hydrocarbon or mineral properties owned or
leased by us or a Subsidiary to secure loans to us or a Subsidiary, for
the purpose of developing such properties;
o Liens on any investment (as defined in the indenture) of ours or that of
a Subsidiary of ours in any Person other than a Subsidiary or on any
security representing any investment of ours or a Subsidiary of ours;
o any Lien not otherwise permitted by the indenture, provided that after
giving effect to such Lien the sum of all indebtedness of us and our
Subsidiaries secured by Liens not otherwise permitted by the indenture
and all Attributable Debt of us and our Subsidiaries (to the extent not
included in indebtedness secured by Liens not otherwise permitted) does
not exceed 10% of Consolidated Capitalization;
o any refunding or extension of maturity, in whole or in part, of any
obligation or indebtedness secured by certain permitted Liens, provided
that the principal amount of the obligation or indebtedness secured by
such refunding or extension shall not exceed the principal amount of the
obligation or indebtedness then outstanding and shall be limited in lien
to the same or substituted property and after-acquired property that
secured the refunded or extended obligation or indebtedness;
o Liens upon any office equipment, data processing equipment or any motor
vehicles, tractors or trailers;
o Liens of or upon or in current assets of ours or a Subsidiary of ours
created or assumed to secure indebtedness incurred in the ordinary
course of business;
o any Lien which is payable, both with respect to principal and interest,
solely out of the proceeds of natural gas, oil, coal, geothermal
resources, inert gas, hydrocarbons or minerals to be produced from the
property subject thereto and to be sold or delivered by us or a
Subsidiary of ours;
o Liens to secure indebtedness incurred to finance advances made by us or
any Subsidiary of ours to any third party for the purpose of financing
oil, natural gas, hydrocarbon, inert gas or other mineral exploration or
development, provided that such Liens shall extend only to our
receivables or that of such Subsidiary in respect of such advances; and
o any rights reserved in others to take or reserve any part of the natural
gas, oil, coal, geothermal resources, inert gas, hydrocarbons or
minerals produced at any time on any property of ours or a Subsidiary of
ours.
Also excepted from the general prohibition are various other liens, such as
mechanics' or materialmen's liens, certain governmental liens, leases, certain
judgment liens, and certain liens arising in connection with leases, easements
and rights-of-way.
DEFINITIONS
Certain terms used in the indenture are defined and are used in this
prospectus as follows:
"Attributable Debt" means, as of the date of determination, the present
value of net rent for the remaining term of a capital lease, determined in
accordance with generally accepted accounting principles in the United States
("GAAP"), which is part of a Sale and Leaseback Transaction (as defined),
including any periods for which the lessee has the right to renew or extend the
lease. For purposes of the foregoing, "net rent" means the sum of capitalized
rental payments required to be paid by the lessee, other than amounts required
to be paid by the lessee for maintenance, repairs, insurance, taxes,
assessments, energy, fuel, utilities and similar charges. In the case of a
capital lease which is terminable by the lessee upon the payment of a
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penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered to be required to be paid under such lease subsequent
to the first date upon which it may be so terminated.
"Consolidated Capitalization" means, without duplication, the sum of:
o the principal amount of our Consolidated Funded Debt and that of our
Subsidiaries at the time outstanding,
o the total capital represented by our capital stock and that of our
Subsidiaries at the time outstanding based, in the case of stock having
par value, upon its par value, and in the case of stock having no par
value, upon the value stated on our books,
o the total amount of (or less the amount of any deficit in) our retained
earnings and paid-in capital and that of our Subsidiaries,
o reserves for deferred federal and state income taxes arising from timing
differences, and
o Attributable Debt, all as shown on a consolidated balance sheet of us and
our Subsidiaries prepared in accordance with GAAP; provided that in
determining the consolidated retained earnings and paid-in capital of us
and our Subsidiaries no effect shall be given to any unrealized write-up
or write-down in the value of assets or any amortization thereof, except
for accumulated provisions for depreciation, depletion, amortization and
property retirement which shall have been created by charges made by us
or any of our Subsidiaries on our or their books.
"Consolidated Funded Debt" means our Funded Debt and that of our
Subsidiaries, consolidated in accordance with GAAP.
"Funded Debt" means all Indebtedness that will mature, pursuant to a
mandatory sinking fund or prepayment provision or otherwise, and all
installments of Indebtedness that will fall due, more than one year from the
date of determination. In calculating the maturity of any Indebtedness, there
shall be included the term of any unexercised right of the debtor to renew or
extend such Indebtedness existing at the time of determination.
"Indebtedness" means all items of indebtedness for borrowed money (other
than unamortized debt discount and premium) which would be included in
determining total liabilities as shown on the liability side of a balance sheet
prepared in accordance with GAAP as of the date as of which Indebtedness is to
be determined, and shall include indebtedness for borrowed money (other than
unamortized debt discount and premium) with respect to which we or any
Subsidiary of ours customarily pays interest secured by any mortgage, pledge or
other lien or encumbrance of or upon, or any security interest in, any
properties or assets owned by us or any Subsidiary of ours, whether or not the
Indebtedness secured thereby shall have been assumed, and shall also include
guarantees of Indebtedness of others; provided that in determining our
Indebtedness or that of any of our Subsidiaries there shall be included the
aggregate liquidation preference of all outstanding securities of any Subsidiary
senior to its Common Stock that are not owned by us or a Subsidiary of ours; and
provided, further, that Indebtedness of any Person shall not include the
following:
o any indebtedness evidence of which is held in treasury (but the
subsequent resale of such indebtedness shall be deemed to constitute the
creation thereof); or
o any particular indebtedness if, upon or prior to the maturity thereof,
there shall have been deposited with a depository (or set aside and
segregated, if permitted by the instrument creating such indebtedness),
in trust, money (or evidence of such indebtedness as permitted by the
instrument creating such indebtedness) in the necessary amount to pay,
redeem or satisfy such indebtedness; or
o any indebtedness incurred to finance oil, natural gas, hydrocarbon, inert
gas or other mineral exploration or development to the extent that the
issuer thereof has outstanding advances to finance oil, natural gas,
hydrocarbon, inert gas or other mineral exploration or development, but
only to the extent such advances are not in default; or
o any indebtedness incurred without recourse to us or any of our
Subsidiaries; or
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o any indebtedness incurred to finance advance payments for gas (pursuant
to take-or-pay provisions or otherwise), but only to the extent that such
advance payments are pursuant to gas purchase contracts entered into in
the normal course of business; or
o any amount (whether or not included in determining total liabilities as
shown on the liability side of a balance sheet prepared in accordance
with GAAP) representing capitalized rent under any lease; or
o any indirect guarantees or other contingent obligations in respect of
indebtedness of other Persons, including agreements, contingent or
otherwise, with such other Persons or with third parties with respect to,
or to permit or assure the payment of, obligations of such other Persons,
including, without limitation, agreements to purchase or repurchase
obligations of such other Persons, to advance or supply funds to, or to
invest in, such other Persons, or to pay for property, products or
services of such other Persons (whether or not conveyed, delivered or
rendered); demand charge contracts, through-put, take-or-pay, keep-well,
make-whole or maintenance of working capital or similar agreements; or
guarantees with respect to rental or similar periodic payments to be made
by such other Persons.
"Sale and Leaseback Transaction" means an arrangement in which we or one of
our Subsidiaries sells any of our or their property which was placed into
service more than 120 days prior to such sale to a Person and leases it back
from that Person within 180 days of the sale.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Nothing contained in the indenture or in any of the senior notes will
prevent any consolidation or merger of us with or into any other Person (whether
or not affiliated with us), or successive consolidations or mergers in which we
or our successor shall be a party, or will prevent any conveyance, transfer or
lease of our property as an entirety or substantially as an entirety, to any
other Person (whether or not affiliated with us); provided, however, that:
o in case of such a transaction, the entity formed by such consolidation or
into which we are merged, or the Person which acquires or leases our
properties and assets substantially as an entirety shall be a
corporation, partnership, limited liability company, association, company
or business trust organized under the laws of the United States of
America, any state thereof or the District of Columbia and shall
expressly assume the due and punctual payment of the principal of,
premium, if any, and interest on all the senior notes and the performance
of every other covenant of the indenture;
o immediately after giving effect to such transaction, no event which,
after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing; and
o each of us and the successor Person shall have delivered to the trustee
an Officers' Certificate and an Opinion of Counsel, each stating that
such transaction complies with the requirements in the previous two
bullets, and that all conditions precedent relating to such transaction
have been complied with.
EVENTS OF DEFAULT
The following are Events of Default under the indenture with respect to any
senior notes:
o failure to pay the principal of, or premium, if any, on any senior note
when due;
o failure to pay any interest installment on any senior note when due, in
each case, continued for 30 days;
o failure to perform any of our other covenants, continued for 90 days
after written notice as provided in the indenture;
o the occurrence of an event of default in other indebtedness of ours
(including securities other than the senior notes) which results in
indebtedness in excess of $10,000,000 principal amount being due and
payable prior to maturity, and such acceleration is not rescinded or
annulled or such indebtedness is not discharged after written notice as
provided in the indenture; and
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o certain events of bankruptcy, insolvency or reorganization.
If an Event of Default with respect to senior notes at the time outstanding
shall occur and be continuing, then and in every such case, unless the principal
of all the senior notes has already become due and payable, the trustee or the
holders of at least 33 1/3% in principal amount of the outstanding senior notes
may declare, by a notice in writing to us, and to the trustee if given by
holders, the entire principal amount of all the outstanding senior notes to be
due and payable immediately. At any time after such declaration of acceleration
has been made, but before a judgment or decree for payment of the money due has
been obtained by the trustee, the holders of a majority in principal amount of
the outstanding senior notes, by written notice to us and the trustee, may, in
certain circumstances, rescind and annul such declaration.
No holder of any senior notes will have any right to institute any
proceeding with respect to the indenture or for any remedy under the indenture,
unless such holder previously shall have given to the trustee written notice of
a continuing Event of Default and unless also the holders of at least 25% of the
aggregate principal amount of outstanding senior notes shall have made written
request to and have offered reasonable indemnity upon, the trustee, to institute
such proceeding, and the trustee shall not have received direction inconsistent
with such request in writing by the holders of a majority in principal amount of
outstanding senior notes and shall have neglected or refused to institute such
proceeding within 60 days. However, the rights of any holder of any senior notes
to enforce the payment of principal, premium, if any, and interest due on such
senior notes on or after the dates expressed in such senior notes may not be
impaired or affected.
We must furnish the trustee within 120 days after the end of each fiscal
year a statement signed by one of certain of our officers stating that a review
of our company's activities during that year and our performance under the
indenture and the terms of the senior notes has been made, and, to the best of
the knowledge of the signatory, based on such review, we have complied with all
conditions and covenants of the indenture, or, if we are in default, specifying
the default.
WAIVER, MODIFICATION AND AMENDMENT
The holders of a majority in principal amount of the outstanding senior
notes may waive certain past defaults, except a default in the payment of the
principal of, premium, if any, or interest on any senior note or in respect of
any covenant or provision in the indenture which under the terms of the
indenture cannot be modified without the consent of all holders of outstanding
senior notes. The holders of a majority in aggregate principal amount of
outstanding senior notes may waive our compliance with certain restrictive
provisions.
We and the trustee may modify and amend the indenture with the consent of
the holders of a majority in aggregate principal amount of the outstanding
senior notes provided that no such modification or amendment may, without the
consent of the holder of each senior note affected thereby:
o change the Stated Maturity of the principal of, or any installment of
principal of, or interest on, any senior note;
o reduce the principal of, premium, if any, or interest on, or any premium
payable upon the redemption of, any senior note;
o change the Place of Payment or change the currency of payment of
principal, premium, if any, or interest on, any senior note;
o impair the right to institute suit for the enforcement of any payment on
or with respect to any senior note;
o reduce the percentages of holders of outstanding senior notes specified
in this or the preceding paragraph; or
o effect certain other modifications or amendments described in the
indenture.
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In the case of provisions of the indenture affecting other series of
securities as well as the senior notes, the holders of the senior notes will be
treated as a separate class of securities for purposes of determining whether
consent or waiver of a majority of holders has been obtained.
DEFEASANCE AND COVENANT DEFEASANCE
The indenture provides that we may elect either:
o to defease and be discharged from any and all obligations with respect to
the senior notes ("defeasance"), or
o to be released from our obligations with respect to such senior notes
described above under "Limitations on Liens" and "Consolidation, Merger
and Sale of Assets" ("covenant defeasance"), upon the irrevocable deposit
with the trustee, in trust for such purpose, of money and/or U.S.
Government Obligations (as defined in the indenture) which through the
payment of principal and interest in accordance with their terms will
provide money, in an amount sufficient to pay the principal of, premium,
if any, and interest on such senior notes on the scheduled due date
therefor. Defeasance and covenant defeasance are each conditioned upon
our delivery to the trustee of an Opinion of Counsel to the effect that
the holders of the senior notes will have no federal income tax
consequences as a result of such deposit.
CONCERNING THE TRUSTEE
Bank One Trust Company, NA is the trustee under the indenture and is an
affiliate of Banc One Capital Markets, Inc. The indenture contains certain
limitations on the rights of the trustee, should it become a creditor of ours,
to obtain payment of claims in certain cases or to realize on certain property
received in respect of any such claim as security or otherwise. The trustee will
be permitted to engage in other transactions with us; however, if it acquires a
conflicting interest it must eliminate such conflict or resign or otherwise
comply with the Trust Indenture Act of 1939, as amended. The indenture also
provides that we will indemnify the trustee against loss, liability or expense
incurred without negligence or bad faith on the part of the trustee arising out
of or in connection with the trust under the indenture. The trustee is an
affiliate of Bank One, NA, which (1) participates in our $295 million Credit
Agreement, (2) is a creditor of our parent company, Questar, and (3) performs
routine banking functions for us.
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UNDERWRITING
We intend to offer the senior notes through the underwriters named below.
Subject to the terms and conditions contained in a purchase agreement between us
and the underwriters, we have agreed to sell to the underwriters and the
underwriters severally have agreed to purchase from us, the principal amount of
the senior notes listed opposite their names below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
- ------------------------------------------------------------------------------ ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................................... $
Banc One Capital Markets, Inc. ...............................................
Banc of America Securities LLC................................................
TD Securities (USA) Inc. .....................................................
------------
Total............................................................ $150,000,000
============
</TABLE>
The underwriters have agreed to purchase all of the senior notes sold
pursuant to the purchase agreement if any of these senior notes are purchased.
If an underwriter defaults, the purchase agreement provides that the purchase
commitments of the nondefaulting underwriters may be increased or the purchase
agreement may be terminated.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the
underwriters may be required to make in respect of those liabilities.
The underwriters are offering the senior notes, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of legal
matters by their counsel, including the validity of the senior notes, and other
conditions contained in the purchase agreement, such as the receipt by the
underwriters of officer's certificates and legal opinions. The underwriters
reserve the right to withdraw, cancel or modify offers to the public and to
reject orders in whole or in part.
COMMISSIONS AND DISCOUNTS
The underwriters have advised us that they propose initially to offer the
senior notes to the public at the public offering price on the cover page of
this prospectus, and to dealers at that price less a concession not in excess of
% of the principal amount of the senior notes. The underwriters may allow,
and the dealers may reallow, a discount not in excess of % of the principal
amount of the senior notes to other dealers. After the initial public offering,
the public offering price, concession and discount may be changed.
The expenses of the offering, not including the underwriting discount, are
estimated to be $565,000 and are payable by us.
NO SALES OF SIMILAR SECURITIES
We have agreed, with exceptions, not to sell or transfer any debt
securities for 30 days after the date of this prospectus without first obtaining
the written consent of Merrill Lynch. Specifically we have agreed not to
directly or indirectly:
o offer, pledge, sell, or contract to sell any debt securities,
o sell any option or contract to purchase any debt securities,
o purchase any option or contract to sell any debt securities,
o grant any option, right or warrant for the sale of any debt securities,
o file a registration statement for any debt securities, or
o lend or otherwise dispose of or transfer any debt securities.
27
<PAGE>
This lockup provision applies to debt securities and to any securities
convertible into or exercisable or exchangeable for debt securities.
NEW ISSUE OF SENIOR NOTES
The senior notes are a new issue of securities with no established trading
market. We do not intend to apply for listing of the senior notes on any
national securities exchange or for quotation of the senior notes on any
automated dealer quotation system. We have been advised by the underwriters that
they presently intend to make a market in the senior notes after completion of
the offering. However, they are under no obligation to do so and may discontinue
any market-making activities at any time without any notice. We cannot assure
the liquidity of the trading market for the senior notes or that an active
public market for the senior notes will develop. If an active public trading
market for the senior notes does not develop, the market price and liquidity of
the senior notes may be adversely affected.
NASD REGULATIONS
Affiliates of Banc One Capital Markets, Inc., Banc of America Securities
LLC and TD Securities (USA) Inc. are lenders on our commercial bank term debt
and, upon application of the net proceeds of this offering, will receive their
proportionate share of the amount of this debt to be repaid. See "USE OF
PROCEEDS." Because more than ten percent of the net proceeds of the offering may
be paid to members or affiliates of members of the National Association of
Securities Dealers, Inc. participating in the offering, the offering will be
conducted in accordance with NASD Conduct Rule 2710(c)(8).
OTHER RELATIONSHIPS
Merrill Lynch has been a named agent for the sale of medium-term notes of
Questar Gas and Questar Pipeline, and is a commercial paper issue agent for
Questar.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Connie C. Holbrook,
Vice President, General Counsel and Corporate Secretary of Questar, 180 East 100
South Street, Salt Lake City, Utah 84111, and by Skadden, Arps, Slate, Meagher &
Flom LLP, Four Times Square, New York, New York 10036. Brown & Wood LLP, 555
California Street, San Francisco, California 94104, will act as counsel for the
underwriters. In rendering their opinion, Brown & Wood LLP may rely upon the
opinion of Ms. Holbrook as to all matters governed by Utah law. As of
December 31, 1999, Ms. Holbrook beneficially owned 208,795 shares of common
stock of Questar (including currently exercisable options to purchase 114,196
shares of common stock of Questar).
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements at December 31, 1999 and 1998 and for each of the three
years in the period ended December 31, 1999 included in our registration
statement on Form 10 dated April 12, 2000, as set forth in their report, which
is incorporated by reference in this prospectus and elsewhere in the
registration statement. Our consolidated financial statements are incorporated
by reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
28
<PAGE>
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We will file annual, quarterly and special reports and other information
with the Securities and Exchange Commission. You may read and copy any document
we file at the public reference facilities of the SEC located at 450 Fifth
Street N.W., Washington, D.C. 20549. You may obtain information on the operation
of the SEC's public reference facilities by calling the SEC at 1-800-SEC-0330.
You can also access copies of this material electronically on the SEC's home
page on the World Wide Web at http://www.sec.gov.
This prospectus is part of a registration statement (Registration No.
333- ) we filed with the SEC. The SEC permits us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents filed with the
SEC. The information incorporated by reference is considered to be part of this
prospectus, and information that we file with the SEC after the date of this
prospectus will automatically update and supersede this information. We
incorporate by reference our registration statement on Form 10 dated April 12,
2000, which we filed with the SEC. We also incorporate by reference any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, until we sell all of the senior
notes being registered or until this offering is otherwise terminated.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to the documents unless exhibits are
specifically incorporated by reference in those documents. You should direct
requests for copies to: Corporate Secretary, Questar Market Resources, Inc., 180
East 100 South Street, Salt Lake City, Utah 84111; telephone number
(801) 324-5202.
29
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Through and including , 2000, all dealers effecting transactions in
these securities, whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
$150,000,000
QUESTAR MARKET RESOURCES, INC.
% SENIOR NOTES DUE 20 [ ]
----------------------
PROSPECTUS
----------------------
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
TD SECURITIES
, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses payable by the Company
in connection with the offering of the senior notes registered hereunder. All
such fees and expenses other than the Securities and Exchange Commission
Registration Fee are estimated.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............... $ 39,600
Printing Expenses................................................. 20,000
Legal Fees and Expenses........................................... 265,000
Accounting Fees and Expenses...................................... 160,000
Blue Sky Fees and Expenses........................................ 5,000
Trustee's Fees and Expenses....................................... 6,000
Rating Agency Fees................................................ 65,000
Miscellaneous..................................................... 4,400
--------
Total...................................................... $565,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 16-10a-901 through 16-10a-909 of the Utah
Revised Business Corporation Act, which provides for indemnification of
directors and officers in certain circumstances.
The Company's Bylaws provide that the Company may voluntarily indemnify any
individual made a party to a proceeding because he is or was a director,
officer, employee or agent of the Company against liability incurred in the
proceeding, but only if the Company has authorized the payment in accordance
with the applicable statutory provisions of the Utah Revised Business
Corporation Act (Sections 16-10a-902, 16-10a-904 and 16-10a-907) and a
determination has been made in accordance with the procedures set forth in such
provision that such individual conducted himself in good faith, that he
reasonably believed his conduct, in his official capacity with the Company, was
in its best interests and that his conduct, in all other cases, was at least not
opposed to the Company's best interests, and that he had no reasonable cause to
believe his conduct was unlawful in the case of any criminal proceeding. The
foregoing indemnification in connection with a proceeding by or in the right of
the Company is limited to reasonable expenses incurred in connection with the
proceeding, which expenses may be advanced by the Company. The Company's Bylaws
provide that the Company may not voluntarily indemnify a director, officer,
employee or agent of the Company in connection with a proceeding by or in the
right of the Company in which such individual was adjudged liable to the Company
or in connection with any other proceeding charging improper personal benefit to
him, whether or not involving action in his official capacity, in which he was
adjudged liable on the basis that personal benefit was improperly received by
him.
The Company's Bylaws provide further that the Company shall indemnify a
director, officer, employee or agent of the Company who was wholly successful,
on the merits or otherwise, in defense of any proceeding to which he was a party
because he is or was such a director, officer, employee or agent, against
reasonable expenses incurred by him in connection with the proceeding.
The Company's Bylaws further provide that no director of the Company shall
be personally liable to the Company or its stockholders for monetary damages for
any action taken or any failure to take any action, as a director, except
liability for (a) the amount of a financial benefit received by a director to
which he is not entitled; (b) an intentional infliction of harm on the Company
or the shareholders; (c) for any action that would result in liability of the
director under the applicable statutory provision concerning unlawful
distributions; or (d) an intentional violation of criminal law.
Questar Corporation, the Company's parent, maintains an insurance policy on
behalf of the officers and directors of the Company pursuant to which (subject
to the limits and limitations of such policy) the officers and directors are
insured against certain expenses in connection with the defense of actions or
proceedings, and certain liabilities which might be imposed as a result of such
actions or proceedings, to which any of them is made a party by reason of being
or having been a director or officer.
II-1
<PAGE>
Reference is made to Sections 6 and 7 of the Purchase Agreement, the form
of which is filed as Exhibit 1.01 hereto, for the description of the
indemnification and contribution arrangements for this offering.
ITEM 16. EXHIBITS.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1.01 -- Form of Purchase Agreement.
4.01 -- Form of Indenture, dated as of , 2000, between the Company and Bank One Trust Company,
NA, as Trustee, relating to the Company's Debt Securities.
4.02 -- Form of Senior Note.
5.01 -- Opinion of Connie C. Holbrook, Esq.
5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
12.01 -- Statement of Computation of Ratio of Earnings to Fixed Charges.
23.01 -- Consent of Ernst & Young LLP.
23.02 -- Consent of Connie C. Holbrook, Esq. (included in Exhibit 5.01).
23.03 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.02).
24.01 -- Form of Power of Attorney (included on signature page to the Registration Statement).
25.01 -- Statement of Eligibility of Trustee on Form T-1.
</TABLE>
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
B. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions of Utah law and the
registrant's bylaws, a summary of which is set forth in Item 15 hereof,
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 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
such 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 Act
and will be governed by the final adjudication of such issue.
C. The undersigned registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Company pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of the time
it was declared effective.
2. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
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 the City of Salt Lake, State of Utah, on the 12th day of April,
2000.
QUESTAR MARKET RESOURCES, INC.
By: /s/ G.L. Nordloh
----------------------------------
G.L. Nordloh
President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of G. L. Nordloh and S.E. Parks his or her
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement (or any other registration statement
for the same offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
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:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------------ ---------------
<S> <C> <C>
/s/ R.D. CASH Chairman of the Board and Director April 12, 2000
- ------------------------------------------
R.D. Cash
/s/ G.L. NORDLOH President and Chief Executive Officer; April 12, 2000
- ------------------------------------------ Director (Principal Executive Officer)
G.L. Nordloh
/s/ S.E. PARKS Vice President, Treasurer and Chief Financial April 12, 2000
- ------------------------------------------ Officer (Principal Financial Officer)
S.E. Parks
/s/ B. KURTIS WATTS Manager, Accounting (Principal April 12, 2000
- ------------------------------------------ Accounting Officer)
B. Kurtis Watts
/s/ TERESA BECK Director April 12, 2000
- ------------------------------------------
Teresa Beck
/s/ PATRICK J. EARLY Director April 12, 2000
- ------------------------------------------
Patrick J. Early
/s/ CLYDE M. HEINER Director April 12, 2000
- ------------------------------------------
Clyde M. Heiner
/s/ WILLIAM N. JONES Director April 12, 2000
- ------------------------------------------
William N. Jones
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
1.01 -- Form of Purchase Agreement.
4.01 -- Form of Indenture, dated as of , 2000, between the Company and Bank One Trust
Company, NA, as Trustee, relating to the Company's Debt Securities.
4.02 -- Form of Senior Note.
5.01 -- Opinion of Connie C. Holbrook, Esq.
5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
12.01 -- Statement of Computation of Ratio of Earnings to Fixed Charges.
23.01 -- Consent of Ernst & Young LLP.
23.02 -- Consent of Connie C. Holbrook, Esq. (included in Exhibit 5.01).
23.03 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.02).
24.01 -- Form of Power of Attorney (included on signature page to the Registration Statement).
25.01 -- Statement of Eligibility of Trustee on Form T-1.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
QUESTAR MARKET RESOURCES, INC.
(a Utah corporation)
Senior Notes due 20__
PURCHASE AGREEMENT
Dated: __________, 2000
================================================================================
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. Representations and Warranties.............................................3
SECTION 2. Sale and Delivery to Underwriters; Closing.................................7
SECTION 3. Covenants of the Company...................................................8
SECTION 4. Payment of Expenses.......................................................10
SECTION 5. Conditions of Underwriters' Obligations...................................11
SECTION 6. Indemnification...........................................................16
SECTION 7. Contribution..............................................................18
SECTION 8. Representations, Warranties and Agreements to Survive Delivery............20
SECTION 9. Termination of Agreement..................................................20
SECTION 10. Default by One or More of the Underwriters...............................20
SECTION 11. Notices..................................................................21
SECTION 12. Parties..................................................................21
SECTION 13. Governing Law and Time...................................................21
SECTION 14. Effect of Headings.......................................................21
SCHEDULES
Schedule A - List of Underwriters............................................Sch. A-1
Schedule B - Pricing Information.............................................Sch. B-1
Schedule C - List of Subsidiaries............................................Sch. C-1
</TABLE>
<PAGE>
Draft of March 30, 2000
QUESTAR MARKET RESOURCES, INC.
(a Utah corporation)
$150,000,000
Senior Notes due 20__
PURCHASE AGREEMENT
__________, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Banc of America Securities LLC
Banc One Capital Markets, Inc.
TD Securities (USA) Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Questar Market Resources, Inc., a Utah corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch and Banc of America Securities LLC, Banc One
Capital Markets, Inc. and TD Securities (USA) Inc. are acting as representatives
(in such capacity, the "Representatives"), with respect to the issue and sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective principal amounts set forth in Schedule A of
$150,000,000 aggregate principal amount of the Company's Senior Notes due 20__
(the "Securities"). The Securities are to be issued pursuant to an indenture
dated as of __________, 2000 (the "Indenture") between the Company and Bank One
Trust Company, NA, as trustee (the "Trustee"). The term "Indenture," as used
herein, includes the Officer's Certificate (as defined in the Indenture)
establishing the form and terms of the Securities pursuant to Sections 201 and
301 of the Indenture.
1
<PAGE>
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-_____) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated _____, 2000 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be
2
<PAGE>
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the "1934 Act") which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations"), and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or any post-effective amendment thereto or
Prospectus or any amendment or supplement thereto made in reliance upon
and in conformity with information furnished to the Company in writing
by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
3
<PAGE>
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, when they became effective or at the time they were
or hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and at the
Closing Time, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Accountants. The accountants who certified the financial
statements and supporting schedules included or incorporated by
reference in the Prospectus are, to the best knowledge of the Company,
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) Financial Statements. The financial statements included
in the Registration Statement and the Prospectus present fairly the
financial position of the Company and its consolidated subsidiaries as
at the dates indicated and the results of their operations for the
periods specified; except as otherwise stated in the Registration
Statement, financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis;
and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The
selected financial data and the summary financial information included
in the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) Material Changes or Material Transactions. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (a)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
(b) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (c) except for the
regular dividends, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Due Incorporation and Qualification. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Utah with corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to
4
<PAGE>
so qualify or be in good standing would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse
Effect").
(vii) Subsidiaries. Each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect; and all of the issued and
outstanding capital stock of each subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(viii) Capital Stock. The shares of issued and outstanding
common stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Validity of the Indenture and the
Securities. The Securities have been duly authorized and, at the
Closing Time, will have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor
as provided in this Agreement, will constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and general equitable
principles, and will be entitled to the benefits provided by the
Indenture, which will be substantially in the form filed as an exhibit
to the Registration Statement; the Indenture has been duly authorized
by the Company and the Indenture will be duly qualified under the 1939
Act and, when duly executed and delivered by the Company and the
Trustee, will constitute a valid and legally binding instrument of the
Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and general equitable principles; and the Securities
and the Indenture conform to the descriptions thereof in the
Prospectus.
(xi) No Defaults; Regulatory Approvals. Neither the Company
nor any of its subsidiaries is in violation of its charter or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be
bound, or to which any
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of the property or assets of the Company or any of its subsidiaries is
subject, which violations or defaults in the aggregate would have a
Material Adverse Effect; and the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
have been duly authorized by all necessary corporate action and will
not conflict with or constitute a breach of, or a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries,
except as expressly contemplated in the Indenture or except as would
not have a Material Adverse Effect, pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or
bylaws of the Company or, except as would not have a Material Adverse
Effect, any applicable law, administrative regulation or administrative
or court decree.
(xii) Legal Proceedings; Contracts. There is no action, suit
or proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against, the Company or any of its subsidiaries, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein) or which could reasonably be expected to result in
any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, or which
would materially and adversely affect the properties or assets thereof
or which would materially and adversely affect the consummation of the
transactions contemplated by this Agreement or the performance by the
Company of its obligation hereunder; all pending legal or governmental
proceedings to which the Company of any subsidiary is a party or which
any of their property is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material and would not cause a Material Adverse Effect; and there are
no contracts or documents of the Company or any of its subsidiaries
which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been so filed.
(xiii) No Governmental Authorization. No authorization,
approval or consent of any court or governmental authority or agency is
necessary in connection with the sale of the Securities hereunder,
except such as may be required under the 1933 Act, the 1933 Act
Regulations and state securities laws and except as have been obtained.
(xiv) Possession of Permits. The Company and its subsidiaries
possess such valid franchises, certificates of convenience and
necessity, easements, rights-of-way, operating rights, licenses,
permits, consents, authorizations and orders of governmental political
subdivisions or regulatory authorities as are necessary to conduct the
business now operated by them, except those the failure of which to
possess would not have a Material Adverse Effect, and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification thereof which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding would have a Material Adverse Effect.
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(xv) Investment Company Act. Neither the Company nor any of
its subsidiaries is regulated or required to be registered as an
"investment company" under the Investment Company Act of 1940, as
amended (the "1940 Act").
(xvi) Ratings. The Securities are rated Baa3 by Moody's
Investors Service, Inc. and BBB+ by Standard & Poor's Ratings Services,
or such other rating as to which the Company shall have most recently
notified the Underwriters pursuant to Section 5(i) hereof.
(b) Additional Certifications. Any certificate signed by any director
or officer of the Company and delivered to the Underwriters or to counsel for
the Underwriters shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Brown & Wood
LLP, 555 California Street, San Francisco, California 94104, or at such other
place as shall be agreed upon by the Representatives and the Company, at 7:00
A.M. (California time) on the third business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. Merrill Lynch, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Securities shall
be in such denominations ($1,000 or integral multiples thereof) and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time.
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The Securities will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Representatives immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission concerning the Registration Statement, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes.
The Company will promptly effect the filings necessary pursuant to Rule
424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company
will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Representatives
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object. Such consent does not constitute
a waiver of any of the conditions set out in Section 5.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be
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<PAGE>
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations, the 1934
Act and the 1934 Act Regulations and the 1939 Act and the 1939 Act
Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If
at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the reasonable opinion of
such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request. Such consent
does not constitute a waiver of any of the conditions set out in
Section 5.
(f) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states
and other jurisdictions as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than
one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement or such shorter
period as is necessary to complete the distribution of the Securities;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction
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<PAGE>
to continue such qualification in effect for a period of not less than
one year from the effective date of the Registration Statement and any
Rule 462(b) Registration Statement. The Company will also supply the
Underwriters with such information as is necessary for the
determination of the legality of the Securities for investment under
the laws of such jurisdictions as the Underwriters may request.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds".
(i) Restriction on Sale of Securities. During a period of 30
days from the date of the Prospectus, the Company will not, without the
prior written consent of Merrill Lynch, directly or indirectly, issue,
sell, offer or contract to sell, grant any option for the sale of, or
otherwise transfer or dispose of, any debt securities of the Company
other than such securities representing commercial bank debt or
intercompany debt.
(j) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates, if any, for the Securities to the Underwriters,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the Prospectus and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities, and (ix) any fees payable in connection with the rating of the
Securities.
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(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has
elected to rely upon Rule 434, a Term Sheet shall have been filed with
the Commission in accordance with Rule 424(b).
(b) Opinion of Connie C. Holbrook, Esq. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Connie C. Holbrook, Esq, counsel for the Company, who
may rely as to all matters governed by Federal and New York law upon
the opinion of Skadden, Arps, Slate, Meagher & Flom LLP referred to
below, in form and substance reasonably satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Utah.
(ii) The Company has corporate power and authority to
own its properties and conduct its business as described in
the Prospectus; and the Company is duly qualified to do
business as a foreign corporation and is in good standing in
all other jurisdictions in which it owns or leases substantial
properties or in which the conduct of its business requires
such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect.
(iii) The Securities are in the form contemplated by
the Indenture, have been duly authorized by the Company and,
assuming that the Securities have been duly authenticated by
the Trustee in accordance with the terms of the Indenture, the
Securities have been duly executed, issued and delivered by
the Company and constitute valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement
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thereof may be limited by (a) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other
similar laws now or hereinafter in effect relating to or
affecting creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity), and will be
entitled to the benefits of the Indenture. In expressing the
opinion set forth in this paragraph (iii), such counsel may
assume that the Securities, in the form delivered to the
Underwriters conform to the specimen of the Securities
examined by such counsel, which fact need not be verified by
an inspection of the individual Securities.
(iv) The execution, delivery and performance of the
Indenture and of this Agreement and the issuance and sale of
the Securities and compliance with the terms and provisions
hereof and thereof will not result in a breach or violation of
any of the terms or provisions of, or constitute a default
under, (a) any order known to such counsel of any governmental
agency having jurisdiction over the Company or any of its
properties or any agreement or instrument known to such
counsel to which the Company is a party or by which the
Company is bound or to which any of the properties of the
Company is subject, which would cause a material adverse
change in the financial position, shareholders' equity or
results of operations of the Company or affect the validity of
the Securities or the legal authority of the Company to comply
with the terms of the Securities, the Indenture, this
Agreement or (b) the charter or bylaws of the Company; and the
Company has full power and authority to authorize, issue and
sell the Securities as contemplated by this Agreement.
(v) The Indenture has been duly authorized, executed
and delivered by the Company and (assuming the due
authorization, execution and delivery of the Indenture by the
Trustee) is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except to the extent enforcement thereof may be limited by (a)
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereinafter in effect
relating to or affecting creditors' rights generally, and (b)
general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity).
(vi) This Agreement has been duly authorized,
executed and delivered by the Company.
(vii) No authorization, approval or consent of any
governmental authority or agency is necessary in connection
with the transactions contemplated by this Agreement, except
such as may be required under the 1933 Act, the 1939 Act,
state securities or Blue Sky laws, and except as have been
obtained.
(c) Opinion of Company Counsel. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel for the Company, in form and substance reasonably satisfactory
to counsel for the Underwriters, to the effect that:
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(i) The Securities are in the form contemplated by
the Indenture, and when executed and authenticated in
accordance with the terms of the Indenture and delivered to
and paid for by the Underwriters in accordance with the terms
hereof will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may
be limited by (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws now or
hereinafter in effect relating to or affecting creditors'
rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity), and will be entitled to the
benefits of the Indenture.
(ii) The Securities and the Indenture conform in all
material respects to the descriptions thereof contained in the
Prospectus.
(iii) The Indenture has been duly executed and
delivered by the Company (to the extent such execution and
delivery are matters governed by the laws of the State of New
York) and (assuming the due authorization, execution and
delivery of the Indenture by the Trustee) is a valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent
enforcement thereof may be limited by (a) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws now or hereinafter in effect relating to or
affecting creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(iv) This Agreement has been duly executed and
delivered by the Company (to the extent such execution and
delivery are matters governed by the laws of the State of New
York).
(v) The Registration Statement and the Prospectus, as
of their respective effective or issue dates (but excluding
the Form T-1 and the financial statements and the related
notes, schedules and other financial data included or
incorporated by reference in or excluded from the Registration
Statement or the exhibits thereto, as to which such counsel
need express no opinion), and the Indenture appeared on their
face to be appropriately responsive in all material respects
to the requirements of the 1933 Act, the 1933 Act Regulations
and the 1939 Act, as applicable, except that such counsel need
not assume any responsibility for the accuracy, completeness
or fairness of the statements contained or incorporated by
reference in the Registration Statement or the Prospectus
except to the extent set forth in paragraph (ii) above.
(vi) Such counsel does not know of any legal or
governmental proceedings required to be described in the
Registration Statement or Prospectus which are not described
as required, nor of any contracts or documents required to be
filed as exhibits to the Registration Statement which are not
described and filed as required.
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(vii) No authorization, approval or consent of any
governmental authority or agency is necessary in connection
with the consummation by the Company of the transactions
contemplated by this Agreement, except such as may be required
by the 1933 Act, the 1939 Act, state securities or Blue Sky
laws, and except as have been obtained.
(d) Opinion of Counsel to the Underwriters. The opinion of
Brown & Wood LLP, counsel to the Underwriters, who may rely as to all
matters governed by Utah law upon the opinion of Connie C. Holbrook,
Esq., referred to above, covering the matters referred to in
subparagraph (b) under the subheading (i) and subparagraph (c) under
the subheadings (i) through (v), inclusive, above.
(e) In giving their opinions as of the date hereof required by
subsection (b), (c) and (d) of this Section, Connie C. Holbrook, Esq.,
Skadden, Arps, Slate, Meagher & Flom LLP and Brown & Wood LLP shall
each additionally state the time and date on which Registration
Statement was declared effective under the 1933 Act, or if such counsel
have not received an effectiveness order from the Commission, that such
counsel have been advised by the Commission of the time and date on
which the Registration Statement was declared effective and the
Indenture was qualified under the Trust Indenture Act and, to the best
of such counsel's knowledge, that no stop order suspending the
Registration Statement's effectiveness has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission. In addition, each such counsel shall
state that they have participated in conferences with officers and
representatives of the Company, representatives of the independent
accountants of the Company, and the Underwriters, at which the contents
of the Registration Statement, the Prospectus and any amendments or
supplements thereto, and related matters were discussed and, although
such counsel are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained
in the Registration Statement, the Prospectus or any amendments or
supplements thereto and have made no independent check or verification
thereof, on the basis of the foregoing, no facts have come to such
counsel's attention that lead them to believe that the Registration
Statement, at the time it became effective, contained an 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 therein not misleading or that the Prospectus, or any
amendment or supplement thereto, at the time the Prospectus was issued,
at the time any such amended or supplemental prospectus was issued or
at the Closing Time, contains or contained an untrue statement of a
material fact or omits or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel may state that
they express no opinion or belief with respect to the Form T-1 or to
the financial statements and the related notes, schedules and other
financial data included in or excluded from the Registration Statement
or the exhibits thereto or incorporated by reference in such
Registration Statement or Prospectus.
(f) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the
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earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(g) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Representatives shall have received from Ernst &
Young, LLP a letter dated such date, in form and substance satisfactory
to the Representatives, together with signed or reproduced copies of
such letter for each of the other Underwriters containing statements
and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Ernst & Young, LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(i) Maintenance of Rating. At Closing Time, the Securities
shall be rated at least Baa3 by Moody's Investors Service Inc. and BBB-
by Standard & Poor's Ratings Services, a division of McGraw-Hill, Inc.,
and the Company shall have delivered to the Representatives a letter
dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Representatives, confirming that the Securities
have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the
Securities or any of the Company's other debt securities by any
"nationally recognized statistical rating agency", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the 1933
Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of the Securities or any of the
Company's other debt securities.
(j) Additional Documents. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters.
15
<PAGE>
(k) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof the fees and disbursements
of counsel chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
special counsel to the Company any Underwriter through Merrill Lynch expressly
for use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). The foregoing
16
<PAGE>
indemnity with respect to any untrue statement contained in or omitted from a
preliminary prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any such
loss, liability, claim, damage or expense purchased any of the Securities which
are the subject thereof if such person did not receive a copy of the Prospectus
(or any amendment or supplement thereto) (in each case exclusive of the
documents from which information is incorporated by reference) at or prior to
the written confirmation of the sale of such Securities to such person and the
untrue statement contained in or omitted from such preliminary prospectus was
corrected in the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company or special counsel
to the Company by such Underwriter through Merrill Lynch expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending such loss, liability, claim, damage,
expense or action as such expenses are incurred.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and approved by the indemnified
parties defendant in such action (which approval shall not be unreasonably
withheld), unless such indemnified parties reasonably object to such assumption
on the ground that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying party. If
an indemnifying party assumes the defense of such action, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action other than the
reasonable costs of investigation. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general
17
<PAGE>
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason (except as provided therein) unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the
18
<PAGE>
cover of the Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
19
<PAGE>
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis, in each case the
effect of which is such as to make it, in the reasonable judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in the Securities has been
suspended or materially limited by the Commission, or if trading generally on
the American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of the exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Utah authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time to purchase the Securities which
it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the aggregate principal amount of the Securities to be purchased
hereunder, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
20
<PAGE>
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of __________; and
notices to the Company shall be directed to it at 180 East 100 South, Salt Lake
City, UT, 84111, attention of Stephen E. Parks, Vice President, Chief Financial
Officer and Treasurer.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and the controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. [EXCEPT AS
OTHERWISE SET FORTH HEREIN,] SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
21
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
QUESTAR MARKET RESOURCES, INC.
By
-------------------------------------
G. L. Nordloh
President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
TD SECURITIES (USA) INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
---------------------------------------
Authorized Signatory
For itself and as Representatives of the other Underwriters named in
Schedule A hereto.
22
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SCHEDULE A
Principal
Amount of
Name of Underwriter Securities
------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................
Banc of America Securities LLC
Banc One Capital Markets, Inc.
TD Securities (USA) Inc.
Total.......................................................... $150,000,000
============
Sch. A-1
<PAGE>
SCHEDULE B
QUESTAR MARKET RESOURCES, INC.
$150,000,000 Senior Notes due 20__
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
4. The Securities shall include a make-whole early redemption option
with a spread over the applicable pricing Treasury note to be determined on the
date of pricing.
Sch. B-1
<PAGE>
SCHEDULE C
List of subsidiaries
Wexpro Company
Questar Exploration and Production Company
Questar Gas Management Company
Questar Energy Trading Company
Celsius Energy Resources, Ltd.
Canor Energy Ltd.
Sch. C-1
<PAGE>
- --------------------------------------------------------------------------------
QUESTAR MARKET RESOURCES, INC.
TO
BANK ONE TRUST COMPANY, NA
Trustee
------------------------------------
INDENTURE
Dated as of __________, 2000
------------------------------------
DEBT SECURITIES
- --------------------------------------------------------------------------------
<PAGE>
QUESTAR MARKET RESOURCES, INC.
Reconciliation and tie between Trust Indenture Act of
1939 and Indenture, dated as of _________, 2000
Trust Indenture
Act Section Indenture Section
ss.310(a) ...................................... 606(d)
609
610
(b) ...................................... 603
606(d)
ss.311(a) ...................................... 603
(b) ...................................... 703
ss.312(a) ...................................... 701
702
(b) ...................................... 702
(c) ...................................... 702
ss.313(a) ...................................... 703
(b) ...................................... 703
(c) ...................................... 703
704
(d) ...................................... 703
ss.314(a) ...................................... 704
(b) ...................................... Not Applicable
(c)(1) ...................................... 102
(c)(2) ...................................... 102
(c)(3) ...................................... Not Applicable
(d) ...................................... Not Applicable
(e) ...................................... 101
102
203
ss.315(a) ...................................... 601(a)
(b) ...................................... 703
(c) ...................................... 601
(d) ...................................... 601(a)
(d)(1) ...................................... 601(a)
(d)(2) ...................................... 601(c)
(d)(3) ...................................... 601(e)
(e) ...................................... Not Applicable
ss.316(a)(1)(A) ..................................... 512
(a)(1)(B) ..................................... 513
(a)(2) ...................................... Not Applicable
(b) ...................................... 508
ss.317(a)(1) ...................................... 503
(a)(2) ...................................... 504
(b) ...................................... 1003
ss.318 ...................................... 107
NOTE: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
i
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION........................................................2
SECTION 101. Definitions............................................................................2
SECTION 102. Compliance Certificates and Opinions..................................................12
SECTION 103. Form of Documents Delivered to Trustee................................................13
SECTION 104. Acts of Holders.......................................................................13
SECTION 105. Notices, Etc., to Trustee and Company.................................................16
SECTION 106. Notice to Holders of Securities; Waiver...............................................16
SECTION 107. Conflict with Trust Indenture Act.....................................................17
SECTION 108. Effect of Headings and Table of Contents..............................................17
SECTION 109. Successors and Assigns................................................................17
SECTION 110. Separability Clause...................................................................18
SECTION 111. Benefits of Indenture.................................................................18
SECTION 112. Governing Law.........................................................................18
SECTION 113. Moneys of Different Currencies to be Segregated.......................................18
SECTION 114. Payment to be in Proper Currency......................................................18
SECTION 115. Language of Notices...................................................................19
SECTION 116. Legal Holidays........................................................................19
ARTICLE TWO SECURITY FORMS...............................................................19
SECTION 201. Forms Generally.......................................................................19
SECTION 202. Form of Trustee's Certificate of Authentication.......................................20
SECTION 203. Securities in Global Form.............................................................20
ARTICLE THREE THE SECURITIES...............................................................21
SECTION 301. Amount Unlimited; Issuable in Series..................................................21
SECTION 302. Currency; Denominations...............................................................24
SECTION 303. Execution, Authentication, Delivery and Dating........................................25
SECTION 304. Temporary Securities..................................................................27
SECTION 305. Registration, Registration of Transfer and Exchange...................................28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......................................31
SECTION 307. Payment of Interest and Certain Additional Amounts; Rights to Interest and
Certain Additional Amounts Preserved..................................................32
SECTION 308. Persons Deemed Owners.................................................................34
SECTION 309. Cancellation..........................................................................35
SECTION 310. Computation of Interest...............................................................36
ARTICLE FOUR SATISFACTION, DISCHARGE AND DEFEASANCE.......................................36
SECTION 401. Satisfaction and Discharge of Indenture...............................................36
SECTION 402. Application of Trust Money............................................................37
SECTION 403. Satisfaction, Discharge and Defeasance of Securities of Any Series....................38
ARTICLE FIVE REMEDIES.....................................................................41
</TABLE>
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SECTION 501. Events of Default.....................................................................41
SECTION 502. Acceleration of Maturity; Rescission and Annulment....................................42
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee......................................................................43
SECTION 504. Trustee May File Proofs of Claim......................................................44
SECTION 505. Trustee may Enforce Claims Without Possession of Securities or Coupons................45
SECTION 506. Application of Money Collected........................................................45
SECTION 507. Limitation on Suits...................................................................46
SECTION 508. Unconditional Right of Holders to Receive Principal and any Premium, Interest
and Additional Amounts................................................................46
SECTION 509. Restoration of Rights and Remedies....................................................47
SECTION 510. Rights and Remedies Cumulative........................................................47
SECTION 511. Delay or Omission Not Waiver..........................................................47
SECTION 512. Control by Holders....................................................................47
SECTION 513. Waiver of Past Defaults...............................................................48
SECTION 514. Waiver of Stay or Extension Laws......................................................48
SECTION 515. Judgment Currency.....................................................................49
ARTICLE SIX THE TRUSTEE...........................................................................49
SECTION 601. Certain Rights of Trustee.............................................................49
SECTION 602. Not Responsible for Recitals or Issuance of Securities................................51
SECTION 603. May Hold Securities...................................................................51
SECTION 604. Money Held in Trust...................................................................51
SECTION 605. Compensation and Reimbursement........................................................51
SECTION 606. Resignation and Removal; Appointment of Successor.....................................52
SECTION 607. Acceptance of Appointment by Successor................................................53
SECTION 608. Merger, Conversion, Consolidation or Succession to
Business.....................................................................55
SECTION 609. Corporate Trustee Required; Eligibility...............................................55
SECTION 610. Appointment of Authenticating Agent...................................................55
SECTION 611. Notice of Defaults....................................................................57
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY..................................................................58
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders......................................................................58
SECTION 702. Preservation of Information; Communications to Holders................................58
SECTION 703. Reports by Trustee....................................................................58
SECTION 704. Reports by Company....................................................................59
ARTICLE EIGHT CONSOLIDATION, MERGER OR SALE................................................60
SECTION 801. Consolidation, Merger or Sale.........................................................60
SECTION 802. Successor Corporation Substituted.....................................................60
ARTICLE NINE SUPPLEMENTAL INDENTURES...............................................................61
</TABLE>
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<TABLE>
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SECTION 901. Supplemental Indentures Without Consent of Holders....................................61
SECTION 902. Supplemental Indentures with Consent of Holders.......................................62
SECTION 903. Execution of Supplemental Indentures..................................................64
SECTION 904. Effect of Supplemental Indentures.....................................................64
SECTION 905. Conformity with Trust Indenture Act...................................................64
SECTION 906. Reference in Securities to Supplemental Indentures....................................64
ARTICLE TEN COVENANTS.............................................................................65
SECTION 1001. Payment of Principal, Premium and Interest and Additional Amounts.....................65
SECTION 1002. Maintenance of Office or Agency.......................................................65
SECTION 1003. Money for Securities Payments to Be Held in Trust.....................................66
SECTION 1004. Additional Amounts....................................................................68
SECTION 1005. Corporate Existence...................................................................69
SECTION 1006. Limitation on Liens...................................................................69
SECTION 1007. Waiver of Covenant....................................................................73
SECTION 1008. Statements as to Compliance; Notice of Certain Defaults...............................73
ARTICLE ELEVEN REDEMPTION OF SECURITIES.....................................................74
SECTION 1101. Applicability of Article..............................................................74
SECTION 1102. Election to Redeem; Notice to Trustee.................................................74
SECTION 1103. Selection by Trustee of Securities to be Redeemed.....................................74
SECTION 1104. Notice of Redemption..................................................................75
SECTION 1105. Deposit of Redemption Price...........................................................75
SECTION 1106. Securities Payable on Redemption Date.................................................76
SECTION 1107. Securities Redeemed in Part...........................................................77
ARTICLE TWELVE SINKING FUNDS................................................................77
SECTION 1201. Applicability of Article..............................................................77
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.................................77
SECTION 1203. Redemption of Securities for Sinking Fund.............................................78
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS....................................................78
SECTION 1301. Applicability of Article..............................................................78
ARTICLE FOURTEEN SECURITIES IN FOREIGN CURRENCIES......................................................79
SECTION 1401. Applicability of Article..............................................................79
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES............................................79
SECTION 1501. Purposes for Which Meetings May be Called.............................................79
SECTION 1502. Call, Notice and Place of Meetings....................................................79
SECTION 1503. Persons Entitled to Vote at Meetings..................................................80
SECTION 1504. Quorum; Action........................................................................80
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings...................81
SECTION 1506. Counting Votes and Recording Action of Meetings.......................................82
</TABLE>
iv
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INDENTURE, dated as of _________, 2000 (the "Indenture"),
between QUESTAR MARKET RESOURCES, INC., a corporation duly organized and
existing under the laws of the State of Utah (herein called "Company"), having
its principal office at 180 East 100 South Street, Salt Lake City, Utah 84111,
and BANK ONE TRUST COMPANY, NA, a national banking association duly incorporated
and existing under the laws of the United States of America (herein 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 unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), unlimited as to principal amount, to bear such rates of interest,
to mature at such time or times, to be issued in one or more series and to have
such other provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder that are required to
be part of this Indenture and, to the extent applicable, shall be governed by
such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders (as herein defined) of the
Securities or of any series thereof and any Coupons (as herein defined), as
follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as to any computation required or permitted pursuant to,
and relating to any covenant of the Company contained in, any indenture
supplemental hereto relating to any series of Securities, which such computation
(unless otherwise provided in such supplemental indenture) shall be made in
accordance with generally accepted accounting principles as are generally
accepted at the date of such supplemental indenture, or except as otherwise
herein or in any indenture supplemental hereto expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
(4) the words "herein", "hereof", "hereto" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
(5) the word "or" is always used inclusively (for example, the
phrase "A or B" means "A or B or both", not "either A or B but not both").
Certain terms, used principally in Article Six, are defined in
that Article.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" means any additional amounts which are
required hereby or by any Security, under circumstances specified herein or
therein, to be paid by the Company in respect of certain taxes imposed on
Holders specified therein and which are owing to such Holders.
"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 specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the
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<PAGE>
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Attributable Debt" means, as of the date of determination,
the present value of net rent for the remaining term of a capital lease,
determined in accordance with GAAP, which is part of a Sale and Leaseback
Transaction, including any periods for which the lessee has the right to renew
or extend the lease. For purposes of the foregoing, "net rent" means the sum of
capitalized rental payments required to be paid by the lessee, other than
amounts required to be paid by the lessee for maintenance, repairs, insurance,
taxes, assessments, energy, fuel, utilities and similar charges. In the case of
a capital lease which 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 to be required to be paid under such lease subsequent to the first
date upon which it may be so terminated.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 610 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper of general
circulation in the place of publication, printed in the official language of the
country of publication and customarily published on each Business Day, whether
or not published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required hereunder,
they may be made (unless otherwise expressly provided herein) on the same or
different days of the week and in the same or different Authorized Newspapers.
"Bearer Security" means any Security in the form of bearer
securities established pursuant to Section 201 which is payable to bearer and is
not a Registered Security.
"Board of Directors" means either the Board of Directors of
the Company or any duly authorized committee of that Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a security evidencing all or part
of a series of Securities, issued to the Depositary for such series of
Securities in accordance with Section 303, and bearing the legend prescribed in
Section 303.
"Business Day", when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
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<PAGE>
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person, and any other obligor under the
Securities.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Capitalization" means, without duplication, the
sum of (a) the principal amount of Consolidated Funded Debt of the Company and
its Subsidiaries at the time outstanding, (b) the total capital represented by
the capital stock of the Company and its Subsidiaries at the time outstanding,
based, in the case of stock having par value, upon its par value, and in the
case of stock having no par value, upon the value stated on the books of the
Company, (c) the total amount of (or less the amount of any deficit in) retained
earnings and paid-in capital of the Company and its Subsidiaries, (d) reserves
for deferred federal and state income taxes arising from timing differences, and
(e) Attributable Debt, all as shown on a consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with GAAP; provided that in
determining the consolidated retained earnings and paid-in capital of the
Company and its Subsidiaries no effect shall be given to any unrealized write-up
or write-down in the value of assets or any amortization thereof, except for
accumulated provisions for depreciation, depletion, amortization and property
retirement which shall have been created by charges made by the Company or any
of its Subsidiaries on its books.
"Consolidated Funded Debt" means the Funded Debt of the
Company and its Subsidiaries, consolidated in accordance with GAAP.
"Corporate Trust Office" means the principal office of the
Trustee in Chicago, Illinois, at which at any particular time its corporate
trust business shall be administered, which office at the date of initial
execution of this Indenture, as to the Trustee, is 1 Bank One Plaza, Suite 0126,
Chicago, Illinois 60602, Attention: Corporate Trust Department.
"Corporation" includes corporations, partnerships, limited
liability companies, associations, companies and business trusts.
"Coupon" means any interest coupon appertaining to any
Security.
"Currency" or "Money", with respect to any payment, deposit or
other transfer in respect of the principal of or any premium or interest on or
any Additional Amounts with respect to any Security, means the unit or units of
legal tender for the payment of public and private debts (or any composite
thereof) in which such payment, deposit or other transfer is required to be made
by or pursuant to the terms hereof and, with respect to any other payment,
deposit or transfer pursuant to or contemplated by the terms hereof, means
Dollars.
"Currency Indexed Note" means any Security with the amount of
principal payments determined by reference to an index Currency.
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<PAGE>
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" or "U.S. Depositary" means, with respect to the
Securities of any series issuable or issued in whole or in part in global form,
including Book-Entry Securities, the Person designated as Depositary or "U.S.
Depositary" by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person
"Depositary" shall be a collective reference to such Persons. "Depositary" as
used with respect to the Securities of any such series shall mean the Depositary
with respect to the Securities of that series.
"Dollar" means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Event of Default" has the meaning specified in Section 501.
"Foreign Currency" means a currency issued by the government
of any country other than the United States of America.
"Funded Debt" means all Indebtedness that will mature,
pursuant to a mandatory sinking fund or prepayment provision or otherwise, and
all installments of Indebtedness that will fall due, more than one year from the
date of determination. In calculating the maturity of any Indebtedness, there
shall be included the term of any unexercised right of the debtor to renew or
extend such Indebtedness existing at the time of determination.
"GAAP" means generally accepted accounting principles in the
United States, as in effect on the date on which the determination is to be made
under the Indenture.
"Government Obligations", with respect to any Security, means
(i) direct obligations of the government or governments which issued the
Currency in which the principal of or any premium or interest on such Security
or any Additional Amounts in respect thereof shall be payable, in each case
where the payment or payments thereunder are supported by the full faith and
credit of such government or governments or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of such
government or governments, in each case where the payment or payments thereunder
are unconditionally guaranteed as a full faith and credit obligation by such
government or governments, and which, in the case of (i) or (ii), are not
callable or redeemable at the option of the issuer or issuers thereof, and shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such Government Obligation or a specific payment of interest
on or principal of or other amount with respect to any such Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Obligation or the specific
5
<PAGE>
payment of interest on or principal of or other amount with respect to the
Government Obligation evidenced by such depository receipt.
"Holder" means, with respect to a Registered Security, the
Person in whose name a Security is registered in the Security Register and, with
respect to a Bearer Security (or any temporary Global Security), and/or Coupons,
the bearer thereof.
"Indebtedness" means all items of indebtedness for borrowed
money (other than unamortized debt discount and premium) which would be included
in determining total liabilities as shown on the liability side of a balance
sheet prepared in accordance with GAAP as of the date as of which Indebtedness
is to be determined, and shall include indebtedness for borrowed money (other
than unamortized debt discount and premium) with respect to which the Company or
any Subsidiary customarily pays interest secured by any mortgage, pledge or
other lien or encumbrance of or upon, or any security interest in, any
properties or assets owned by the Company or any Subsidiary, whether or not the
Indebtedness secured thereby shall have been assumed, and shall also include
guarantees of Indebtedness of others; provided that in determining Indebtedness
of the Company or any Subsidiary there shall be included the aggregate
liquidation preference of all outstanding securities of any Subsidiary senior to
its Common Stock that are not owned by the Company or a Subsidiary; and
provided, further, that Indebtedness of any Person shall not include the
following:
(a) any indebtedness evidence of which is held in treasury
(but the subsequent resale of such indebtedness shall be deemed to constitute
the creation thereof); or
(b) any particular indebtedness if, upon or prior to the
maturity thereof, there shall have been deposited with a depository (or set
aside and segregated, if permitted by the instrument creating such
indebtedness), in trust, money (or evidence of such indebtedness as permitted by
the instrument creating such indebtedness) in the necessary amount to pay,
redeem or satisfy such indebtedness; or
(c) any indebtedness incurred to finance oil, natural gas,
hydrocarbon, inert gas or other mineral exploration or development to the extent
that the issuer thereof has outstanding advances to finance oil, natural gas,
hydrocarbon, inert gas or other mineral exploration or development, but only to
the extent such advances are not in default; or
(d) any indebtedness incurred without recourse to the Company
or any Subsidiary; or
(e) any indebtedness incurred to finance advance payments for
gas (pursuant to take-or-pay provisions or otherwise), but only to the extent
that such advance payments are pursuant to gas purchase contracts entered into
in the normal course of business; or
(f) any amount (whether or not included in determining total
liabilities as shown on the liability side of a balance sheet prepared in
accordance with GAAP) representing capitalized rent under any lease; or
(g) any indirect guarantees or other contingent obligations in
respect of indebtedness of other Persons, including agreements, contingent or
otherwise, with such other Persons or with third
6
<PAGE>
parties with respect to, or to permit or assure the payment of, obligations of
such other Persons, including, without limitation, agreements to purchase or
repurchase obligations of such other Persons, to advance or supply funds to, or
to invest in, such other Persons, or to pay for property, products or services
of such other Persons (whether or not conveyed, delivered or rendered); demand
charge contracts, through-put, take-or-pay, keep-well, make-whole or maintenance
of working capital or similar agreements; or guarantees with respect to rental
or similar periodic payments to be made by such other Persons.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and with respect to any Security, by the terms and provisions of such Security
and any Coupon appertaining thereto established as contemplated by Section 301
(as such terms and provisions may be amended pursuant to the applicable
provisions hereof) provided, however, that, if at any time more than one Person
is acting as Trustee under this Indenture due to the appointment of one or more
separate Trustees for any one or more separate series of Securities, "Indenture"
shall mean, with respect to such series of Securities for which any such Person
is Trustee, this Indenture as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"Independent Public Accountants" means accountants or a firm
of accountants that, with respect to the Company and any other obligor under the
Securities or the Coupons, are independent public accountants within the meaning
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to the
Indenture or certificates required to be provided hereunder.
"Indexed Security" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Legal Holiday", with respect to any Place of Payment or other
location, means a Saturday, a Sunday or a day on which banking institutions or
trust companies in such Place of Payment or other location are authorized or
obligated to be closed.
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<PAGE>
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, notice of
option to elect repayment or otherwise and includes any Redemption Date.
"New York Business Day" means each weekday which is not a day
on which banking institutions in New York City are authorized or obligated by
law to close.
"Office or Agency", with respect to any Securities, means an
office or agency of the Company maintained or designated in a Place of Payment
for such Securities pursuant to Section 1002 or any other office or agency of
the Company maintained or designated for such Securities pursuant to Section
1002 or, to the extent designated or required by Section 1002 in lieu of such
office or agency, the Corporate Trust Office of the Trustee.
"Officers' Certificate" means a certificate signed (i) by the
Chairman of the Board, the President or a Vice President, and (ii) by the
Controller, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, that complies with the requirements of Section 314(e)
of the Trust Indenture Act and is delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel for the Company or other counsel who shall be
reasonably acceptable to the Trustee, that complies with the requirements of
Section 314(e) of the Trust Indenture Act.
"Original Issue Discount Security" means any 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 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or the
Security Registrar or delivered to the Trustee or the Security Registrar for
cancellation;
(ii) Securities for whose payment or redemption (a) Money in
the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than 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 Securities or (b) U.S. Government Obligations or Foreign
Government Securities as contemplated by Section 403 in the necessary amount
have been theretofore deposited with the Trustee in trust for the Holders of
such Securities in accordance with Section 403; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provisions therefor satisfactory to the Trustee
has been made;
(iii) any such Security with respect to which the Company has
effected defeasance pursuant to Section 403 hereof; and
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<PAGE>
(iv) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, the principal amount of
any Original Issue Discount Securities that shall be deemed to be Outstanding
for such purposes shall be equal to 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 502, the principal
amount of a Security denominated other than in Dollars shall be deemed to be
that amount of Dollars that could be obtained for such principal amount on the
basis of the spot rate of exchange for such Foreign Currency or such currency
unit as determined by the Company or by an authorized exchange rate agent, the
principal amount of any indexed Security that may be counted in making such
determination and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in or pursuant to this Indenture, and
Securities owned by the Company or any other obligor upon the 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 Securities which the Trustee knows to
be so owned shall be so disregarded. 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
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person, which may be the Company,
authorized by the Company to pay the principal of (and premium, if any) or
interest on, or any Additional Amounts with respect to any Securities or any
Coupon on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of (and premium, if
any) and interest on, or any Additional Amounts with respect to, the Securities
of that series are payable as specified and contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security or any Security to which
a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen Coupon appertains.
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<PAGE>
"Redemption Date", when used with respect to any Security or
portion thereof to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security or
portion thereof to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"Registered Security" means any Security in the form of
Registered Securities established pursuant to Section 201 which is registered
in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Required Currency" has the meaning specified in Section 114.
"Responsible Officer", when used with respect to the Trustee,
means an officer of the Corporate Trust Department of the Trustee engaged in the
administration of corporate trust matters.
"Sale and Leaseback Transaction" means an arrangement in which
the Company or a Subsidiary sells any of its property which was placed into
service more than 120 days prior to such sale to a Person and leases it back
from that Person within 180 days of the sale.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any Securities
authenticated and delivered under this Indenture; provided, however, that, if at
any time there is more than one Person acting as Trustee under this Indenture,
"Securities" shall mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon or any Additional
Amounts with respect thereto, means the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
principal or interest is or such Additional Amounts are due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
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<PAGE>
and if at any time there is more than one such Person, "Trustee" shall mean each
such Person, and as used with respect to the Securities of any series shall mean
the Trustee with respect to Securities of that Series.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this instrument was executed,
except as provided in Section 905.
"United States", except as otherwise provided herein or in any
Security, means the United States of America (including the states thereof and
the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.
"United States Alien", except as otherwise provided in or
pursuant to this Indenture, means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "Vice President".
"Voting Stock" means stock of the class or classes of any
corporation having general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such
corporation (irrespective of whether or not at the time stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) provided that, for the purposes hereof,
stock which carries only the right to vote conditionally on the happening of an
event shall not be considered voting stock whether or not such event shall have
happened.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, 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, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents or any of them is specifically required
by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished. Each such
Officers' Certificate and Opinion of Counsel shall comply with Section 314(e) of
the Trust Indenture Act.
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SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture or any Security, they may, but need not,
be consolidated and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments or so voting
at any such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 315 of
the Trust Indenture Act) conclusive in favor of the Trustee and the Company and
any agent of the Trustee or the Company, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1506.
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Without limiting the generality of this Section 104, unless
otherwise provided in or pursuant to this Indenture, a Holder, including a U.S.
Depositary that is a Holder of a global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a U.S. Depository that
is a Holder of a global Security may provide its proxy or proxies to the
beneficial owners of interests in any such global Security through such U.S.
Depositary's standing instructions and customary practices.
The Trustee or the Company shall fix a record date for the
purpose of determining the Persons who are beneficial owners of interest in any
permanent global Security held by a U.S. Depositary entitled under the
procedures of such U.S. Depositary to make, give or take, by a proxy or proxies
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this Indenture to be made,
given or taken by Holders. If such a record date is fixed, the Holders on such
record date or their duly appointed proxy or proxies, and only such Persons,
shall be entitled to make, give or take such request, demand, authorization,
direction, notice, consent, waiver or other action, whether or not such Holders
remain Holders after such record date. No such request, demand, authorization,
direction, notice, consent, waiver or other action shall be valid or effective
if made, given or taken more than 90 days after such record date.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership, principal amount and serial numbers of
Bearer Securities held by any Person, and the date of the commencement and the
date of termination of holding the same, may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary reasonably acceptable to the Company,
wherever situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such Depositary, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the Company may assume
that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, (2) such Bearer Security is produced to the Trustee
by some other Person, (3) such Bearer Security is surrendered in exchange for a
Registered Security or (4) such Bearer Security is no longer Outstanding.
(d) The fact and date of execution of any such instrument or
writing pursuant to clause (c) above, the authority of the Person executing the
same and the principal amount and serial numbers of Bearer Securities held by
the Person so executing such instrument or writing and the date of the
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commencement and the date of termination of holding the same may also be proved
in any other manner which the Trustee deems sufficient; and the Trustee may in
any instance require further proof with respect to any of the matters referred
to in this clause.
(e) The ownership of Registered Securities shall be proved by
the Security Register.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
(g) Whenever for purposes of any Act to be taken hereunder by
the Holders of a series of Securities denominated in a Foreign Currency (or any
currency unit), the principal amount of Securities is required to be determined,
the aggregate principal amount of such Securities shall be deemed to be that
amount of Dollars that could be obtained for such principal amount on the basis
of the spot rate of exchange for such Foreign Currency or such currency unit as
determined by the Company or by an authorized exchange rate agent and evidenced
to the Trustee by an Officers' Certificate as of the date taking of such Act by
the Holders of the requisite percentage in principal amount of the Securities is
evidenced to the Trustee. An exchange rate agent may be authorized in advance
or from time to time by the Company, and maybe the Trustee or its Affiliate. Any
such determination by the Company or by any such exchange rate agent shall be
conclusive and binding on all Holders, the Company and the Trustee, and neither
the Company nor any such exchange rate agent shall be liable therefor in the
absence of bad faith.
(h) If the Company shall solicit from the Holders of any
Registered Securities, any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its option, by or pursuant to
a Board Resolution, fix in advance a record date for the determination of
Holders of Registered Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of Registered
Securities of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. Notice to Holders of Securities; Waiver.
Where this Indenture provides for notice to Holders of
Securities of any event, (i) if any of the Securities affected by such event are
Registered Securities, such notice to the Holders thereof shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each such Holder affected by such event, at his
address as it appears in the Security Register, within the time prescribed for
the giving of such notice and (ii) if any of the Securities affected by such
event are Bearer Securities, notice to the Holders thereof shall be sufficiently
given (unless otherwise herein or in the terms of such Bearer Securities
expressly provided) if published once in an Authorized Newspaper in New York,
New York, and in such other city or cities, if any, as may be specified in such
Securities and, if the Securities of such series are listed on any stock
exchange outside the United States, in any place at which such Securities are
listed on a securities exchange to the extent that such securities exchange so
requires, and mailed to such Persons whose names and addresses as were
previously filed with the Trustee, within the time prescribed for giving such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. In case by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause it
shall be impracticable to publish any notice to Holders of Bearer Securities as
provided above, then such publication in lieu thereof as shall be made with the
approval of the Trustee shall constitute a sufficient publication of such
notice. Neither failure to give notice by publication to Holders of Bearer
Securities as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice mailed to Holders of Registered Securities
as provided above.
Any notice which is mailed in the manner herein provided shall
be conclusively presumed to have been duly given or provided. In case by reason
of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice as provided above, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
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SECTION 107. Conflict with Trust Indenture Act.
This Indenture is subject to the Trust Indenture Act and if
any provision hereof limits, qualifies or conflicts with a provision of the
Trust Indenture Act that is required under such Act to be a part of and govern
this Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture, any Security or any
Coupon 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 111. Benefits of Indenture.
Nothing in this Indenture, any Security or any Coupon, express
or implied, shall give to any Person, other than the parties hereto, any
Security Registrar, any paying agent and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture, the Securities and any Coupons shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made or instruments entered into and, in each case,
performed in said state.
SECTION 113. Moneys of Different Currencies to be Segregated.
The Trustee shall segregate monies, funds, and accounts held
by the Trustee hereunder in one currency (or unit thereof) from any monies,
funds or accounts in any other currencies (or units thereof), notwithstanding
any provision herein which would otherwise permit the Trustee to commingle such
amounts.
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SECTION 114. Payment to be in Proper Currency.
The following provisions of this Section 114 shall apply to
the extent permitted by applicable law: In the case of any Security payable in
any particular currency or currency unit (the "Required Currency"), except as
otherwise provided herein, therein or in or pursuant to the related Board
Resolution or supplemental indenture or as contemplated by Section 301, the
obligation of the Company to make any payment of principal, premium or interest
thereon shall not be discharged or satisfied by any tender by the Company, or
recovery by the Trustee, in any currency or currency unit other than the
Required Currency, except to the extent that such tender or recovery shall
result in the Trustee timely holding the full amount of the Required Currency
then due and payable. If any such tender or recovery is made in other than the
Required Currency, the Trustee may, but shall not be obligated to, take such
actions as it considers appropriate to exchange such other currency or currency
unit for the Required Currency. The costs and risks of any such exchange,
including without limitation the risks of delay and exchange rate fluctuation,
shall be borne by the Company, the Company shall remain fully liable for any
shortfall or delinquency in the full amount of the Required Currency then due
and payable and in no circumstances shall the Trustee be liable therefor. The
Company hereby waives any defense of payment based upon any such tender or
recovery which is not in the Required Currency, or which, when exchanged for the
Required Currency by the Trustee, is less than the full amount of Required
Currency then due and payable.
SECTION 115. Language of Notices.
Any request, demand, authorization, direction, notice,
consent, election or waiver required or permitted under this Indenture shall be
in the English language, except that, if the Company so elects, any published
notice may be in an official language of the country of publication.
SECTION 116. Legal Holidays.
In any case where any Interest Payment Date, Stated Maturity
or Maturity of any Security shall be a Legal Holiday at any Place of Payment,
then (notwithstanding any other provision of this Indenture, any Security or any
Coupon other than a provision in this Indenture, any Security or Coupon that
specifically states that such provision shall apply in lieu of this Section)
payment need not be made at such Place of Payment on such date, but may be made
on the next succeeding day that is a Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or at the
Stated Maturity or Maturity, and no interest shall accrue on the amount payable
on such date or at such time for the period from and after such Interest Payment
Date or Stated Maturity or Maturity, as the case may be.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series and the Coupons, if any, to be
attached thereto shall be in substantially such form as shall be established by
or pursuant to a Board Resolution 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 or indenture
supplemental hereto, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
and Coupons, if any, as evidenced by their execution of the Securities and
Coupons, if any. If temporary Securities of any series are issued in global form
as permitted by Section 304, the form thereof also shall be established as
provided in the preceding sentence. If the forms of Securities and Coupons, if
any, of any series are established by, or by action taken pursuant to, a Board
Resolution, a copy of the Board Resolution together with an appropriate record
of any such action taken pursuant thereto, including a copy of the approved form
of Securities or Coupons, if any, shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in
substantially the form set forth in Section 202.
Unless otherwise provided in or pursuant to this Indenture,
the Securities shall be issuable in registered form without Coupons and shall
not be issuable upon the exercise of warrants.
The definitive Securities 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 Securities
and Coupons, if any, as evidenced by their execution of such Securities and
Coupons, if any.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 610, the Trustee's certificate of
authentication shall be in substantially the following form:
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This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
BANK ONE TRUST COMPANY, NA
as Trustee
By
---------------------------------
Authorized Signatory
SECTION 203. Securities in Global Form.
If Securities of a series are issuable in whole or in part in
global form, any such Security may provide that it shall represent the aggregate
or specified amount of Outstanding Securities from time to time endorsed thereon
and may also provide that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount, or any increase
or decrease in the amount or changes in the rights of Holders of Outstanding
Securities represented thereby, shall be made in such manner and by such Person
or Persons as shall be specified therein or in the Company Order to be delivered
pursuant to Section 303 or 304 with respect thereto. Subject to the provisions
of Section 303 and, if applicable, Section 304, the Trustee shall deliver and
redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel. Any instructions by the Company with
respect to a Security in global form shall be in writing but need not comply
with Section 314(e) of the Trust Indenture Act.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
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(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 309, 403, 906, 1106, 1107 or 1203);
(3) the date or dates, or the method, if any, by which such
date or dates shall be determined, on which the principal (and premium, if any)
of the Securities of the series is payable;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method, if any, by which such rate or rates
are to be determined, the date or dates from which such interest shall accrue,
or the method, if any, by which such date or dates shall be determined, the
Interest Payment Dates, if any, on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on any Interest Payment
Date, whether and under what circumstances Additional Amounts on such Securities
or any of them shall be payable, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(5) the Person to whom any interest on any Registered
Securities of the series shall be payable if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest and the manner in
which, or the Person to whom, any interest on any Bearer Securities of the
series shall be payable if otherwise than upon presentation and surrender of the
coupons appertaining thereto as they severally mature;
(6) if in addition to or other than in Chicago, Illinois, the
place or places where the principal of (and premium, if any) and interest on or
any Additional Amounts with respect to the Securities of the series shall be
payable;
(7) whether any of such Securities are to be redeemable at the
option of the Company and, if so, the period or periods within which or the date
or dates on which, the price or prices at which and the terms and conditions
upon which Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(8) the obligation, if any, or option of the Company to redeem
or purchase Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the other terms and conditions upon
which Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation, and any provisions for the remarketing of
such Securities so redeemed or purchased;
(9) the denominations in which any of such Securities that are
Registered Securities shall be issuable if other than denominations of $1,000
and any integral multiple thereof, and the denominations in which any of such
Securities that are Bearer Securities shall be issuable if other than the
denomination of $5,000;
(10) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the method by which such portion is to be determined;
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(11) whether Bearer Securities of the series are to be
issuable and if so, whether Registered Securities are to be issuable and whether
the Bearer Securities are to be issuable with Coupons, without Coupons or both,
and any restrictions applicable to the offer, sale or delivery of the Bearer
Securities and the terms, if any, upon which Bearer Securities may be exchanged
for Registered Securities and vice versa;
(12) the date as of which any Bearer Securities of the series
and any temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(13) if Bearer Securities of the series are to be issuable,
whether interest in respect of any portion of a temporary Bearer Security in
global form (representing all of the Outstanding Bearer Securities of the
series) payable in respect of any Interest Payment Date prior to the exchange,
if any, of such temporary Bearer Security for definitive 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;
(14) the currency of denomination of the Securities of any
series, which may be in Dollars, any Foreign Currency or any composite currency,
including but not limited to the ECU, and, if such currency of denomination is a
composite currency other than the ECU, the agency or organization, if any,
responsible for overseeing such composite currency;
(15) the currency or currencies in which payment of the
principal of (and premium, if any) and interest on or any Additional Amounts
with respect to the Securities will be made, and the currency or currencies (in
addition to Dollars), if any, in which payment of the principal of (and premium,
if any) or the interest on Registered Securities, at the election of each of the
Holders thereof, may also be payable;
(16) if the amount of payments of principal of (and premium,
if any) or, interest on or any Additional Amounts with respect to the Securities
of the series may be determined with reference to an index based on a currency
or currencies other than that in which the Securities are denominated or
designated to be payable, the terms and conditions upon which and the manner in
which such amounts shall be determined and paid or payable;
(17) if the payments of principal of (and premium, if any) or
the interest on or any Additional Amounts with respect to the Securities of the
series are to be made in a Foreign Currency other than the Foreign Currency in
which such Securities are denominated, the manner in which the exchange rate
with respect to such payments shall be determined;
(18) any deletions from, modifications of or additions to the
Events of Default set forth in Section 501 or covenants of the Company set forth
in Article Ten pertaining to the Securities of the series;
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(19) the form of the Securities and Coupons, if any, of the
series;
(20) whether the Securities of such series shall be issued in
whole or in part in global form, including Book-Entry Securities, and the
Depositary for such global Securities and, if so, (i) whether beneficial owners
of interests in any such global Security may exchange such interest for
Securities of the same series and of like tenor and of any authorized form and
denomination, and the circumstances under which any such exchanges may occur, if
other than in the manner specified in Section 305, and (ii) the name of the
Depositary or the U.S. Depositary, as the case may be, with respect to any
global Security;
(21) the application, if any, of Section 403;
(22) if any of such Securities are to be issuable upon the
exercise of warrants, this shall be so established and (if established by Board
Resolution) so set forth, as well as the time, manner and place for such
Securities to be authenticated and delivered;
(23) if any of such Securities are to be issuable in global
form and are to be issuable in definitive form (whether upon original issue or
upon exchange of a temporary Security) only upon receipt of certain certificates
or other documents or satisfaction of other conditions, then the form and terms
of such certificates, documents or conditions;
(24) if there is more than one Trustee, the identity of the
Trustee and, if not the Trustee, the identity of each Security Registrar, Paying
Agent or Authenticating Agent with respect to such Securities; and
(25) any other terms of the series of Securities (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities (including Coupons, if any) of any one series
shall be substantially identical except as to Currency of payments due
thereunder, denomination and the rate or rates of interest, if any, the method
or methods, if any, by which such rate or rates are to be determined and
Maturity, the date from which interest, if any, shall accrue and except as may
otherwise be provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate or in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and, unless
otherwise so provided by the Company, a series may be reopened for issuances of
additional Securities of such series or to establish additional terms of such
series of Securities.
If any of the terms of the series of Securities are
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the series.
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SECTION 302. Currency; Denominations.
Unless otherwise provided in or pursuant to this Indenture,
the principal of, any premium and interest on and any Additional Amounts with
respect to the Securities shall be payable in Dollars. The Securities of each
series shall be issuable in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of $1,000, if Registered Securities, in denominations of
$5,000, if Bearer Securities, and, in the case of Registered Securities, any
integral multiple of the applicable denomination.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, under its corporate seal reproduced thereon attested by the
signature of its Secretary or one of its Assistant Secretaries or its Treasurer
or one of its Assistant Treasurers. The Coupons, if any, shall be executed on
behalf of the Company by its Chairman of the Board, its President or one of its
Vice Presidents attested by its Secretary or any Assistant Secretary or its
Treasurer or one of its Assistant Treasurers. The signature of any of these
officers on the Securities (and Coupons, if any) may be manual or facsimile.
Securities (and Coupons, if any) bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities (and Coupons, if any) or did not hold such offices
at the date of such Securities (and Coupons, if any).
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities (with or without
Coupons) of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and,
subject to Sections 315(a) through 315(d) of the Trust Indenture Act, shall be
fully protected in relying upon,
(i) an Opinion of Counsel stating to the effect that:
(a) the form or forms of such Securities and Coupons, if
any, have been established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and Coupons, if any,
have been established in conformity with the provisions of this Indenture;
(c) the terms of the Securities and Coupons, if any,
have been established in accordance with the terms of this Indenture and all
conditions precedent provided for in the Indenture
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relating to the Trustee's authentication and delivery of the Securities and
Coupons, if any, will have been complied with; and
(d) as to such other matters as the Trustee may
reasonably request; and
(ii) an Officers' Certificate stating that, all conditions
precedent to the authentication and delivery of such Securities and Coupons, if
any, appertaining thereto, have been complied with and to the best knowledge of
the Persons executing such certificate, no event which is, or after notice or
lapse of time would become, an Event of Default with respect to any of the
Securities shall have occurred and be continuing.
The Trustee shall have the right to decline to authenticate
and deliver such Securities 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 or trustees and/or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
The Trustee shall not be required to authenticate Securities
denominated in a coin or currency (or unit including a coin or currency) other
than that of the United States of America if the Trustee reasonably determines
that such Securities impose duties or obligations on the Trustee which the
Trustee is not able or reasonably willing to accept; provided that the Trustee,
upon a Company Request, will resign as Trustee with respect to Securities of any
series as to which such a determination is made, prior to the issuance of such
Securities, and will comply with the request of the Company to execute and
deliver a supplemental indenture appointing a successor Trustee pursuant to
Section 901.
If all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Opinion of Counsel and an
Officers' Certificate at the time of issuance of each Security, but such opinion
and certificate, with appropriate modifications, shall be delivered at or before
the time of issuance of the first Security of such series.
If the Company shall establish pursuant to Section 301 that
the Securities of a series are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order with respect to such series, authenticate and
deliver one or more Securities in global form that (i) shall represent and shall
be denominated in an amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented by such global Security
or Securities, (ii) shall be registered, if in registered form, in the name of
the Depositary for such Book-Entry Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instruction and (iv) where such Depositary is The
Depository Trust Company, shall bear a legend substantially to the following
effect: "Unless and until it is exchanged in whole or in part for Securities in
certificated form, this 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 to such other effect as the Depositary and the Trustee may agree.
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Each Depositary designated pursuant to Section 301 for a
Book-Entry Security in registered form must, at the time of its designation and
at all times while it serves as Depositary, be a clearing agency registered
under the Securities Exchange Act of 1934 and any other applicable statute or
regulation. The Trustee shall have no responsibility to determine if the
Depositary is so registered. Each Depositary shall enter into an agreement with
the Trustee governing their respective duties and rights with regard to
Book-Entry Securities.
Each Security shall be dated the date of its authentication,
except that each Bearer Security, including any Bearer Security in global form,
shall be dated as of the date specified or contemplated by Section 301.
No Security or Coupon appertaining thereto shall be entitled
to any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of one of its authorized signatories, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Except as permitted by Section 306 or 307, the
Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant Coupons then matured have been detached and cancelled.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon receipt of a Company Order the Trustee
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor and form, with or without Coupons of
the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities and Coupons, if any. Such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form,
each of which shall be exchanged in accordance with the provisions thereof, if
temporary Securities of any series are issued, the Company will cause definitive
Securities of such series to be prepared without unreasonable delay. After the
preparation of definitive Securities of the same series and containing terms and
provisions that are identical to those of any temporary Securities, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company pursuant to Section 1002 in a
Place of Payment for such series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary 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 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, that no definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security unless the Trustee shall have received
from the person entitled to receive the definitive Bearer Security a certificate
substantially in the form approved in the Board Resolutions relating thereto and
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such delivery shall occur only outside the United States. Until so exchanged,
the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series
except as otherwise specified as contemplated by Section 301 with respect to the
payment of interest on Bearer Securities in temporary form.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company maintained pursuant to Section 1002 in
a Place of Payment being herein sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities as herein provided. In the
event that the Trustee shall not be the Security Registrar, it shall have the
right to examine the Security Register at all reasonable times. In the event
that the Trustee shall cease to be Security Registrar with respect to a series
of Securities, it shall have the right to examine the Security Register for such
series at all reasonable times.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency maintained pursuant to Section
1002 in a Place of Payment for that series, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount bearing a
number not contemporaneously outstanding and containing identical terms and
provisions.
At the option of the Holder, Registered Securities of any
series (except a Book-Entry Security representing all or a portion of the
Securities of such series) may be exchanged for other Registered Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Registered Securities to be exchanged at
such office or agency. Registered Securities may not be exchanged for Bearer
Securities. Whenever any Registered Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Registered Securities which the Holder making the exchange is entitled to
receive.
At the option of the Holder, Bearer Securities of any series
may be exchanged for Registered Securities (if the Securities of such series are
issuable in registered form) or Bearer Securities (if Bearer Securities of such
series are issuable in more than one denomination and such exchanges are
permitted by such series) of the same series, of any authorized denominations
and of like tenor and aggregate principal amount, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured Coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured Coupon or Coupons
or matured Coupon or Coupons in default, such exchange may be effected if the
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
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harmless. If thereafter the Holder of such Security 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 1002,
interest represented by Coupons shall be payable only upon presentation and
surrender of those Coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series after the close of business at such office or agency
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related date
for payment of Defaulted Interest, such Bearer Security shall be surrendered
without the Coupon relating to such Interest Payment Date or proposed date of
payment, as the case may be (or, if such Coupon is so surrendered with such
Bearer Security, such Coupon shall be returned to the person so surrendering the
Bearer Security), and interest or Defaulted Interest, as the case may be, shall
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of the Registered Security issued in exchange for
such Bearer Security, but shall be payable only to the Holder of such Coupon
when due in accordance with the provisions of this Indenture.
Notwithstanding any other provision of this Section, unless
and until it is exchanged in whole or in part for Securities in certificated
form, a Security in global form representing all or a portion of the Securities
of a series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for the Securities of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Securities of such series or if at any time the Depositary for the
Securities of such series shall no longer be eligible under Section 303, the
Company shall appoint a successor Depositary with respect to the Securities of
such series. If a successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the issuer receives such notice or
becomes aware of such ineligibility, the Company's election pursuant to Section
301(20) shall no longer be effective with respect to the Securities of such
series and the Company shall execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of certificated Securities of such
series of like tenor, shall authenticate and deliver Securities of such series
in certificated form in an aggregate principal amount equal to the principal
amount of the Security or Securities in global form representing such series in
exchange for such Security or Securities in global form.
The Company may at any time and in its sole discretion
determine that the Securities of any series issued 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 shall execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of certificated
Securities of such series of like tenor, shall authenticate and deliver,
Securities of such series in certificated form and in an aggregate principal
amount equal to the principal amount of the Security or Securities in global
form representing such series in exchange for such Security or Securities in
global form.
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If specified by the Company pursuant to Section 301 with
respect to a series of Securities, the Depositary for such series of Securities
may surrender a global Security of such series in exchange in whole or in part
for Securities of such series in certificated form on such terms as are
acceptable to the Company and such Depositary. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to each Person specified by such Depositary a
new certificated Security or Securities of the same series of
like tenor, 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
(ii) to such Depositary a new global security of
like tenor in a denomination equal to the difference, if any,
between the principal amount of the surrendered global
Security and the aggregate principal amount of certificated
Securities delivered to Holders thereof.
In any exchange provided for in any of the preceding three
paragraphs, the Company shall execute and the Trustee shall authenticate and
deliver Securities in certificated form in authorized denominations.
Upon the exchange of a global Security for Securities in
certificated form, such global Security shall be cancelled by the Trustee.
Unless expressly provided with respect to the Securities of any series that such
Security may be exchanged for Bearer Securities, Securities issued in exchange
for a Book-Entry Security pursuant to this Section shall be registered in such
names and in such authorized denominations as the Depositary for such Book-Entry
Security, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities
to the Persons in whose names such Securities are so registered.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitling the Holders thereof to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange or redemption shall (if so required by
the Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of
transfer or exchange or redemption of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or
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exchange of Securities, other than exchanges pursuant to Section 304, 906 or
1107 not involving any transfer.
Except as otherwise provided in or pursuant to this Indenture,
the Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series for a period of 15 days before the selection
of any Securities of that series for redemption, or (ii) to register the
transfer of or exchange any Registered Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part, or (iii) to exchange any Bearer Security so selected for redemption
except that such a Bearer Security may be exchanged for a Registered Security of
that series and like tenor, provided that such Registered Security shall be
simultaneously surrendered for redemption with written instruction for payment
consistent with the provisions of this Indenture or (iv) to issue, register the
transfer of or exchange any Security which, in accordance with its terms, has
been surrendered for repayment at the option of the Holder, except the portion,
if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
with Coupons corresponding to the Coupons, if any, appertaining to the
surrendered Security of the same series and of like tenor and principal amount
and bearing a number not contemporaneously outstanding with Coupons
corresponding to the Coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or Security with a destroyed, lost or stolen Coupon and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security or Coupon has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
a new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding with Coupons corresponding to
the Coupons, if any, appertaining to the destroyed, lost or stolen Security.
Notwithstanding the foregoing provisions of this Section 306,
in case any such mutilated, destroyed, lost or stolen Security or Coupon has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security or Coupon, pay such Security or Coupon;
provided, however, that payment of principal of and any premium or interest on
or any Additional Amounts with respect to any Bearer Securities shall, except as
otherwise provided in Section l002, be payable only at an office or agency
located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities and any
Additional Amounts with respect to such interest shall be payable only upon
presentation and surrender of the Coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in
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relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every new Security of any series with its Coupons, if any,
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
Coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and its Coupons, if any, or the destroyed, lost or stolen Coupon, shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities of
that series and their Coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented
pursuant to this Indenture with respect to particular Securities or generally,
are exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or Coupons.
SECTION 307. Payment of Interest and Certain Additional Amounts; Rights to
Interest and Certain Additional Amounts Preserved.
Unless otherwise provided as contemplated by Section 301,
interest on and any Additional Amounts with respect to any Registered Security
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest. Unless otherwise provided in or pursuant
to this Indenture, in case a Bearer Security is surrendered in exchange for a
Registered Security after the close of business (at an Office or Agency for such
Security) on any Regular Record Date therefor and before the opening of business
(at such Office or Agency) on the next succeeding Interest Payment Date
therefore, such Bearer Security shall be surrendered without the Coupon
relating to such Interest Payment Date and interest shall not be payable on such
Interest Payment Date in respect of the Registered Security issued in exchange
for such Bearer Security, but shall be payable only to the Holder of such Coupon
when due in accordance with the provisions of this Indenture.
Any interest on and any Additional Amounts with respect to any
Registered Security of any series which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) 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 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
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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 is provided in
this Clause (1). 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 Date therefor to be
mailed, first-class postage prepaid, to each Holder of Registered Securities of
such Series at his address as it appears in the Security Register, not less than
10 days prior to such Special Record Date. The Trustee may, in its discretion,
in the name and at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper of general circulation in the
Borough of Manhattan, The City of New York, but such publication shall not be a
condition precedent to the establishment of 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 Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause (2).
In case a Bearer Security is surrendered at the Office or Agency for such
Security in exchange for a Registered Security after the close of business at
such Office or Agency on any Special Record Date and before the opening of
business at such Office or Agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the Coupon
relating to such proposed date of payment and Defaulted Interest shall not be
payable on such proposed date of payment in respect of the Registered Security
issued in exchange for such Bearer Security, but shall be payable only to the
Holder of such Coupon when due in accordance with the provisions of this
Indenture.
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities 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.
At the option of the Company, interest on Registered
Securities of any series that bear interest may be paid (i) by mailing a check
to the address of the Person entitled thereto as such address shall appear in
the Security Register or (ii) by wire transfer to an account maintained by the
person entitled thereto as specified in the applicable Security Register.
Notwithstanding the above, except as otherwise specified with
respect to a series of Securities in accordance with the provisions of Section
301, a Holder of $10,000,000 or more in aggregate principal amount of Securities
of the same series having the same Interest Payment Date shall, upon written
request received by the Trustee prior to the Regular Record Date in respect of
an interest payment, or the date which is 15 days before the Stated Maturity or
date of redemption of the principal of (and premium, if any, on) the Securities,
as the case may be, be entitled to receive payments of principal of (and
premium, if any) and interest by wire transfer to an account maintained by such
Holder with a bank located in the United States; provided, however, that no
payment of principal (and premium, if any) will be made without prior
presentment and surrender of the Securities.
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Subject to the foregoing provisions of this Section, each
Security or Coupon, if any, delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security or Coupon, if
any, shall carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Security or Coupon.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Registered Security for the purpose of receiving
payment of principal of (and premium, if any) and (subject to Section 307)
interest on, and any Additional Amounts with respect to, such Registered
Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security
held on its behalf by the Depositary shall have any rights under this Indenture
with respect to such global Security, and such Depositary may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such global Security for all purposes whatsoever. None of the Company, the
Trustee, any Paying Agent or the Security Registrar will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interest of a global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interest.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any Coupon
as the absolute owner of such Bearer Security or Coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or Coupon be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security
held on its behalf by the Depositary shall have any rights under this Indenture
with respect to such global Security, and such Depositary may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such global Security for all purposes whatsoever. None of the Company, the
Trustee, any Paying Agent or the Security Registrar will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interest of a global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interest.
SECTION 309. Cancellation.
All Securities and Coupons surrendered for payment,
redemption, registration of transfer or exchange or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities and
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Coupons so delivered shall be promptly cancelled by the Trustee. No Securities
or Coupons shall be authenticated in lieu of or in exchange for any Securities
or Coupons cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities and Coupons held by the Trustee
shall be destroyed by the Trustee, unless by a Company Order the Company directs
their return to it, and a certificate evidencing such destruction shall be
delivered to the Company.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION, DISCHARGE AND DEFEASANCE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect with respect to Securities of any series (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series and replacement of lost, stolen or mutilated Securities of such series
herein expressly provided for) and any Coupons appertaining thereto, and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to such
series, when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered and all Coupons appertaining
thereto (other than (i) Coupons appertaining to Bearer
Securities of such series surrendered in exchange for
Registered Securities and maturing after such exchange,
surrender of which is not required or has been waived as
provided in Section 305, (ii) Securities of such series and
Coupons which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306, (iii)
Coupons appertaining to Bearer Securities of such series
called for redemption and maturing after the relevant
Redemption Date, surrender of which has been waived as
provided in Section 1106 and (iv) Securities of such series
and Coupons for whose payment Money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities and Coupons of such series not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
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(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) if redeemable at the option of the
Company, are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire indebtedness on such
Securities and Coupons of such series not theretofore delivered to the Trustee
for cancellation, for principal of (and premium, if any) and interest on, and
any Additional Amounts with respect to such Securities and Coupons to the date
of such deposit (in the case of Securities and Coupons of such series which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there are Securities of two or more series
hereunder, the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Securities of such series as to which it is Trustee and if the other
conditions thereto are met.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 605 and,
if Money shall have been deposited with the Trustee pursuant to subclause (B) of
clause (1) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all Money and Government Obligations deposited with the Trustee pursuant
to Sections 401 and 403 shall be held in trust and applied by it, in accordance
with the provisions of the Securities and Coupons, if any, and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any), interest and
Additional Amounts for whose payment such Money and Government Obligations have
been deposited with or received by the Trustee; but such Money and Government
Obligations need not be segregated from other funds except to the extent
required by law.
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SECTION 403. Satisfaction, Discharge and Defeasance of Securities of Any Series.
If this Section is specified, as contemplated by Section 301,
to be applicable to Securities and Coupons, if any, of any series, at the
Company's option, either
(a) the Company will be deemed to have been Discharged
(as defined below) from its obligations with respect to Securities and Coupons,
if any, of such series or
(b) the Company will cease to be under any obligation to
comply with any term, provision or condition set forth in (i) Article Eight and
Section 1006 or (ii) the terms, provisions or conditions of such series
specified pursuant to Section 301 (provided, however, that the Company may not
cease to comply with any obligations as to which it may not be Discharged
pursuant to the definition of "Discharged"), if, in the case of (a) and (b),
with respect to the Securities and Coupons, if any, of such series on the 91st
day after the applicable conditions set forth below in (x) and either (y) or (z)
have been satisfied:
(x) (1) the Company has paid or caused to be paid
all other sums payable with respect to the Outstanding
Securities and Coupons, if any, of such series (in addition to
any required under (y) or (z)); and
(2) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of the entire
indebtedness on all Outstanding Securities and Coupons, if
any, of any such series have been complied with;
(y) (1) the Company shall have deposited or
caused to be deposited irrevocably with the Trustee as a trust
fund specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of the Securities and
Coupons, if any, of such series (i) an amount (in such
currency or currency unit in which the Outstanding Securities
and Coupons, if any, of such series are payable) or (ii) U.S.
Government Obligations (as defined below) or, in the case of
Securities and Coupons, if any, denominated in a Foreign
Currency, Foreign Government Securities (as defined below)
denominated in such Foreign Currency, which through the
payment of interest and principal in respect thereof in
accordance with their terms will provide, not later than the
due date of any payment of principal (including any premium),
and interest, if any, under the Securities and Coupons, if
any, of such series, Money in an amount or (iii) a combination
of (i) and (ii) sufficient (in the opinion with respect to
(ii) and (iii) of a nationally recognized firm of independent
public accountants expressed in a written certification
thereof delivered to the Trustee) to pay and discharge each
installment of principal of (including any premium), and
interest, if any, on, and any Additional Amounts with respect
to the Outstanding Securities and Coupons, if any, of such
series on the dates such installments of interest or principal
are due;
(2) (i) no Event of Default or event
(including such deposit) which with notice or lapse of time or
both would become an Event of Default shall have occurred
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and be continuing on the date of such deposit, (ii) no Event
of Default as defined in clause (6) or (7) of Section 501, or
event which with notice or lapse of time or both would become
an Event of Default under either such clause, shall have
occurred within 90 days after the date of such deposit and
(iii) such deposit and the related intended consequence under
(a) or (b) will not result in any default or event of default
under any material indenture, agreement or other instrument
binding upon the Company or any Subsidiary or any of their
properties; and
(3) the Company shall have delivered to the
Trustee
(A) an Opinion of Counsel to the effect that
Holders of the Securities and Coupons, if any, of such series
will not recognize income, gain or loss for Federal income tax
purposes as a result of the Company's exercise of its option
under this Section 403 and will be subject to Federal income
tax in the same amount, in the same manner and at the same
times as would have been the case if such option had not been
exercised; and
(B) if the Securities of such series are then
listed on any exchange, an Opinion of Counsel that the
Securities of such series shall not be delisted as a result of
the exercise of this option;
(z) the Company has properly fulfilled such other
means of satisfaction and discharge as is specified, as
contemplated by Section 301, to be applicable to the
Securities and Coupons, if any, of such series.
Any deposits with the Trustee referred to in clause (y)(1)
above shall be irrevocable and shall be made under the terms of an escrow trust
agreement in form and substance satisfactory to the Trustee. If any Outstanding
Securities and Coupons, if any, of such series are to be redeemed prior to their
Stated Maturity, whether pursuant to any mandatory redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable escrow
trust agreement will provide therefor and the Company will make such
arrangements as are satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
"Discharged" means that the Company will be deemed to have
paid and discharged the entire indebtedness represented by, and obligations
under, the Securities and Coupons, if any, of the series as to which this
Section is specified as applicable as aforesaid and to have satisfied all the
obligations under this Indenture relating to the Securities and Coupons, if any,
of such series (and the Trustee, at the expense of the Company, will execute
proper instruments acknowledging the same), except (A) the rights of Holders
thereof to receive, from the trust fund described in clause (y)(1) above,
payments of the principal of, premium and the interest, if any, on such
Securities and Coupons, if any, when such payments are due, (B) the Company's
obligations with respect to such Securities and Coupons, if any, under Sections
305 and 306 (insofar as applicable to Securities of such series), 402, 1002 and
1003 (last paragraph only) and the Company's obligations to the Trustee under
Sections 605 and 606 and (C) the rights, powers, trusts, duties and immunities
of the Trustee hereunder, will survive such discharge. The Company will
reimburse the trust fund for any loss suffered by it as a result of any tax, fee
or other
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charge imposed on or assessed against deposited U.S. Government Obligations or
Foreign Government Securities, as the case may be, or any principal, premium or
interest paid on such Obligations, and, subject to the provisions of Section
605, will indemnify the Trustee against any claims made against the Trustee in
connection with any such loss.
"Foreign Government Securities" as used in Section 403 means,
with respect to Securities and Coupons, if any, of any series that are
denominated in a Foreign Currency, securities that are (i) direct obligations of
the government that issued such currency for the payment of which obligations
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of such government
(the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation of such government) which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof and
will also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Foreign Government Obligation or a specified
payment of interest on or principal of any such Foreign Government Obligation
held by such custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Foreign
Government Obligations or the specific payment of interest on or principal of
the Foreign Government Obligation evidenced by such depository receipt.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation of the United States of America, which, in either
case under clauses (i) or (ii), are not callable or redeemable at the option of
the issuer thereof and will also include a depository receipt issued by a bank
or trust company as custodian with respect to any such U.S. Government
Obligation or a specified payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligations or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be 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):
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(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that series when such
interest becomes or such Additional Amounts become due and payable, and
continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series, and continuance of such
default for a period of 30 days; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or the Securities of that series
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of series of
Securities other than that series), and continuance of such default or breach
for a period of 90 days after there has 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 principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(5) if any event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by which there may
be secured or evidenced, any indebtedness of the Company for money borrowed,
whether such indebtedness now exists or shall hereafter be created, shall happen
and shall result in such indebtedness in principal amount in excess of
$10,000,000 becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable, and such acceleration shall not
be rescinded or annulled, or such indebtedness shall not have been discharged,
within a period of 30 days after there 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 principal amount of the Outstanding Securities
of such series, a written notice specifying such event of default and requiring
the Company to cause such acceleration to be rescinded or annulled or to cause
such indebtedness to be discharged and stating that such notice is a "Notice of
Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days, or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree
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or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 33 1/3% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the Money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of any interest on
and Additional Amounts with respect to all Securities of that
series and any Coupons appertaining thereto;
(B) the principal of (and premium, if any, on)
any Securities of that series which have become due otherwise
than by such declaration of acceleration and interest thereon
and any Additional Amounts with respect thereto at the rate or
rates prescribed therefor in such Securities;
(C) to the extent that payment of such interest
or Additional Amounts is lawful, interest upon overdue
installments of any interest and Additional Amounts at the
rate or rates prescribed therefor in such Securities; and
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(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of (and premium, if any,)
and interest on, and any Additional Amounts with respect to Securities of that
series which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of
interest on or any Additional Amounts with respect to any Security or Coupon, if
any, when such interest or Additional Amounts become due and payable and such
default continues for a period of 30 days; or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof;
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities or Coupons, if any, the whole amount
of Money then due and payable on such Securities and any Coupons for principal
(and premium, if any) and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal (and
premium, if any) and on any overdue interest and Additional Amounts, at the rate
or rates prescribed therefor in such Securities or Coupons, if any, and, in
addition thereto, such further amount of Money as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay the Money and is required to pay
the Trustee pursuant to the preceding paragraph forthwith upon the demand of the
Trustee, the Trustee in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the Money so due and
unpaid and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Securities
or Coupons, if any, and collect the Money adjudged or decreed to be paid in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities or Coupons, if any, wherever situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series or Coupons, if any, by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any
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covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
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 on
the Company for the payment of any overdue principal, premium, interest or
Additional Amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of such series, of the
principal and any premium, interest and Additional Amounts owing and unpaid in
respect of the Securities and any Coupons appertaining thereto 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 the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents or counsel) and
of the Holders of Securities or any Coupons allowed in such judicial proceeding;
and
(ii) to collect and receive any Monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 605.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder of
a Security or any Coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or Coupons or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or any Coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.
All rights of action and claims under this Indenture or any of
the Securities or Coupons may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or Coupons or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery or judgment shall, after provision for the payment of the reasonable
compensation, expense, disbursements and advances of the Trustee, its agents and
counsel, and for any other amounts due to the Trustee under
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Section 605, be for the ratable benefit of the Holders of the Securities or any
Coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any Money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such Money on account of principal
(or premium, if any) or interest or Additional Amounts, upon presentation of the
Securities or Coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 605; and
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any), interest and Additional Amounts on
the Securities and any Coupons in respect of which or for the benefit
of which such Money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities and any Coupons for principal (and premium, if any) and
interest and Additional Amounts, respectively; and
Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any Coupons
appertaining thereto shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60 day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series; it being
understood and intended that no one or more of such Holders shall have any right
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in any manner whatever by virtue of, or by availing of, any provision of this
Indenture or any Security to affect, disturb or prejudice the rights of any
other of such Holders or Holders of Securities of any other series, or to obtain
or to seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal and any
Premium, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the
Holder of any Security or Coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of, any premium and (subject
to Sections 305 and 307) interest on, and any Additional Amounts with respect to
such Security or payment of such Coupon, as the case may be, on the respective
Stated Maturity or Maturities therefor specified in such Security or Coupon (or,
in the case of redemption, on the Redemption Date or, in the case of repayment
at the option of such Holder if provided in or pursuant to this Indenture, on
the date such repayment is due) and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and each such Holder
shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and each such Holder shall
continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or Coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security or Coupon to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by such
Holder, as the case may be.
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SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series and any Coupons appertaining thereto, provided
that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) such direction is not unduly prejudicial to the rights of
the other Holders of Securities of such series not joining in such action.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any Coupons waive any past default hereunder with
respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series or any Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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SECTION 515. Judgment Currency.
The following provisions of this Section 515 shall apply to
the extent permissible under applicable law: Judgments in respect of any
obligations of the Company under any Securities or Coupons, if any, of any
series shall be rendered in the currency or currency unit in which such
Securities or Coupons are payable. If for the purpose of obtaining a judgment in
any court with respect to any obligation of the Company hereunder or under any
Security or Coupon, it shall become necessary to convert into any other currency
or currency unit any amount in the currency or currency unit due hereunder or
under such Security or Coupon, then such conversion shall be made at the
Conversion Rate (as defined below) as in effect on the date the Company shall
make payment to any person in satisfaction of such judgment. If pursuant to any
such judgment, conversion shall be made on a date other than the date payment is
made and there shall occur a change between such Conversion Rate and the
Conversion Rate as in effect on the date of payment, the Company agrees to pay
such additional amounts (if any) as may be necessary to ensure that the amount
paid is the amount in such other currency or currency unit which, when converted
at the Conversion Rate as in effect on the date of payment or distribution, is
the amount then due hereunder or under such Security or Coupon. Any amount due
from the Company under this Section 515 shall be due as a separate debt and is
not to be affected by or merged into any judgment being obtained for any other
sums due hereunder or in respect of any Security or Coupon so that in any event
the Company's obligations hereunder or under such Security or Coupon will be
effectively maintained as obligations in such currency or currency unit. In no
event, however, shall the Company be required to pay more in the currency or
currency unit due hereunder or under such Security or Coupon at the Conversion
Rate as in effect when payment is made than the amount of currency or currency
unit stated to be due hereunder or under such Security or Coupon.
For purposes of this Section 515, "Conversion Rate" shall mean
the spot rate as determined by the Company at which in accordance with normal
banking procedures the currency or currency unit into which an amount due
hereunder or under any Security or Coupon is to be converted could be purchased
with the currency or currency unit due hereunder or under any Security or
Coupon, at the option of the Company from major banks located in New York,
London or any other principal market for such purchased currency or currency
unit.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(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, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order (in each
case, other than delivery of any Security, together with any Coupons
appertaining thereto, to the Trustee for authentication and delivery pursuant to
Section 303 which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) 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, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney;
(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 with due care by it
hereunder; and
(h) The Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 602. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or the sufficiency of this Indenture or of the Securities or the
Coupons, except that the Trustee represents that it is duly authorized to
execute and deliver this Indenture, authenticate the
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Securities and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 603. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Trustee or the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
or Coupons and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
SECTION 604. Money Held in Trust.
Money held by the Trustee in trust hereunder 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 Money received by it hereunder
except as otherwise agreed with the Company.
SECTION 605. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's negligence or
bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold
it harmless against, any loss, liability or expense incurred without negligence
or bad faith on their part, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending themselves against any claim or liability in connection
with the exercise or performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities of any series 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 or interest on or any Additional Amounts with respect to Securities or
any Coupons appertaining thereto.
The obligations of the Company under this Section 605 to
compensate and indemnify the Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, disbursements
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and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture.
SECTION 606. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee pursuant
to Section 607.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 607 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
310(b) of the Trust Indenture Act after written request
therefor by the Company or by any Holder of a Security of such
series who has been a bona fide Holder of a Security of such
series for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 310(a) of the Trust Indenture Act and shall fail to
resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or the Securities of such series, or (ii)
any Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities of such series and the appointment
of a successor Trustee or Trustees.
(e) if the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may
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be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 607. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 607, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 607, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided in Section 105. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.
SECTION 607. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a
successor Trustee with respect to all Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties hereunder of the retiring
Trustee; but, on the request of the Company or the successor Trustee, all
property and Money held by such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and Money
held by such retiring Trustee hereunder, subject nevertheless to its claim, if
any, provided for in Section 605.
(b) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring
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shall continue to be vested in the retiring Trustee, and (3) 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 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
and that no Trustee shall be responsible for any notice given to, or received
by, or any act or failure to act on the part of any other Trustee hereunder; and
upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and Money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor Trustee shall
be qualified and eligible under the Trust Indenture Act.
SECTION 608. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a
Corporation permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has a combined
capital and surplus (computed in accordance with Section 310(a)(2) of the Trust
Indenture Act) of at least $50,000,000. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
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SECTION 610. Appointment of Authenticating Agent.
The Trustee may appoint one or more Authenticating Agents
acceptable to the Company with respect to one or more series of Securities which
shall be authorized to act on behalf of the Trustee to authenticate Securities
of that or those series issued upon original issue, exchange, registration of
transfer, partial redemption or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company
and, except as provided in or pursuant to this Indenture, shall at all times be
a corporation that would be permitted by the Trust Indenture Act to act as
trustee under an indenture qualified under the Trust Indenture Act, is
authorized under applicable law and by its charter to act as an Authenticating
Agent and has a combined capital and surplus (computed in accordance with
Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000. If at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
be the successor of such Authenticating Agent hereunder, provided such
corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent shall serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
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The Company agrees to pay each Authenticating Agent from time
to time reasonable compensation for its services under this Section. If the
Trustee makes such payments, it shall be entitled to be reimbursed for such
payments, subject to the provisions of Section 605.
The provisions of Sections 308, 602 and 603 shall be
applicable to each Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or
more series of Securities pursuant to this Section, the Securities of such
series may have endorsed thereon, in addition to or in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication in the
following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
BANK ONE TRUST COMPANY, NA
As Trustee
By
---------------------------
As Authenticating Agent
By
---------------------------
Authorized Signatory
If all of the Securities of any series may not be originally
issued at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested in writing (which writing need
not be accompanied by or contained in an Officers' Certificate by the Company),
shall appoint in accordance with this Section an Authenticating Agent having an
office in a Place of Payment designated by the Company with respect to such
series of Securities.
SECTION 611. Notice of Defaults.
The Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities of any series, mail to all Holders of
Securities of that series entitled to receive reports pursuant to Section 703,
notice of all defaults with respect to that series known to the Trustee, unless
such defaults have been cured before the giving of such notice; provided,
however, that, except in the case of default in the payment of the principal of,
premium, if any, or interest on any of the Securities of such series or in the
making of any sinking fund payment with respect to such series, the Trustee
shall be protected in withholding such notice if and so long as the Board of
Directors or Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of Securities
of
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such series. For the purpose of this Section the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act,
the Company shall furnish or cause to be furnished to the Trustee
(a) semi-annually with respect to Securities of each series on
May 15 and November 15 of each year or upon such other dates as are set forth in
or pursuant to the Board Resolution or indenture supplemental hereto authorizing
such series, a list, in each case in such form as the Trustee may reasonably
require, of the names and addresses of Holders as of not more than 15 days prior
to the applicable date, and
(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 content 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 is the
Security Registrar no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it
pursuant to Section 312 of the Trust Indenture Act.
Every Holder of Securities or Coupons, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company, the Trustee, any Paying Agent or any Security Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Securities in accordance with Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with
the first May 15 following the first issuance of Securities pursuant to Section
301, if required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
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(b) The Trustee shall transmit the reports required by Section
313(b) of the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in
the manner and to the Persons required by Sections 313(c) and 313(d) of the
Trust Indenture Act. The Company will notify the Trustee when any Securities are
listed on any stock exchange.
SECTION 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture
Act, shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the 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 the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 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;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company, as the case may be, with the conditions and covenants of this Indenture
as may be required from time to time by such rules and regulations;
(3) furnish to the Trustee, not less often than annually, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all the conditions and covenants under this Indenture;
and
(4) transmit within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Section 313(c) of the Trust
Indenture Act, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as
may be required by the rules and regulations prescribed from time to time by the
Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER OR SALE
SECTION 801. Consolidation, Merger or Sale.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or into
any other Person or Persons (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any conveyance,
transfer or lease of the property of the Company as an entirety or substantially
as an entirety, to any other Person (whether or not affiliated with the
Company); provided, however, that:
(a) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the entity formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a Corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia and shall expressly assume, by an indenture (or
indentures, if at such time there is more than one Trustee) supplemental hereto,
executed and delivered by the successor Person to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of,
any premium, if any, and interest on and any Additional Amounts with respect to
all the Securities and the performance of every other covenant of this Indenture
on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no
event which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing; and
(c) each of the Company and the successor Person shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance, transfer or lease and
such supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the
Company into any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture, the Securities and the Coupons.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such series) or
to surrender any right or power herein conferred upon the Company;
(3) to add any additional Events of Default with respect to
all or any series of Securities;
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons or to provide for uncertificated
(commonly known as "book entry") Securities on terms satisfactory in substance
to the Trustee;
(5) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to principal,
to change or eliminate any restrictions on the payment of principal of, any
premium or interest on or any Additional Amounts with respect to Securities, to
permit Registered Securities to be exchanged for Bearer Securities, to permit
Bearer Securities to be exchanged for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided any such action shall not aversely affect the
interests of the Holders of Securities of any series or any Coupons appertaining
thereto in any material respect;
(6) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision;
(7) to secure the Securities;
(8) to establish the form or terms of Securities of any series
and any Coupons appertaining thereto as permitted by Sections 201 and 301;
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions
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of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 607(b);
(10) if allowed without penalty under applicable laws and
regulations, to permit payment in the United States of America (including any of
the states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction of principal, premium, if any, or
interest, if any, on Bearer Securities or Coupons, if any;
(11) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions
arising under this Indenture, provided such action shall not adversely affect
the interests of the Holders of Securities of any series or any Coupons
appertaining thereto in any material respect;
(12) to add to, delete from or revise the conditions,
limitations and restrictions on the authorized amount, terms or purposes of
issue, authentication and delivery of Securities, as herein set forth; or
(13) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article Four; provided that
any such action shall not aversely affect the interests of any Holder of a
Security of such series and any Coupons appertaining thereto or any other
Security or Coupon in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on any Additional Amounts with respect
to, any Security, or reduce the principal amount thereof or the rate of interest
thereon or any Additional Amounts with respect thereto, or any premium payable
upon the redemption thereof or otherwise, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the amount thereof provable in bankruptcy pursuant to Section 504, or adversely
affect the right of repayment at the option of any Holder as contemplated by
Article Thirteen, or change the Place of Payment, or change the coin or currency
in which the principal of, any premium or the interest on, or any Additional
Amounts with respect to, any Security is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the
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case of redemption, on or after the Redemption Date or, in the case of repayment
at the option of the Holder, on or after the date for repayment), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirements of Section 1504 for quorum or voting, or
(3) change any obligation of the Company to maintain an office
or agency in the places and for the purposes specified in Section 1002, or
(4) modify any of the provisions of this Section 902, Section
513, or Section 1007, except to increase any such percentage or to provide with
respect to any particular series the right to condition the effectiveness of any
supplemental indenture as to that series on the consent of the Holders of a
specified percentage of the aggregate principal amount of Outstanding Securities
of such series (which provision may be made pursuant to Section 301 without the
consent of any Holder) or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section, or the
deletion of this proviso, in accordance with the requirements of Sections
607(b) and 901(9).
For the purposes of this Section 902, if the Securities of any
series are issuable upon the exercise of warrants, any holder of an unexercised
and unexpired warrant with respect to such series shall not be deemed to be a
Holder of Outstanding Securities of such series in the amount issuable upon the
exercise of such warrants.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities 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 Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
As a condition to executing, or accepting the additional
trusts created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel and an Officer's Certificate each stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any
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such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities, including any Coupons, of any series authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article 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. If the Company shall so determine, new Securities including any
Coupons of any series so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities including any Coupons of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest and Additional Amounts.
The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
with respect to the Securities of that series in accordance with the terms of
the Securities and this Indenture.
The interest on Securities with Coupons appertaining thereto
shall be payable only upon presentation and surrender of the several Coupons for
such interest installments as are evidenced thereby as they severally mature.
The interest, if any, on any temporary Bearer Security shall be paid, as to any
installment of interest evidenced by a Coupon attached thereto only upon
presentation and surrender of such Coupon and, as to other installments of
interest, only upon presentation of such Security for notation thereon of the
payment of such interest.
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SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issued as Registered Securities,
the Company will maintain in each Place of Payment for any series of Securities
an office or agency where Securities and Coupons, if any of that series may be
presented or surrendered for payment, where securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. If Securities of a series are issuable as Bearer
Securities, the Company will maintain an office or agency, (A) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, where Securities of that series and
related coupons may be presented and surrendered for payment; provided, however,
that if the Securities of that series are listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland Limited, the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain a
Paying Agent for the Securities of that series in London, Luxembourg or any
other required city located outside the United States, as the case may be, so
long as the Securities of that series are listed on such exchange and (B)
subject to any laws or regulations applicable thereto, in a Place of Payment for
that series located outside the United States, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment at the place specified for the purpose with respect to such Securities
as provided in or pursuant to this Indenture, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
Except as otherwise provided in or pursuant to this Indenture,
no payment of principal or interest on Bearer Securities shall be made at any
office or agency of the Company in the United States, by check mailed to any
address in the United States, by transfer to an account located in the United
States or upon presentation or surrender in the United States of a Bearer
Security or coupon for payment, even if the payment would be credited to an
account located outside the United States; provided, however, that, if the
Securities of a series are denominated and payable in Dollars, payment of
principal of and any interest on or any Additional Amounts with respect to any
such Bearer Security shall be made at the office of the Company's Paying Agent
in Chicago, Illinois or in the event that certificated senior notes are issued
or if Depositary Trust Company shall so require, the Company will be required to
appoint a paying agent and security registrar in the City of New York if (but
only if) payment in Dollars of the full amount of such principal, interest or
Additional Amounts, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may also from time to time designate one or more
other offices or agencies where the Securities (including any Coupons, if any)
of one or more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation
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to maintain an office or agency in each Place of Payment for Securities
(including any Coupons, if any) of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Unless otherwise provided in or pursuant to this Indenture, the Company hereby
designates as the Place of Payment for each series as Chicago, Illinois and
initially appoints the office or agency of the Corporate Trust Office of the
Trustee for such purpose. In the event that certificated senior notes are issued
or if Depositary Trust Company shall so require, the Company will appoint a
paying agent and security registrar in the City of New York. Pursuant to Section
301(6) of this Indenture, the Company may subsequently appoint a place or places
in addition to or other than Chicago, Illinois where such Securities may be
payable.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it shall, on or before each due date
of the principal of (and premium, if any) or interest on or any Additional
Amounts with respect to any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum of Money
sufficient to pay the principal (and premium, if any), interest or Additional
Amounts so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and shall promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it shall, on or prior to (but in the case of payments
to be made at a Place of Payment outside of the United States, its territories,
possessions and areas subject to its jurisdiction, at least one New York
Business Day before) each due date of the principal of, any premium or interest
on or any Additional Amounts with respect to any Securities of such series,
deposit with any Paying Agent a sum of Money sufficient to pay the principal or
any premium, interest or Additional Amounts so becoming due, such sum to be held
in trust for the benefit of the Persons entitled thereto, and (unless such
Paying Agent is the Trustee) the Company shall promptly notify the Trustee of
its action or failure so to act.
The Company shall cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on or any Additional Amounts with respect
to Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on or any Additional
Amounts with respect to the Securities of such series; and
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(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, 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; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such Money.
Any Money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on or any Additional Amounts with respect to any
Security of any series and remaining unclaimed for 2 years after such principal
(and premium, if any) or interest or Additional Amounts shall have become due
and Payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security and Coupon, if any, shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such Money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in an Authorized
Newspaper in each Place of Payment for such series or to be mailed to Holders of
Registered Securities of such series notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing nor shall it be later than 2 years
after such principal and any premium or interest or Additional Amounts shall
have become due and payable, any unclaimed balance of such Money then remaining
will be repaid to the Company.
SECTION 1004. Additional Amounts.
If any Securities of a series provide for the payment of
Additional Amounts, the Company agrees to pay to the Holder of any such Security
or any Coupon appertaining thereto Additional Amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Security
of any series or any Coupon or the net proceeds received on the sale or exchange
of any Security of any series, such mention shall be deemed to include mention
of the payment of Additional Amounts provided by the terms of such series
established hereby or pursuant hereto to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
such terms and express mention of the payment of Additional Amounts (if
applicable) in any provision hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
Except as otherwise provided in or pursuant to this Indenture,
if the Securities of a series provide for the payment of Additional Amounts, at
least 10 days prior to the first Interest Payment Date with respect to such
series of Securities (or if the Securities of such series shall not bear
interest prior to Maturity, the first day on which a payment of principal is
made), and at least 10 days prior to each date of payment of principal or
interest if there has been any change with respect to the matters set forth in
the
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below-mentioned Officers' Certificate, the Company shall furnish to the Trustee
and the principal Paying Agent or Paying Agents, if other than the Trustee, an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal of or interest on the Securities of
such series shall be made to Holders of Securities of such series or the Coupons
appertaining thereto who are United States Aliens without withholding for or on
account of any tax, assessment or other governmental charge described in the
Securities of such series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities or Coupons and the
Company agrees to pay to the Trustee or such Paying Agent the Additional Amounts
required by the terms of such Securities. 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.
SECTION 1005. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate 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 1006. Limitation on Liens.
Except as hereinafter in this Section 1006 expressly permitted
and as permitted by Section 801, so long as any of the Securities remain
Outstanding, the Company will not at any time directly or indirectly create,
assume or suffer to exist, and will not cause, suffer or permit any Subsidiary
to create, assume or suffer to exist, otherwise than in favor of the Company or
a Subsidiary, any mortgage, pledge, lien, encumbrance of or upon or security
interest (collectively, "Liens") upon any of its properties or assets, real,
personal or mixed, whether owned at the date of this Indenture or thereafter
acquired, or of or upon, any income or profits therefrom, without making
effective provision, and the Company covenants that in any such case it will
make or cause to be made effective provision, whereby the Securities then or
thereafter Outstanding shall be secured by such Liens equally and ratably with
any and all other obligations and indebtedness thereby secured, so long as any
such other obligations or indebtedness shall be so secured.
Nothing in this Section 1006 shall be construed to prevent the
Company or any Subsidiary from creating, assuming or suffering to exist Liens of
the following character, to all of which the provisions of the first paragraph
of this Section 1006 shall not be applicable:
(a) Liens existing as of the date of this Indenture;
(b) Any purchase money mortgage or Lien created to secure all
or part of the purchase price of any property (or to secure a loan made to the
Company or any Subsidiary to enable it to acquire
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the property described in such mortgage or in any applicable security
agreement); provided that such Lien shall extend only to the property so
acquired, improvements thereon, replacements thereof and the income or profits
therefrom;
(c) Liens on any property at the time of the acquisition
thereof, whether or not assumed by the Company or a Subsidiary; provided that
such Lien shall extend only to the property so acquired, improvements thereon,
replacements thereof and the income or profits therefrom;
(d) Liens on any property or any contract for the sale of any
product or service, or any rights thereunder or any proceeds therefrom, acquired
or constructed by the Company or a Subsidiary, and created not later than twelve
months after (i) such acquisition or completion of such construction, or (ii)
commencement of operation of such property, whichever is later; provided that
such Lien shall extend only to the property so acquired or constructed,
improvements thereon, replacements thereof and the income or profits therefrom;
(e) Liens on the properties or assets, real, personal or
mixed, of a Subsidiary, or of or upon or in any income or profits therefrom,
which is outstanding at the time such Subsidiary becomes a Subsidiary;
(f) Liens created or assumed by the Company or a Subsidiary on
coal, geothermal, oil, natural gas, inert gas, other hydrocarbon or mineral
properties owned or leased by the Company or a Subsidiary to secure loans to the
Company or a Subsidiary for the purpose of developing such properties;
(g) Liens on any investment of the Company or a Subsidiary in
any Person other than a Subsidiary or any security representing any investment
of the Company or a Subsidiary; for the purposes of this Clause (g),
"investment" means any equity investment in any Person, any obligation of any
Person for money borrowed or for the deferred purchase price of property which
is owed to the Company or a Subsidiary, as the case may be, and any amount
advanced to any person by the Company or any Subsidiary, excluding, however,
current accounts payable other than for cash advances;
(h) Any Lien not otherwise permitted by this Section 1006 if,
after giving effect to the creation or assumption of the proposed mortgage,
pledge, lien, encumbrance or security interest the sum of (i) all indebtedness
of the Company and its Subsidiaries secured by Liens not otherwise permitted by
this Section 1006, and (ii) to the extent not included in (i) above, all
Attributable Debt of the Company and its Subsidiaries does not exceed 10% of
Consolidated Capitalization;
(i) Any refunding or extension of maturity, in whole or in
part, of any obligation or indebtedness secured by any Lien created, existing or
assumed in accordance with the provisions of Clauses (a) through (h) above,
inclusive, provided that the principal amount of the obligation or indebtedness
secured by such refunding or extended Liens shall not exceed the principal
amount of the obligation or indebtedness to be refunded or extended outstanding
at the time of such refunding or extension, together with related financing
costs, and that such refunding or extended Liens shall be limited in lien to the
same property that secured the obligation or indebtedness refunded or extended,
and property substituted therefor and property acquired after the date thereof
and subject to the lien thereof, in accordance with the provisions of such
refunding or extension;
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(j) Liens on any office equipment or data processing equipment
(including, without limitation, computer and computer peripheral equipment) or
any motor vehicles, tractors or trailers;
(k) Liens of or upon or in current assets of the Company or a
Subsidiary, determined in accordance with GAAP, created or assumed to secure
indebtedness incurred in the ordinary course of business;
(l) Mechanics' or materialmen's liens; any lien or charge
arising by reason of pledges or deposits to secure payment of or to permit
participation in workmen's compensation, unemployment insurance, old age
pensions or other Social Security or other insurance or to permit
self-insurance; good faith deposits in connection with tenders or leases of real
estate, bids or contracts or in connection with the financing of the acquisition
or construction of property to be used in the business of the Company or a
Subsidiary; deposits to secure public or statutory obligations; deposits to
secure or in lieu of surety, stay or appeal bonds; deposits as security for the
payment of taxes or assessments or other similar charges; judgment liens against
the Company or any Subsidiary thereof in an aggregate amount not in excess
$5,000,000, or any such judgment lien so long as the finality of such judgment
is being contested and execution thereon is stayed and which has been appealed
and secured, if necessary, by the filing of an appeal bond; and liens for taxes
or assessments for the current year or which are not due or which remain payable
without penalty or which are being contested in good faith and against which an
adequate reserve has been established;
(m) Any lien arising by reason of deposits with or the giving
of any form of security to any governmental agency or any body created or
approved by law or governmental regulation for any purpose at any time in
connection with the financing of the acquisition or construction of property to
be used in the business of the Company or a Subsidiary, or as required by law or
governmental regulation as a condition to the transaction of any business or the
exercise of any privilege or license, or to permit the maintenance of
self-insurance or participation in any fund for liability on any insurance risks
or in connection with workmen's compensation, unemployment insurance, old age
pensions or other social security or to share in the privileges or benefits
required for companies participating in such arrangements;
(n) Liens which are payable, both with respect to principal
and interest, solely out of the proceeds of natural gas, oil, coal, geothermal
resources, inert gas, hydrocarbons or minerals to be produced from the property
subject thereto and to be sold or delivered by the Company or a Subsidiary;
(o) Liens to secure indebtedness incurred to finance advances
made by the Company or any Subsidiary to any third party for the purpose of
financing oil, natural gas, hydrocarbon, inert gas or other mineral exploration
or development, provided that such liens shall extend only to the receivables of
the Company or such Subsidiary in respect of such advances;
(p) Any rights reserved in others to take or reserve any part
of the natural gas, oil, coal, geothermal resources, inert gas, other
hydrocarbons or mineral produced at any time on any property of the Company or a
Subsidiary;
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(q) Any rights reserved to or vested in, or any obligations or
duties to, any person, firm, corporation or governmental authority by the terms
of any franchise, grant, lease, license, easement or permit or by any provision
of law with respect to any property of the Company or a Subsidiary.
(r) Leases (whether pursuant to Sale and Leaseback
Transactions or otherwise) now or hereafter existing and any renewals or
extensions thereof;
(s) Liens upon the underlying interests in property covered by
any lease, contract, easement or right-of-way existing at the time of the
acquisition thereof; easements or similar encumbrances, the existence of which
does not materially impair the use of the property subject thereto for the
purposes for which it was acquired; liens upon rights-of-way for pipeline or
distribution plant purposes and undetermined liens and charges incidental to
construction or maintenance; or defects and irregularities in the titles to any
property (including right-of-way) which are not material to the business of the
Company and its Subsidiaries considered as a whole;
(t) The lien reserved in leases for rent and for compliance
with the terms of the lease in the case of leasehold estates;
(u) Zoning laws and ordinances; and
(v) Liens which secure indebtedness of a Subsidiary to the
Company or another Subsidiary.
If at any time the Company or any Subsidiary shall create or
assume any Lien to which the covenant in the first paragraph of this Section
1006 is applicable, the Company will promptly deliver to the Trustee an
Officers' Certificate, stating that such covenant has been complied with, and an
Opinion of Counsel, stating that in his opinion such covenant has been complied
with and that any instruments executed by the Company or any Subsidiary in the
performance of such covenant complied with the requirements thereof.
In the event that the Company or any Subsidiary shall
hereafter secure the Securities equally and ratably with any other obligation or
indebtedness pursuant to the provisions of this Section 1006, the Trustee is
hereby authorized to enter into an indenture supplemental hereto and to take
such action, if any, as it may deem advisable to enable it to enforce
effectively the rights of the Holders of the Securities so secured, equally and
ratably with such other obligation or indebtedness.
The Trustee may accept an Officers' Certificate and Opinion of
Counsel as conclusive evidence that any such supplemental indenture or steps
taken to secure the Securities equally and ratably comply with the provisions of
this Section 1006.
SECTION 1007. Waiver of Covenant.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Article Eight and Sections 1005
and 1006, if before the time for such compliance the Holders of (i) a majority
in principal amount of the Outstanding Securities or (ii) in case less than all
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of the several series of Securities then Outstanding are affected by the
omission, at least a majority in principal amount of the Outstanding Securities
of each series so affected voting as a single class shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
SECTION 1008. Statements as to Compliance; Notice of Certain Defaults.
(a) The Company shall deliver to the Trustee, within
120 days after the end of each fiscal year, a written statement (which need not
be contained in or accompanied by an Officers' Certificate) signed by the
principal executive officer, the principal financial officer or the principal
accounting officer of the Company stating that
(1) a review of the activities of the Company during such year
and of performance under this Indenture has been made under his or her
supervision, and
(2) to the best of his or her knowledge, based on such review,
(a) the Company has complied with all the conditions and covenants imposed on it
under this Indenture throughout such year, or, if there has been a default in
the fulfillment of any such condition or covenant, specifying each such default
known to him or her and the nature and status thereof, and (b) no event has
occurred and it continuing which is, or after notice or lapse of time or both
would become, an Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and status
thereof.
(b) The Company shall deliver to the Trustee, within
five days after the occurrence thereof, written notice of any event which after
notice or lapse of time or both would become an Event of Default.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities (including Coupons, if any) of any series which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified or contemplated by Section 301
for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities
(including Coupons, if any) shall be evidenced by a Board Resolution. In case of
any redemption at the election of the Company of all or less than all of the
Securities (including Coupons, if any) of any series, the Company shall, at
least 60
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days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Securities of such series to be redeemed. In
the case of any redemption of Securities (including Coupons, if any) prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities and Coupons, if any, or elsewhere in this Indenture, the Company
shall furnish the Trustee with an Officers' Certificate evidencing compliance
with such restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities (including Coupons, if any) of
any series with the same terms are to be redeemed, the particular Securities
(including Coupons, if any) to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities (including Coupons, if any) of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities (including Coupons, if any) of
that series or any integral multiple thereof) of the principal amount of
Securities (including Coupons, if any) of such series of a denomination larger
than the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of
the Securities (including Coupons, if any) selected for redemption and, in the
case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given not less than 30 nor more
than 60 days prior to the Redemption Date, unless a shorter period is specified
in the Securities to be redeemed, to each Holder of Securities to be redeemed,
as provided in Section 105.
Each such notice of redemption shall specify the Redemption
Date, the Redemption Price, the Place or Places of Payment, the CUSIP number of
such Securities, if any, that the Securities of such series are being redeemed
at the option of the Company pursuant to provisions contained in the terms of
the Securities of such series or in a supplemental indenture establishing such
series, if such be the case, together with a brief statement of the facts
permitting such redemption, that payment will be made upon presentation and
surrender of the applicable Securities, that all Coupons, if any, maturing
subsequent to the date fixed for redemption shall be void, that any interest
accrued to the Redemption Date will be paid as specified in said notice, and
that on and after said Redemption Date any interest thereon or, in case of
partial redemptions, on the portions thereof to be redeemed, will cease to
accrue. If less than all the Securities of any series are to be redeemed, the
notice of redemption shall specify the numbers of the Securities of such series
to be redeemed, and, if only Bearer Securities of any series are to
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be redeemed and if such Bearer Securities may be exchanged for Registered
Securities, the last date on which exchanges of Bearer Securities for Registered
Securities not subject to redemption may be made. In case any Security of any
series is to be redeemed in part only, the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall state that on
and after the Redemption Date, upon surrender of such Security and any Coupons
appertaining thereto, a new Security or Securities of such series in principal
amount equal to the unredeemed portion thereof and with appropriate Coupons will
be issued, or, in the case of Registered Securities providing appropriate space
for such notation, at the option of the Holders, the Trustee, in lieu of
delivering a new Security or Securities as aforesaid, may make a notation on
such Security of the payment of the redeemed portion thereof.
Notice of redemption of Securities and Coupons, if any, to be
redeemed at the election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or before (but in the case of payments to be made at a
Place of Payment outside of the United States, its territories, possessions and
areas subject to its jurisdiction, at least one New York Business Day before)
10:00 A.M., New York City time, on any Redemption Date, the Company shall
deposit in immediately available funds with the Trustee or with a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate and hold in
trust as provided in Section 1003) an amount of Money in the relevant currency
(or a sufficient number of currency units, as the case may be) sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) any accrued interest on and Additional Amounts with respect to all
the Securities or portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest and the Coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Except as provided in the
next succeeding paragraph, upon surrender of any such Security (including
Coupons, if any) for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued
interest and Additional Amounts to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of Coupons for such interest (at an Office or Agency located outside
the United States except as otherwise provided in Section 1002), and provided,
further, that installments of interest on Registered Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
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If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date, such
Bearer Security may be paid after deducting from the Redemption Price an amount
equal to the face amount of all such missing 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 the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent 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;
provided, however, that any interest or Additional Amounts represented by
Coupons shall be payable only upon presentation and surrender of those Coupons
at an office or agency located outside of the United States except as otherwise
provided pursuant to Sections 901(10) and 1002.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security (including Coupons, if any) which is
to be redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to, the Company 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 Security without service charge, a new Registered
Security or Securities (with appropriate Coupons, if any, attached) of the same
series, containing identical terms and provisions, 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 Security
(including Coupons, if any) so surrendered. If a Security in global from is so
surrendered, the Company shall execute and the Trustee shall authenticate and
deliver to the U.S. Depository or other depository for such Security in global
form as shall be specified in the Company Order with respect thereto, to the
Trustee, without service charge, a new Security in global form in a denomination
equal to and in exchange for the unredeemed portion of the principal of the
Security in global form so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in
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excess of such minimum amount provided for by the terms of Securities of any
series is herein referred to as an "optional sinking fund payment." If provided
for by the terms of Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 1202. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver outstanding Securities of a series
(other than any previously called for redemption or any of such Securities in
respect of which cash shall have been released to the Company), together in the
case of any Bearer Securities of such series with all unmatured Coupons
appertaining thereto, and (2) may apply as a credit Securities of a series which
have been redeemed either at the election of the Company pursuant to the terms
of such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided that such Securities have not
been previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Securities
for redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officer's Certificate specifying the amount of the next ensuing mandatory
sinking fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 nor more than 60
days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Securities of any series which are repayable at the option of
the Holders thereof before their Stated Maturity shall be repaid in accordance
with the terms of the Securities of such series. The repayment of any principal
amount of Securities pursuant to such option of the Holder to require repayment
of Securities before their Stated Maturity, for purposes of Section 309, shall
not operate as a
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payment, redemption or satisfaction of the indebtedness represented by such
Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Section
1301, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Holders
of such Securities on or before the close of business on the repayment date an
amount not less than the repayment price payable by the Company on repayment of
such Securities, and the obligation of the Company to pay the repayment price of
such Securities shall be satisfied and discharged to the extent such payment is
so paid by such purchasers.
The Company shall provide written notice to the Trustee at
least 30 days before any tender period related to a repayment pursuant to this
Section 1301.
ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
SECTION 1401. Applicability of Article.
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same Currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series, any amount in
respect of any Security denominated in a Currency other than Dollars shall be
treated for any such action or distribution as that amount of Dollars that could
be obtained for such amount at the noon buying rate in the City of New York for
cable transfers in foreign currencies as certified for customs purposes by the
Federal Reserve Bank of New York and as of the record date with respect to
Registered Securities of such series (if any) for such action, determination of
rights or distribution (or, if there shall be no applicable record date, such
other date reasonably proximate to the date of such action, determination of
rights or distribution) as the Company may specify in a written notice to the
Trustee.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May be Called.
A meeting of Holders of Securities of such series may be
called at any time and from time to time pursuant to this Article to make, give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be made, given or taken by Holders
of Securities of such series.
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SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place in the Borough of Manhattan, The City of New York
or, if Securities of such series are to be issued as Bearer Securities, in
London, as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more than 180
days prior to the date fixed for the meeting.
(b) In case at any time the Company (by or pursuant to a Board
Resolution) or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, or, if Securities of
such series are to issued as Bearer Securities, in London for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities
of any series, a Person shall be (1) a Holder of one or more Outstanding
Securities of such series, or (2) a Person appointed by an instrument in writing
as proxy for a Holder or Holders of one or more Outstanding Securities of such
series by such Holder or Holders. The only Persons who shall be entitled to be
present or to speak at any meeting of Holders of Securities of any series shall
be the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of
the Outstanding Securities of a series shall constitute a quorum for a meeting
of Holders, of Securities of such series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than
66 2/3% in principal amount of the Outstanding Securities of a series, the
Persons entitled to vote 66 2/3% in principal amount of the Outstanding
Securities of such series shall constitute a quorum. In the absence of a quorum
within 30 minutes after the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for period of not less
than 10 days as determined by the chairman of the meeting prior
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to the adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1502(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by the proviso to Section 902, any
resolution represented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted only by the affirmative
vote of the Holders of a majority in principal amount of the Outstanding
Securities of that series; provided, however, that, except as limited by the
proviso to Section 902, any resolution with respect to any consent or waiver
which this Indenture expressly provides may be given by the Holders of not less
than 66 2/3% in principal amount of the Outstanding Securities of a series may
be adopted at a meeting or an adjourned meeting duly convened and at which a
quorum is present as aforesaid only by the affirmative vote of the Holders of
66 2/3% in principal amount of the Outstanding Securities of that series; and
provided, further, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities
of such series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section
shall be binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not present or represented at the meeting.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities of such series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent
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chairman and a permanent secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting.
(c) At any meeting, each Holder of a Security of such series
or proxy shall be entitled to one vote for each $1,000 principal amount of
Securities of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of
Holders of Securities of any series shall be by written ballots on which shall
be subscribed the signature of the Holders of Securities of such series or of
their representative by proxy and the principal amounts and serial number of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record, at least in triplicate,
of the proceedings of each meeting of Holders of Securities of any series shall
be prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 1502 and, if applicable, Section 1504.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
QUESTAR MARKET RESOURCES, INC.
By
-------------------------------------
[SEAL] Name:
Title:
Attest:
- -------------------------------
Name:
Title:
BANK ONE TRUST COMPANY, NA, Trustee
By
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[SEAL] Name:
Title:
Attest:
- -------------------------------
Name:
Title:
76
<PAGE>
STATE OF UTAH )
: SS.:
COUNTY OF SALT LAKE )
On this ____ day of _______, 2000 before me personally
appeared _________, who acknowledged himself to be the _________________ of
QUESTAR MARKET RESOURCES, INC., a Utah corporation, and that he, as such
_________________, being authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing the name of the corporation by
himself as such ___________________.
IN WITNESS WHEREOF, I hereunto set may hand and official seal.
-------------------------------------
Notary Public
STATE OF ILLINOIS )
: SS.:
COUNTY OF _____________ )
On this ____ day of _______, 2000 before me personally came
_________, to me known, who, being by me duly sworn, did depose and say that he
is a __________________ of BANK ONE TRUST COMPANY, NA, the national banking
association described in and which executed the foregoing instrument; that he
knows the seal of said national banking association; that the seal affixed to
said instrument is such seal; that it was so affixed by authority of the Board
of Directors of said national banking association, and that he signed his name
thereto by like authority.
-------------------------------------
Notary Public
[NOTARY SEAL]
77
<PAGE>
[Unless this certificate is presented by an authorized representative of The
Depository Trust Company, to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as is requested by an authorized
representative of The Depository Trust Company (and any payment is made to Cede
& Co. or to such other entity as is requested by an authorized representative of
The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
[THIS SECURITY IS A GLOBAL SECURITY AS REFERRED TO IN THE INDENTURE HEREINAFTER
REFERENCED. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL 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.]
QUESTAR MARKET RESOURCES, INC.
___% Senior Notes Due 20__
No._______ $
QUESTAR MARKET RESOURCES, INC., a corporation duly organized
and existing under the laws of Utah (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to or duly provide for
______________, or registered assigns, the principal sum of __________________
on ________, 20__
<PAGE>
and to pay interest thereon from _________, 2000 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on May 1 and November 1 in each year, commencing ___________,
2000, at the rate of ___% per annum, until the principal hereof is paid or made
available for payment, and (to the extent that the payment of such interest
shall be legally enforceable) at the rate of ___ % per annum on any overdue
principal and premium and on any overdue installment of interest. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, dated as of _______, 2000 (herein
called the "Indenture"), between the Company and Bank One Trust Company, NA,
as Trustee (herein called the "Trustee"), be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be the
April 15 or October 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Company in the city
of Chicago, Illinois or The City of New York maintained for such purpose, and at
any other
2
<PAGE>
office or agency maintained by the Company for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under the Indenture, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated above, limited in aggregate principal amount to
$150,000,000.
The Securities of this series are subject to redemption upon
not less than 30 days' notice by mail, at any time, as a whole or in part, at
the election of the Company, at a Redemption Price equal to the principal amount
plus the Make Whole Amount, together with accrued interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to above, all as provided in the Indenture. As used herein
the following terms will have the definitions given below:
"Make-Whole Amount" for any Security means an amount equal to
the excess, if any, of (a) the present value of the remaining principal and
interest payments on such Security through the Stated Maturity thereof, computed
using a
3
<PAGE>
discount rate equal to the Treasury Rate plus ________________ basis points,
over (b) the outstanding principal amount of such Security.
"Treasury Rate" means, at any date of determination, the yield
to maturity as of such date (as compiled by and published in the most recent
Federal Reserve Statistical Release H.15 (519), which has become publicly
available at least two business days prior to the date of the redemption notice
for which such computation is being made, or if such Statistical Release is no
longer published, as reported in any publicly available source of similar market
data) of United States Treasury securities with a constant maturity most nearly
equal to the Make-Whole Average Life; provided, however, that if the Make-Whole
Average Life is not equal to the constant maturity of the United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the Make-Whole Average Life is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Make Whole Average Life" means, with respect to any date of
redemption for any Security, the number of years (calculated to the nearest one-
twelfth) from such redemption date to the Stated Maturity of such Security.
In the event of redemption of this Security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
4
<PAGE>
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66 2/3% in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium, if any) and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and
5
<PAGE>
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated:
QUESTAR MARKET RESOURCES, INC.
By
----------------------------------
Attest:
- ----------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
BANK ONE TRUST COMPANY, NA
as Trustee
By
----------------------------------
Authorized Signature
7
<PAGE>
Questar Corporation
180 East 100 South
P.O. Box 45433
Salt Lake City, UT 84145
Connie C. Holbrook
Vice President, General Counsel,
and Corporate Secretary
Tel: 801 324 5202
Fax: 801 324 5483
E-mail: [email protected]
April 12, 2000
Questar Market Resources, Inc.
180 East 100 South Street
P.O. Box 45601
Salt Lake City, Utah 84145-0601
Ladies and Gentlemen:
Re: Questar Market Resources, Inc., Registration Statement on Form S-3
Relating to $150,000,000 Principal Amount of Senior Notes
I am acting as counsel for Questar Market Resources, Inc., a Utah
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-3 to be filed by the Company with the
Securities and Exchange Commission (the "Commission") on the date of this letter
(the "Registration Statement"). The Registration Statement relates to the
issuance and sale of up to $150,000,000 aggregate principal amount of the
Company's Senior Notes (the "Notes") to be issued pursuant to an indenture (the
"Indenture") by and between the Company and Bank One Trust Company, NA, as
trustee (the "Trustee").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"1933 Act").
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
such documents, agreements, certificates and corporate or other records as I
have deemed necessary or appropriate as a basis for this opinion. This includes:
(i) the Registration Statement (together with the form of preliminary prospectus
that is a
<PAGE>
part of it) in the form to be filed by the Company with the Commission on the
date of this letter; (ii) the Indenture; (iii) the form of the Notes issuable
under the Indenture; (iv) the Form T-1 of the Trustee being filed with the
Commission as Exhibit 25.01 to the Registration Statement pursuant to the Trust
Indenture Act of 1939, as amended; (v) the Articles of Incorporation and Bylaws
of the Company, each as amended through the date of this letter; (vi)
resolutions of the Board of Directors of the Company relating to the filing of
the Registration Statement and the proposed issuance of the Notes; and (vii) the
form of Purchase Agreement to be entered into among the Company, Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Inc. Banc of America Securities LLC,
Banc One Capital Markets, Inc., and TD Securities (USA) Inc. and being filed as
Exhibit 1.01 to the Registration Statement. In my examination, I have assumed
the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity of all documents submitted to me as originals, the conformity
to the original documents submitted to me as certified or photostatic copies and
the authenticity of the originals of such latter documents. As to any facts
material to this opinion that were not independently established or verified, I
have relied upon statements and representations of officers and other
representatives of the Company and others.
I am admitted to the Bar of the State of Utah, and I express no opinion
as to the laws of any other jurisdiction. To the extent that the opinion set
forth below relates to matters under the laws of the State of New York, I have
relied on the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel for the Company, which is being filed as Exhibit 5.02 to the
Registration Statement.
Based on and subject to the foregoing, I have formed the following
opinion: When (1) the Registration Statement has become effective under the 1933
Act, (2) the definitive terms of the Notes and of their issue and sale have been
duly established in conformity with the Indenture so as not to violate any
applicable law or agreement or instrument then binding on the Company, and (3)
the Notes have been duly executed and authenticated in accordance with such
Indenture and have been issued and sold as contemplated in the Registration
Statement, the prospectus contained in it and any supplement (the "Prospectus"),
the Notes will constitute valid and legally binding obligations of the Company,
entitled to the benefits provided by the Indenture and enforceable against the
Company in accordance with their terms, except to the extent that enforcement
may be limited by (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
in equity).
2
<PAGE>
I further consent to the reference made to me under the heading "Legal
Matters" in the Prospectus and the filing of this opinion as Exhibit 5.01 to the
Registration Statement. In giving such consent, I do not admit that I am in the
category of persons whose consent is required under Section 7 of the 1933 Act.
Sincerely,
/s/ Connie C. Holbrook
Connie C. Holbrook
Vice President, General Counsel
and Corporate Secretary
3
<PAGE>
[SASM&F Letterhead]
April 12, 2000
Connie C. Holbrook, Esq.
Questar Market Resources, Inc.
180 East 100 South Street
P.O. Box 45601
Salt Lake City, Utah 84145-0601
Re: Questar Market Resources, Inc.
Registration Statement on Form S-3
----------------------------------
Dear Ms. Holbrook:
We have acted as special counsel to Questar Market Resources,
Inc., a Utah corporation (the "Company"), in connection with the public offering
of $150,000,000 aggregate principal amount of the Company's Senior Notes (the
"Senior Notes") to be issued under an indenture (the "Indenture") to be entered
into between the Company and Bank One Trust Company, NA, as trustee (the
"Trustee").
This opinion is being furnished to you in connection with your
opinion to be furnished in accordance with the requirements of Item 601(b)(5) of
Regulation S-K under the Securities Act of 1933, as amended (the "Act").
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-3 as filed with the Securities and Exchange
Commission (the "Commission") on the date hereof under the Act (such
Registration Statement being hereinafter referred to as the "Registration
Statement"); (ii) the form of the Purchase Agreement (the "Purchase Agreement")
proposed to be entered into between the Company, as issuer, and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner &
<PAGE>
Questar Market Resources, Inc.
April 12, 2000
Page 2
Smith Incorporated, Banc One Capital Markets, Inc., Banc of America Securities
LLC and TD Securities (USA) Inc., as representatives of the several underwriters
named therein (the "Underwriters"), filed as an exhibit to the Registration
Statement; (iii) the form of the Indenture filed as an exhibit to the
Registration Statement; (iv) the form of Senior Notes. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such records of the Company and such agreements, certificates of public
officials, certificates of officers or other representatives of the Company and
others, and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. In making our
examination of documents executed or to be executed by the parties, we have
assumed that such parties (including the Company) had or will have the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and, except
as set forth below with respect to the Company, the validity and binding effect
thereof. We have also assumed that (a) the Company has been duly organized and
is validly existing under the laws of the State of Utah and that the Company has
complied with all aspects of Utah law in connection with the Indenture and the
transactions contemplated by the Registration Statement and (b) the execution
and delivery by the Company of the Indenture and the Senior Notes and the
performance of its obligations thereunder do not and will not violate, conflict
with or constitute a default under (i) any agreement or instrument to which the
Company or its properties is subject, (ii) any law, rule, or regulation to which
the Company is subject, (iii) any judicial or regulatory order or decree of any
governmental authority or (iv) any consent, approval, license, authorization or
validation of, or filing, recording or registration with any governmental
authority. As to any facts material to the opinions expressed herein which we
have not independently established or verified, we have relied upon statements
and representations of officers and other representatives of the Company and
others.
Our opinions set forth herein are limited to the laws of the
State of New York which are normally applicable to transactions of the type
contemplated by the Indenture and the Senior Notes and, to the extent that
judicial or regulatory orders or decrees or consents, approvals, licenses,
authorizations, validations, filings, recordings or registrations with
governmental authorities are relevant, to those required under such laws (all of
the foregoing being referred to as "Opined on Law"). We do not express any
opinion with respect to the law of any jurisdiction other than the foregoing
jurisdictions relating to Opined on Law or as to the effect of any such non
opined law on the opinions herein stated.
<PAGE>
Questar Market Resources, Inc.
April 12, 2000
Page 3
Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that when the Senior Notes have been duly executed and authenticated in
accordance with the terms of the Indenture and have been delivered to and paid
for by the Underwriters as contemplated by the Purchase Agreement, the Senior
Notes will be valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to the
reference to our firm under the caption "Legal Matters" in the Registration
Statement. In giving this consent, we do not thereby admit that we are included
in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE>
EXHIBIT 12.01
QUESTAR MARKET RESOURCES, INC. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for 1997, 1998 and 1999 are derived from
audited financial statements of Questar Market Resources. The ratios for 1995
and 1996 are derived from unaudited financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations before income taxes ..... $64,450 $15,706 $49,521 $56,134 $43,638
Less income, plus loss from Canyon Creek................... (231) (202) (160) 35 (141)
Plus distribution from Canyon Creek........................ 297 281 334 60 314
Plus loss from Questar WMC................................. 65 546 114
Plus debt expense.......................................... 17,363 12,631 10,882 8,699 6,323
Plus interest capitalized during construction.............. 357 1,363 604 70 63
Plus interest portion of rental expense.................... 855 699 556 500 441
------- ------- ------- ------- -------
$83,091 $30,478 $61,802 $66,044 $50,752
======= ======= ======= ======= =======
Fixed Charges
Debt expense............................................... $17,363 $12,631 $10,882 $ 8,699 $ 6,323
Plus interest capitalized during construction.............. 357 1,363 604 70 63
Plus interest portion of rental expense.................... 855 699 556 500 441
------- ------- ------- ------- -------
$18,575 $14,693 $12,042 $ 9,269 $ 6,827
======= ======= ======= ======= =======
Ratio of Earnings to Fixed Charges......................... 4.47 2.07 5.13 7.13 7.43
</TABLE>
- ------------------
1. For purposes of this presentation, earnings represent income from continuing
operations before income taxes and fixed charges. Fixed charges consist of
total interest charges and amortization of debt issuance costs and the
interest portion of rental costs (which is estimated at 50%).
2. Write-downs of investment in oil and gas properties reduced income before
income taxes by $31 million in 1998 and $9 million in 1997.
<PAGE>
Exhibit 23.01
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Questar Market
Resources, Inc. for the registration of $150,000,000 of senior notes and to the
incorporation by reference therein of our report dated February 7, 2000, with
respect to the consolidated financial statements of Questar Market Resources,
Inc. for the year ended December 31, 1999 included in its Report on Form 10
dated April 11, 2000, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
----------------------
Ernst & Young LLP
Salt Lake City, Utah
April 10, 2000
1
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
----------------------------
Bank One Trust Company, National Association
(Exact name of trustee as specified in its charter)
A National Banking Association 31-0838515
(I.R.S. employer
identification number)
100 East Broad Street, Columbus, Ohio 43271-0181
(Address of principal executive offices) (Zip Code)
Bank One Trust Company, NA
One North State Street, 9th Floor
Chicago, Illinois 60602
Attn: Sandra L. Caruba, Vice President and Senior Counsel, (312) 336-9436
(Name, address and telephone number of agent for service)
-----------------------------
QUESTAR MARKET RESOURCES, INC.
(Exact name of obligor as specified in its charter)
Utah 87-0287750
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
180 E. 100 South
P. O. Box 45601 84145-0601
Salt Lake City, Utah (ZIP Code)
(Address of principal executive offices)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of
this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.
2. A copy of the certificate of authority of the
trustee to commence business.
3. A copy of the authorization of the trustee to
exercise corporate trust powers.
4. A copy of the existing by-laws of the trustee.
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bank One Trust Company, National Association, a
national banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of Eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 29th day of March,
2000.
Bank One Trust Company, National Association,
Trustee
By /s/ Sandra L. Caruba
Sandra L. Caruba
Vice President
0<PAGE>
EXHIBIT 1
A COPY OF THE ARTICLES OF ASSOCIATION OF THE
TRUSTEE NOW IN EFFECT
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
of
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
FIRST. The title of this Association shall be BANK ONE TRUST
COMPANY, NATIONAL ASSOCIATION.
SECOND. The main office of the Association shall be in the City of
Columbus, County of Franklin, State of Ohio.
The business of the Association will be limited to the fiduciary powers and the
support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.
THIRD. The Board of Directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is more recent. Any combination of common or preferred stock of the
Association or holding company may be used.
Any vacancy in the Board of Directors may be filled by action of a majority of
the remaining directors between meetings of shareholders. The Board of Directors
may not increase the number of directors between meetings of shareholders to a
number which: (1) exceeds by more than two the number of directors last elected
by shareholders where the number was 15 or less; or (2) exceeds by more than
four the number of directors last elected by shareholders where the number was
16 or more, but in no event shall the number of directors exceed 25.
Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the Board of Directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full Board of Directors, or
by resolution of shareholders at any annual or special meeting. Honorary or
advisory directors shall not be counted to determine the number of directors of
the Association or the presence of a quorum in connection with any board action,
and shall not be required to own qualifying shares.
<PAGE>
FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the Bylaws or, if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in the event of a legal holiday on the following banking day, an
election may be held on any subsequent day within 60 days of the day fixed, to
be designated by the Board of Directors or, if the directors fail to fix the
day, by shareholders representing two-thirds of the shares issued and
outstanding. In all cases at least 10 days advance notice of the meeting shall
be given to the shareholders by first class mail.
In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares such shareholder
owns by the number of directors to be elected. Those votes may be cumulated and
cast for a single candidate or may be distributed among two or more candidates
in the manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by such
shareholder. If the issuance of preferred stock with voting rights has been
authorized by a vote of shareholders owning a majority of the common stock of
the association, preferred shareholders will have cumulative voting rights and
will be included within the same class as common shareholders, for purposes of
elections of directors.
A director may resign at any time by delivering written notice to the Board of
Directors, its chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.
A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix. Unless otherwise
specified in the Articles of Association or required by law, (1) all matters
requiring shareholder action, including amendments to the Articles of
Association, must be approved by shareholders owning a majority voting interest
in the outstanding voting stock, and (2) each shareholder shall be entitled to
one vote per share.
Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or more
classes or series in the same or a substantially similar way, all the classes or
series so affected must vote together as a single voting group on the proposed
amendment.
Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be issued
as share dividends in respect
<PAGE>
of a class or series of stock if approved by a majority of the votes entitled to
be cast by the class or series to be issued unless there are no outstanding
shares of the class or series to be issued. Unless otherwise provided by the
Board of Directors, the record date for determining shareholders entitled to a
share dividend shall be the date the Board of Directors authorizes the share
dividend.
Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.
If a shareholder is entitled to fractional shares pursuant to preemptive rights,
a stock dividend, consolidation or merger, reverse stock split or otherwise, the
Association may: (a) issue fractional shares or; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder with an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share; (d) remit the cash equivalent of the
fraction to the shareholder; or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as:
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.
The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.
SIXTH. The Board of Directors shall appoint one of its members president of this
Association, and one of its members chairperson of the board and shall have the
power to appoint one or more vice presidents, a secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the Board of Directors in accordance with the Bylaws.
The Board of Directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of the
Association.
(2) Delegate the performance of its duties, but not the responsibility for its
duties, to the officers, employees, and agents of the Association.
(3) Fix the compensation and enter into employment contracts with its officers
and employees upon reasonable terms and conditions consistent with
applicable law.
<PAGE>
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty thereof.
(6) Ratify written policies authorized by the Association's management or
committees of the board.
(7) Regulate the manner in which any increase or decrease of the capital of
the Association shall be made, provided that nothing herein shall restrict
the power of shareholders to increase or decrease the capital of the
association in accordance with law, and nothing shall raise or lower from
two-thirds the percentage for shareholder approval to increase or reduce
the capital.
(8) Manage and administer the business and affairs of the Association.
(9) Adopt initial Bylaws, not inconsistent with law or the Articles of
Association, for managing the business and regulating the affairs of the
Association.
(10) Amend or repeal Bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a Board of
Directors to perform.
SEVENTH. The Board of Directors shall have the power to change the location of
the main office of this Association to any other place within the limits of the
City of Columbus, State of Ohio, without the approval of the shareholders; and
shall have the power to change the location of the main office of this
Association to any other place outside the limits of the City of Columbus, State
of Ohio, but not more than thirty miles beyond such limits, with the affirmative
vote of shareholders owning two-thirds of the stock of the Association, subject
to receipt of a certificate of approval from the Comptroller of the Currency.
The Board of Directors shall have the power to establish or change the location
of any branch or branches of the Association to any other location permitted
under applicable law without the approval of the shareholders, subject to
approval by the Office of the Comptroller of the Currency. The Board of
Directors shall have the power to establish or change the location of any
nonbranch office or facility of the Association without the approval of the
shareholders.
EIGHTH. The corporate existence of this Association shall continue
until termination according to the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholders owning,
in the aggregate, not less than 20 percent of the stock of this Association, may
call a special meeting of shareholders at any time. Unless otherwise provided by
the Bylaws or the laws of the United States, or waived by shareholders, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10, and no more than 60, days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
Association. Unless otherwise provided by the Bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.
TENTH. The Association shall provide indemnification as set forth
below:
Every person who is or was a Director, officer or employee of the Association or
of any other corporation which he served as a Director, officer or employee at
the request of the Association
<PAGE>
as part of his regularly assigned duties may be indemnified by the Association
in accordance with the provisions of this Article against all liability
(including, without limitation, judgments, fines, penalties, and settlements)
and all reasonable expenses (including, without limitation, attorneys' fees and
investigative expenses) that may be incurred or paid by him in connection with
any claim, action, suit or proceeding, whether civil, criminal or administrative
(all referred to hereafter in this Article as "Claims") or in connection with
any appeal relating thereto in which he may become involved as a party or
otherwise or with which he may be threatened by reason of his being or having
been a Director, officer or employee of the Association or such other
corporation, or by reason of any action taken or omitted by him in his capacity
as such Director, officer or employee, whether or not he continues to be such at
the time such liability or expenses are incurred; provided that nothing
contained in this Article shall be construed to permit indemnification of any
such person who is adjudged guilty of, or liable for, willful misconduct, gross
neglect of duty or criminal acts, unless, at the time such indemnification is
sought, such indemnification in such instance is permissible under applicable
law and regulations, including published rulings of the Comptroller of the
Currency or other appropriate supervisory or regulatory authority; and provided
further that there shall be no indemnification of Directors, officers, or
employees against expenses, penalties, or other payments incurred in an
administrative proceeding or action instituted by an appropriate regulatory
agency which proceeding or action results in a final order assessing civil money
penalties or requiring affirmative action by an individual or individuals in the
form of payments to the Association.
Every person who may be indemnified under the provisions of this Article and who
has been wholly successful on the merits with respect to any Claim shall be
entitled to indemnification as of right. Except as provided in the preceding
sentence, any indemnification under this Article shall be at the sole discretion
of the Board of Directors and shall be made only if the Board of Directors or
the Executive Committee acting by a quorum consisting of Directors who are not
parties to such Claim shall find or if independent legal counsel (who may be the
regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that in view of all of the circumstances then surrounding the
Claim, such indemnification is equitable and in the best interests of the
Association. Among the circumstances to be taken into consideration in arriving
at such a finding or opinion is the existence or non-existence of a contract of
insurance or indemnity under which the Association would be wholly or partially
reimbursed for such indemnification, but the existence or non-existence of such
insurance is not the sole circumstance to be considered nor shall it be wholly
determinative of whether such indemnification shall be made. In addition to such
finding or opinion, no indemnification under this Article shall be made unless
the Board of Directors or the Executive Committee acting by a quorum consisting
of Directors who are not parties to such Claim shall find or if independent
legal counsel (who may be the regular counsel of the Association) selected by
the Board of Directors or Executive Committee whether or not a disinterested
quorum exists shall render their opinion that the Directors, officer or employee
acted in good faith in what he reasonably believed to be the best interests of
the Association or such other corporation and further in the case of any
criminal action or proceeding, that the Director, officer or employee reasonably
believed his conduct to be lawful. Determination of any Claim by judgment
adverse to a Director, officer or employee by settlement with or without Court
approval or conviction upon a plea of guilty or of nolo contendere or its
equivalent shall not create a presumption that a Director, officer or employee
failed to meet the standards of conduct set forth in this Article. Expenses
incurred with respect to any Claim may be advanced by the Association prior to
the final disposition thereof upon receipt of an undertaking satisfactory to the
Association by or on behalf of the recipient to repay such amount unless it is
ultimately determined that he is entitled to indemnification under this Article.
The rights of indemnification provided in this Article shall be in addition to
any rights to which any Director, officer or employee may otherwise be entitled
by contract or as a matter of law. Every person who shall act as a Director,
officer or employee of this Association shall be
<PAGE>
conclusively presumed to be doing so in reliance upon the right of
indemnification provided for in this Article.
ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's Board of Directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.
.
<PAGE>
EXHIBIT 2
A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
TRUSTEE TO COMMENCE BUSINESS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby
certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes
324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has
possession, custody and control of all records pertaining to the
chartering of all National Banking Associations.
2. "Bank One Trust Company, National Association," Columbus,
Ohio, (Charter No. 16235) is a National Banking Association formed
under the laws of the United States and is authorized thereunder to
transact the business of banking on the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
15th day of September, 1999.
/s/ John D. Hawke, Jr.
----------------------
Comptroller of the Currency
<PAGE>
EXHIBIT 3
A COPY OF THE AUTHORIZATION OF THE TRUSTEE
TO EXERCISE CORPORATE TRUST POWERS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby
certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes
324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has
possession, custody and control of all records pertaining to the
chartering of all National Banking Associations.
2. "Bank One Trust Company, National Association," Columbus,
Ohio, (Charter No. 16235) was granted, under the hand and seal of
the Comptroller, the right to act in all fiduciary capacities
authorized under the provisions of the Act of Congress approved
September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date
of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
15th day of September, 1999.
/s/ John D. Hawke, Jr.
----------------------
Comptroller of the Currency
EXHIBIT 4
A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
<PAGE>
SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the shareholders of
the Bank for the election of Directors and for the transaction of such business
as may properly come before the meeting shall be held at its main office, or
other convenient place duly authorized by the Board of Directors, on the same
day upon which any regular or special Board meeting is held from and including
the first Monday of January to, and including, the fourth Monday of February of
each year, or on the next succeeding banking day, if the day fixed falls on a
legal holiday. If from any cause, an election of Directors is not made on the
day fixed for the regular meeting of the shareholders or, in the event of a
legal holiday, on the next succeeding banking day, the Board of Directors shall
order the election to be held on some subsequent day, as soon thereafter as
practicable, according to the provisions of law; and notice thereof shall be
given in the manner herein provided for the annual meeting. Notice of such
annual meeting shall be given by or under the direction of the Secretary, or
such other officer as may be designated by the Chief Executive Officer, by
first-class mail, postage prepaid, to all shareholders of record of the Bank at
their respective addresses as shown upon the books of the Bank mailed not less
than ten days prior to the date fixed for such meeting.
SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of the
Bank may be called at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
the Bank. Notice of any special meeting of the shareholders called by the Board
of Directors, stating the time, place and purpose of the meeting, shall be given
by or under the direction of the Secretary, or such other officer as is
designated by the Chief Executive Officer, by first-class mail, postage prepaid,
to all shareholders of record of the Bank at their respective addresses as shown
upon the books of the Bank mailed not less than ten days prior to the date fixed
for such meeting. Any special meeting of shareholders shall be conducted and its
proceedings recorded in the manner prescribed in these By-Laws for annual
meetings of shareholders.
SECTION 1.03. SECRETARY OF MEETING OF SHAREHOLDERS. The Board of Directors may
designate a person to be the secretary of the meeting of shareholders. In the
absence of a presiding officer, as designated by these By-Laws, the Board of
Directors may designate a person to act as the presiding officer. In the event
the Board of Directors fails to designate a person to preside at a meeting of
shareholders and a secretary of such meeting, the shareholders present or
represented shall elect a person to preside and a person to serve as secretary
of the meeting. The secretary of the meeting of shareholders shall cause the
returns made by the judges of election and other proceedings to be recorded in
the minute books of the Bank. The presiding officer shall notify the
Directors-elect of their election and to meet forthwith for the organization of
the new Board of Directors. The minutes of the meeting shall be signed by the
presiding officer and the secretary designated for the meeting.
SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many as
three shareholders to be judges of the election, who shall hold and conduct the
same, and who shall, after the election has been held, notify, in writing over
their signatures, the secretary of the meeting of shareholders of the result
thereof and the names of the Directors elected; provided, however, that upon
failure for any reason of any judge or judges of election, so appointed by the
Directors, to serve, the presiding officer of the meeting shall appoint other
shareholders or their proxies to fill the vacancies. The judges of election, at
the request of the chairman of the meeting, shall act as tellers of any other
vote by ballot taken at such meeting, and shall notify, in writing over their
signature, the secretary of the Board of Directors of the result thereof.
<PAGE>
SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall have
the right to vote the number of shares of record in such shareholder's name for
as many persons as there are Directors to be elected, or to cumulate such shares
as provided by Federal Law. In deciding all other questions at meetings of
shareholders, each shareholder shall be entitled to one vote on each share of
stock of record in such shareholder's name. Shareholders may vote by proxy duly
authorized in writing. All proxies used at the annual meeting shall be secured
for that meeting only, or any adjournment thereof, and shall be dated, if not
dated by the shareholder, as of the date of the receipt thereof. No officer or
employee of this Bank may act as proxy.
SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of shareholders, but shareholders present at any meeting and constituting less
than a quorum may, without further notice, adjourn the meeting from time to time
until a quorum is obtained. A majority of the votes cast shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
DIRECTORS
SECTION 2.01. QUALIFICATIONS. Each Director shall have the qualifications
prescribed by law. No person elected as a Director may exercise any of the
powers of office until such Director has taken the oath of such office.
SECTION 2.02. VACANCIES. Directors of the Bank shall hold office for one year or
until their successors are elected and qualified. Any vacancy in the Board shall
be filled by appointment of the remaining Directors, and any Director so
appointed shall hold office until the next election.
SECTION 2.03. ORGANIZATION MEETING. The Directors elected by the shareholders
shall meet for organization of the new Board of Directors at the time and place
fixed by the presiding officer of the annual meeting. If at the time fixed for
such meeting there is no quorum present, the Directors in attendance may adjourn
from time to time until a quorum is obtained. A majority of the number of
Directors elected by the shareholders shall constitute a quorum for the
transaction of business.
SECTION 2.04. REGULAR MEETINGS. The regular meetings of the Board of Directors
shall be held at such date, time and place as the Board may previously
designate, or should the Board fail to so designate, at such date, time and
place as the Chairman of the Board, Chief Executive Officer, or President may
fix. Whenever a quorum is not present, the Directors in attendance shall adjourn
the meeting to a time not later than the date fixed by the By-Laws for the next
succeeding regular meeting of the Board. Members of the Board of Directors may
participate in such meetings through use of conference telephone or similar
communications equipment, so long as all members participating in such meetings
can hear one another.
SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board of Directors shall
be held at the call of the Chairman of the Board, Chief Executive Officer, or
President, or at the request of two or more Directors. Any special meeting may
be held at such place and at such
<PAGE>
time as may be fixed in the call. Written or oral notice shall be given to each
Director not later than the day next preceding the day on which the special
meeting is to be held, which notice may be waived in writing. The presence of a
Director at any meeting of the Board of Directors shall be deemed a waiver of
notice thereof by such Director. Whenever a quorum is not present, the Directors
in attendance shall adjourn the special meeting from day to day until a quorum
is obtained. Members of the Board of Directors may participate in such meetings
through use of conference telephone or similar communications equipment, so long
as all members participating in such meetings can hear one another.
SECTION 2.06. QUORUM. A majority of the Directors shall constitute a quorum at
any meeting, except when otherwise provided by law; but a lesser number may
adjourn any meeting, from time-to-time, and the meeting may be held, as
adjourned, without further notice. When, however, less than a quorum as herein
defined, but at least one-third and not less than two of the authorized number
of Directors are present at a meeting of the Directors, business of the Bank may
be transacted and matters before the Board approved or disapproved by the
unanimous vote of the Directors present.
SECTION 2.07. COMPENSATION. Each member of the Board of Directors shall receive
such fees for attendance at Board and Board committee meetings and such fees for
service as a Director, irrespective of meeting attendance, as from time to time
are fixed by resolution of the Board; provided, however, that payment hereunder
shall not be made to a Director for meetings attended and/or Board service which
are not for the Bank's sole benefit and which are concurrent and duplicative
with meetings attended or Board service for an affiliate of the Bank for which
the Director receives payment; and provided further that fees hereunder shall
not be paid in the case of any Director in the regular employment of the Bank or
of one of its affiliates. Each member of the Board of Directors, whether or not
such Director is in the regular employment of the Bank or of one of its
affiliates, shall be reimbursed for travel expenses incident to attendance at
Board and Board committee meetings.
SECTION 2.08. EXECUTIVE COMMITTEE. There may be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all the powers of the Board that may
lawfully be delegated. The Executive Committee shall consist of at least three
Board members, one of whom shall be the Chairman of the Board, Chief Executive
Officer or the President. The other members of the Executive Committee shall be
appointed by the Chairman of the Board, the Chief Executive Officer, or the
President, with the approval of the Board, and who shall continue as members of
the Executive Committee until their successors are appointed, provided, however,
that any member of the Executive Committee may be removed by the Board upon a
majority vote thereof at any regular or special meeting of the Board. The
Chairman, Chief Executive Officer, or President shall fill any vacancy in the
Executive Committee by the appointment of another Director, subject to the
approval of the Board of Directors. The Executive Committee shall meet at the
call of the Chairman, Chief Executive Officer, or President or any two members
thereof at such time or times and place as may be designated. In the event of
the absence of any member or members of the Executive Committee, the presiding
member may appoint a member or members of the Board to fill the place or places
of such absent member or members to serve during such absence. Two members of
the Executive Committee shall constitute a quorum. When neither the Chairman of
the Board, the Chief Executive Officer, nor President are present, the Executive
Committee shall appoint a presiding officer. The Executive Committee shall
report its proceedings and the action taken by it to the Board of Directors.
<PAGE>
SECTION 2.09. OTHER COMMITTEES. The Board of Directors may appoint such special
committees from time to time as are in its judgment necessary in the interest of
the Bank.
ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES
SECTION 3.01. OFFICERS AND MANAGEMENT STAFF.
(a) The executive officers of the Bank shall include a Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer, Secretary, Security
Officer, and may include one or more Senior Managing Directors or Managing
Directors. The Chairman of the Board, Chief Executive Officer, President, any
Senior Managing Director, any Managing Director, Chief Financial Officer,
Secretary, and Security Officer shall be elected by the Board. The Chairman of
the Board, Chief Executive Officer, and the President shall be elected by the
Board from their own number. Such officers as the Board shall elect from their
own number shall hold office from the date of their election as officers until
the organization meeting of the Board of Directors following the next annual
meeting of shareholders, provided, however, that such officers may be relieved
of their duties at any time by action of the Board of Directors, in which event
all the powers incident to their office shall immediately terminate. The
Chairman of the Board, Chief Executive Officer, or the President shall preside
at all meetings of shareholders and meetings of the Board of Directors.
(b) The management staff of the Bank shall include officers elected by the
Board, officers appointed by the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and such other persons in the employment of the Bank
who, pursuant to authorization by a duly authorized officer of the Bank, perform
management functions and have management responsibilities. Any two or more
offices may be held by the same person except that no person shall hold the
office of Chairman of the Board, Chief Executive Officer and/or President and at
the same time also hold the office of Secretary.
(c) Except as provided in the case of the elected officers who are members of
the Board, all officers and employees, whether elected or appointed, shall hold
office at the pleasure of the Board. Except as otherwise limited by law or these
By-Laws, the Board assigns to the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and/or each of their respective designees the authority
to control all personnel, including elected and appointed officers and employees
of the Bank, to employ or direct the employment of such officers and employees
as he or she may deem necessary, including the fixing of salaries and the
dismissal of such officers and employees at pleasure, and to define and
prescribe the duties and responsibilities of all officers and employees of the
Bank, subject to such further limitations and directions as he or she may from
time to time deem appropriate.
(d) The Chairman of the Board, the Chief Executive Officer, the President, any
Senior Managing Director, any Managing Director, the Chief Financial Officer,
and any other officer of the Bank, to the extent that such officer is authorized
in writing by the Chairman of the Board, the Chief Executive Officer, the
President, any Senior Managing Director, any Managing Director, or the Chief
Financial Officer may appoint persons other than officers who are in employment
of the Bank to serve in management positions and in connection therewith, the
<PAGE>
appointing officer may assign such title, salary, responsibilities and functions
as are deemed appropriate, provided, however, that nothing contained herein
shall be construed as placing any limitation on the authority of the Chairman of
the Board, the Chief Executive Officer, the President, any Senior Managing
Director, any Managing Director, or the Chief Financial Officer as provided in
this and other sections of these By-Laws.
(e) The Senior Managing Directors and the Managing Directors of the Bank shall
have general and active authority over the management of the business of the
Bank, shall see that all orders and resolutions of the Board of Directors are
carried into effect, and shall do or cause to be done all things necessary or
proper to carry on the business of the Bank in accordance with provisions of
applicable law and regulations. Each Senior Managing Director and Managing
Director shall perform all duties incident to his or her office and such other
and further duties, as may from time to time be required by the Chief Executive
Officer, the President, the Board of Directors, or the shareholders. The
specification of authority in these By-Laws wherever and to whomever granted
shall not be construed to limit in any manner the general powers of delegation
granted to a Senior Managing Director or a Managing Director in conducting the
business of the Bank. In the absence of a Senior Managing Director or a Managing
Director, such officer as is designated by the Senior Managing Director or the
Managing Director shall be vested with all the powers and perform all the duties
of the Senior Managing Director or the Managing Director as defined by these
By-Laws.
(f) Each Managing Director who is assigned oversight of one or more trust
service offices shall appoint a management committee known as the Investment
Management and Trust Committee consisting of the Managing Director of the trust
service offices and at least three other members who shall be capable and
experienced officers of the Bank appointed from time to time by the Managing
Director and who shall continue as members of the Investment Management and
Trust Committee until their successors are appointed, provided, however, that
any member of the Investment Management and Trust Committee may be removed by
the Managing Director as provided in this and other sections of these By-Laws.
The Managing Director shall fill any vacancy in the Investment Management and
Trust Committee by the appointment of another capable and experienced officer of
the Bank. Each Investment Management and Trust Committee shall meet at such
date, time and place as the Managing Director shall fix. In the event of the
absence of any member or members of the Investment Management and Trust
Committee, the Managing Director may, in his or her discretion, appoint another
officer of the Bank to fill the place or places of such absent member or members
to serve during such absence. A majority of each Investment Management and Trust
Committee shall constitute a quorum. Each Investment Management and Trust
Committee shall carry out the policies of the Bank, as adopted by the Board of
Directors, which shall be formulated and executed in accordance with State and
Federal Law, Regulations of the Comptroller of the Currency, and sound fiduciary
principles. In carrying out the policies of the Bank, each Investment Management
and Trust Committee is hereby authorized to establish management teams whose
duties and responsibilities shall be specifically set forth in the policies of
the Bank. Each such management team shall report such proceedings and the
actions taken thereby to the Investment Management and Trust Committee. Each
Managing Director shall then report such proceedings and the actions taken
thereby to the Board of Directors.
SECTION 3.02. POWERS AND DUTIES OF MANAGEMENT STAFF. Pursuant to the fiduciary
powers granted to this Bank under the provisions of Federal Law and Regulations
of the Comptroller of the Currency, the Chairman of the Board, the Chief
Executive Officer, the President, the Senior Managing Directors, the Managing
Directors, the Chief Financial Officer,
<PAGE>
and those officers so designated and authorized by the Chairman of the Board,
the Chief Executive Officer, the President, the Senior Managing Directors, the
Managing Directors, or the Chief Financial Officer are authorized for and on
behalf of the Bank, and to the extent permitted by law, to make loans and
discounts; to purchase or acquire drafts, notes, stocks, bonds, and other
securities for investment of funds held by the Bank; to execute and purchase
acceptances; to appoint, empower and direct all necessary agents and attorneys;
to sign and give any notice required to be given; to demand payment and/or to
declare due for any default any debt or obligation due or payable to the Bank
upon demand or authorized to be declared due; to foreclose any mortgages; to
exercise any option, privilege or election to forfeit, terminate, extend or
renew any lease; to authorize and direct any proceedings for the collection of
any money or for the enforcement of any right or obligation; to adjust, settle
and compromise all claims of every kind and description in favor of or against
the Bank, and to give receipts, releases and discharges therefor; to borrow
money and in connection therewith to make, execute and deliver notes, bonds or
other evidences of indebtedness; to pledge or hypothecate any securities or any
stocks, bonds, notes or any property real or personal held or owned by the Bank,
or to rediscount any notes or other obligations held or owned by the Bank,
whenever in his or her judgment it is reasonably necessary for the operation of
the Bank; and in furtherance of and in addition to the powers hereinabove set
forth to do all such acts and to take all such proceedings as in his or her
judgment are necessary and incidental to the operation of the Bank.
SECTION 3.03. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control of
the records of the Bank and, subject to the direction of the Chief Executive
Officer, shall undertake other duties and functions usually performed by a
corporate secretary. Other officers may be designated by the Secretary as
Assistant Secretary to perform the duties of the Secretary.
SECTION 3.04. EXECUTION OF DOCUMENTS. Any member of the Bank's management staff
or any employee of the Bank designated as an officer on the Bank's payroll
system is hereby authorized for and on behalf of the Bank to sell, assign,
lease, mortgage, transfer, deliver and convey any real or personal property,
including shares of stock, bonds, notes, certificates of indebtedness (including
the assignment and redemption of registered United States obligations) and all
other forms of intangible property now or hereafter owned by or standing in the
name of the Bank, or its nominee, or held by the Bank as collateral security, or
standing in the name of the Bank, or its nominee, in any fiduciary capacity or
in the name of any principal for whom this Bank may now or hereafter be acting
under a power of attorney or as agent, and to execute and deliver such partial
releases from any discharges or assignments of mortgages and assignments or
surrender of insurance policies, deeds, contracts, assignments or other papers
or documents as may be appropriate in the circumstances now or hereafter held by
the Bank in its own name, in a fiduciary capacity, or owned by any principal for
whom this Bank may now or hereafter be acting under a power of attorney or as
agent; provided, however, that, when necessary, the signature of any such person
shall be attested or witnessed in each case by another officer of the Bank. Any
member of the Bank's management staff or any employee of the Bank designated as
an officer on the Bank's payroll system is hereby authorized for and on behalf
of the Bank to execute any indemnity and fidelity bonds, trust agreements,
proxies or other papers or documents of like or different character necessary,
desirable or incidental to the appointment of the Bank in any fiduciary
capacity, the conduct of its business in any fiduciary capacity, or the conduct
of its other banking business; to sign and issue checks, drafts, orders for the
payment of money and certificates of deposit; to sign and endorse bills of
exchange, to sign and countersign foreign and domestic letters of credit, to
<PAGE>
receive and receipt for payments of principal, interest, dividends, rents, fees
and payments of every kind and description paid to the Bank, to sign receipts
for money or other property acquired by or entrusted to the Bank, to guarantee
the genuineness of signatures on assignments of stocks, bonds or other
securities, to sign certifications of checks, to endorse and deliver checks,
drafts, warrants, bills, notes, certificates of deposit and acceptances in all
business transactions of the Bank; also to foreclose any mortgage, to execute
and deliver receipts for any money or property; also to sign stock certificates
for and on behalf of this Bank as transfer agent or registrar, and to
authenticate bonds, debentures, land or lease trust certificates or other forms
of security issued pursuant to any indenture under which this Bank now or
hereafter is acting as trustee or in any other fiduciary capacity; to execute
and deliver various forms of documents or agreements necessary to effectuate
certain investment strategies for various fiduciary or custody customers of the
Bank, including, without limitation, exchange funds, options, both listed and
over-the-counter, commodities trading, futures trading, hedge funds, limited
partnerships, venture capital funds, swap or collar transactions and other
similar investment vehicles for which the Bank now or in the future may deem
appropriate for investment of fiduciary customers or in which non-fiduciary
customers may direct investment by the Bank.
Without limitation on the foregoing, the Chief Executive Officer, Chairman of
the Board, or President of the Bank shall have the authority from time to time
to appoint officers of the Bank as Vice President for the sole purpose of
executing releases or other documents incidental to the conduct of the Bank's
business in any fiduciary capacity where required by state law or the governing
document. In addition, other persons in the employment of the Bank or its
affiliates may be authorized by the Chief Executive Officer, Chairman of the
Board, President, Senior Managing Directors, Managing Directors, or Chief
Financial Officer to perform acts and to execute the documents described in the
paragraph above, subject, however, to such limitations and conditions as are
contained in the authorization given to such person.
SECTION 3.05. PERFORMANCE BOND. All officers and employees of the Bank shall be
bonded for the honest and faithful performance of their duties for such amount
as may be prescribed by the Board of Directors.
ARTICLE IV
STOCKS AND STOCK CERTIFICATES
SECTION 4.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of the
Board, the Chief Executive Officer, or the President (which signature may be
engraved, printed or impressed), and shall be signed manually by the Secretary,
or any other officer appointed by the Chief Executive Officer for that purpose.
In case any such officer who has signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Bank with the same effect as if
such officer had not ceased to be such at the time of its issue. Each such
certificate shall bear the corporate seal of the Bank, shall recite on its face
that stock represented thereby is transferable only upon the books of the Bank
when properly endorsed and shall recite such other information as is required by
law and deemed appropriate by the Board. The corporate seal may be facsimile
engraved or printed.
SECTION 4.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall be
transferable only upon the stock transfer books of the Bank and, except as
hereinafter
<PAGE>
provided, no transfer shall be made or new certificates issued except upon the
surrender for cancellation of the certificate or certificates previously issued
therefor. In the case of the loss, theft, or destruction of any certificate, a
new certificate may be issued in place of such certificate upon the furnishing
of an affidavit setting forth the circumstances of such loss, theft, or
destruction and indemnity satisfactory to the Chairman of the Board, the Chief
Executive Officer, or the President. The Board of Directors or the Chairman of
the Board, Chief Executive Officer, or the President may authorize the issuance
of a new certificate therefor without the furnishing of indemnity. Stock
transfer books, in which all transfers of stock shall be recorded, shall be
provided. The stock transfer books may be closed for a reasonable period and
under such conditions as the Board of Directors may at any time determine, for
any meeting of shareholders, the payment of dividends or any other lawful
purpose. In lieu of closing the transfer books, the Board of Directors may, in
its discretion, fix a record date and hour constituting a reasonable period
prior to the day designated for the holding of any meeting of the shareholders
or the day appointed for the payment of any dividend, or for any other purpose
at the time as of which shareholders entitled to notice of and to vote at any
such meeting or to receive such dividend or to be treated as shareholders for
such other purpose shall be determined, and only shareholders of record at such
time shall be entitled to notice of or to vote at such meeting or to receive
such dividends or to be treated as shareholders for such other purpose.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.01. SEAL. The seal of the Bank shall be circular in form with "SEAL"
in the center, and the name "BANK ONE TRUST COMPANY, NA" located clockwise
around the upper half of the seal.
SECTION 5.02. MINUTE BOOK. The organization papers of this Bank, the Articles of
Association, the returns of judges of elections, the By-Laws and any amendments
thereto, the proceedings of all regular and special meetings of the shareholders
and of the Board of Directors, and reports of the committees of the Board of
Directors shall be recorded in the minute books of the Bank. The minutes of each
such meeting shall be signed by the presiding officer and attested by the
secretary of the meeting.
SECTION 5.03. CORPORATE POWERS. The corporate existence of the Bank shall
continue until terminated in accordance with the laws of the United States. The
purpose of the Bank shall be to carry on the general business of a commercial
bank trust department and to engage in such activities as are necessary,
incident, or related to such business. The Articles of Association of the Bank
shall not be amended, or any other provision added elsewhere in the Articles
expanding the powers of the Bank, without the prior approval of the Comptroller
of the Currency.
SECTION 5.04. AMENDMENT OF BY-LAWS. The By-Laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a vote
of a majority of the Directors.
<PAGE>
As amended April 24, 1991 Section 3.01 (Officers and Management Staff)
Section 3.02 (Chief Executive Officer)
Section 3.03 (Powers and Duties of
Officers and Management Staff)
Section 3.05 (Execution of Documents)
As amended January 27, 1995 Section 2.04 (Regular Meetings)
Section 2.05 (Special Meetings)
Section 3.01(f) (Officers and Management Staff)
Section 3.03(e) (Powers and Duties of Officers
and Management Staff)
Section 5.01 (Seal)
Amended and restated in its entirety effective May 1, 1996
As amended August 1, 1996 Section 2.09 (Trust Examining Committee)
Section 2.10 (Other Committees)
As amended October 16, 1997 Section 3.01 (Officers and Management Staff)
Section 3.02 (Powers and Duties of Officers and
Management Staff)
Section 3.04 (Execution of Documents)
As amended January 1, 1998 Section 1.01 (Annual Meeting)
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 29, 2000
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Questar Market
Resources, Inc. and Bank One Trust Company, National Association, as Trustee,
the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
Bank One Trust Company, National Association
By: /s/ Sandra L. Caruba
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: Bank One Trust Company, NA Call Date: 12/31/99 State #: 391581 FFIEC 032
Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-1
City, State Zip: Columbus, OH 43271 Transit #: 04400003
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C300
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCON
a. Noninterest-bearing balances and currency and coin(1) ................... 0081 123,692 1.a
b. Interest-bearing balances(2)............................................. 0071 17,687 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)................ 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 5,860 2.b
3. Federal funds sold and securities purchased under agreements to
resell ..................................................................... 1350 364,813 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCON
RC-C)....................................................................... 2122 58,020 4.a
b. LESS: Allowance for loan and lease losses................................ 3123 10 4.b
c. LESS: Allocated transfer risk reserve.................................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCON
reserve (item 4.a minus 4.b and 4.c)..................................... 2125 58,010 4.d
5. Trading assets (from Schedule RD-D)......................................... 3545 0 5.
6. Premises and fixed assets (including capitalized leases).................... 2145 22,547 6.
7. Other real estate owned (from Schedule RC-M)................................ 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).............................................. 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155 0 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 27,151 10.
11. Other assets (from Schedule RC-F)........................................... 2160 141,759 11.
12. Total assets (sum of items 1 through 11).................................... 2170 761,519 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: Bank One Trust Company, NA Call Date: 12/31/99 State #: 391581 FFIEC 032
Address: 100 East Broad Street Vendor ID: D Cert #" 21377 Page RC-2
City, State Zip: Columbus, OH 43271 Transit #: 04400003
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-E, part 1)...................................... 2200 589,846 13.a
(1) Noninterest-bearing(1).............................................. 6631 517,140 13.a1
(2) Interest-bearing.................................................... 6636 72,706 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......................................
(1) Noninterest bearing..................................................
(2) Interest-bearing.....................................................
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 0 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 0 15.a
b. Trading Liabilities(from Sechedule RC-D)............................... RCFD 3548 0 15.b
16. Other borrowed money: RCON
a. With original maturity of one year or less 2332 0 16.a
b. With original maturity of more than one year............................. A547 0 16.b
c. With original maturity of more than three years.......................... A548 0 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 0 18.
19. Subordinated notes and debentures........................................... 3200 0 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 63,244 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 653,090 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 800 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 45,157 25.
26. a. Undivided profits and capital reserves................................... 3632 62,458 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 8434 14 26.b
c. Accumulated net gains (losses) on cash flow hedges....................... 4336 0 26.c
27. Cumulative foreign currency translation adjustments.........................
28. Total equity capital (sum of items 23 through 27)........................... 3210 108,429 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)....................................... 3300 761,519 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
auditors as of any date during 1996 . . . . . . . . . . . . ...RCFD 6724 . ..
------------
N/A
M1
------------
1 = Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a certified
public accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which
submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
4.= Directors' examination of the bank performed by other
external auditors (may be required by state chartering
authority)
5 = Review of the bank's financial statements by external
auditors
6 = Compilation of the bank's financial statements by external
auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time
and savings deposits.
