<PAGE> 1
AS FILED ON SEPTEMBER 18, 1997
REGISTRATION NO. 333-34841
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SECURITIES AND EXCHANGE COMMISSION
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
SEAGULL ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
---------------------
<TABLE>
<S> <C>
TEXAS 74-1764876
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
</TABLE>
1001 FANNIN, SUITE 1700
HOUSTON, TEXAS 77002-6714
(713) 951-4700
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
WILLIAM L. TRANSIER, SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
1001 FANNIN, SUITE 1700
HOUSTON, TEXAS 77002-6714
(713) 951-4700
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
---------------------
Copies To:
<TABLE>
<S> <C>
VINSON & ELKINS L.L.P. SIMPSON THACHER & BARTLETT
2300 FIRST CITY TOWER 425 LEXINGTON AVENUE
HOUSTON, TEXAS 77002-6760 NEW YORK, NEW YORK 10017-3909
ATTN: J. MARK METTS, ESQ. ATTN: GEORGE R. KROUSE, JR., ESQ.
(713) 758-3820 (212) 455-2000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
- ---------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier 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 AGGREGATE
TITLE OF EACH CLASS OF OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED(1)(2) PRICE(3)(4)(5)(6) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities(7)..........................................
Preferred Stock.............................................
Depositary Shares(8)........................................
Common Stock(9).............................................
Securities Warrants......................................... $100 $1(3)
Total.......................................................
===============================================================================================================
</TABLE>
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.
PURSUANT TO THE PROVISIONS OF RULE 429 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE PROSPECTUS CONTAINED IN THIS REGISTRATION STATEMENT ALSO RELATES TO
$100,000,000 OF DEBT SECURITIES COVERED BY REGISTRANT'S REGISTRATION STATEMENT
ON FORM S-3 (REGISTRATION NO. 33-65118) AND $300,000,000 OF SECURITIES COVERED
BY THE REGISTRANT'S REGISTRATION STATEMENT ON FORM S-3 (REGISTRATION NO. 33-
64051). SUCH REGISTRATION STATEMENTS ARE ACCORDINGLY AMENDED TO REFLECT THE
INFORMATION CONTAINED HEREIN.
(Footnotes on following page)
================================================================================
<PAGE> 2
(Footnotes from previous page)
(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II(D) to Form S-3 under the Securities Act of 1933, as
amended.
(2) This registration statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion or exercise
of, as the case may be, the Debt Securities, Preferred Stock, Depositary
Shares or Securities Warrants registered hereunder. Any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(3) Previously paid. Pursuant to Rule 429 of the Rules and Regulations of the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, the Prospectus herein also relates to $100,000,000 of debt
securities of the Registrant registered under Registration Statement No.
33-65118 (for which the registrant paid a filing fee of $109,375 on June
28, 1993) and $300,000,000 of securities of the Registrant registered under
Registration Statement No. 33-64051 (for which the registrant paid a filing
fee of $103,449 on November 7, 1995).
(4) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Rules and Regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
(5) No separate consideration will be received for any securities registered
hereunder that are issued in exchange for, or upon conversion of, as the
case may be, the Debt Securities, Preferred Stock or Depositary Shares
registered hereunder.
(6) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with, and at the time of, the
issuance by the registrant of the securities registered hereunder.
(7) The aggregate principal amount of the Debt Securities may be increased if
any Debt Securities are issued at an original issue discount by an amount
such that the gross proceeds to be received by the registrant shall be
equal to the above amount to be registered. Any offering of Debt Securities
denominated other than in U.S. dollars will be treated as the equivalent of
U.S. dollars based on the exchange rate applicable to the purchase of such
Debt Securities at the time of initial offering.
(8) Such indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the event
that the Registrant elects to offer to the public fractional interests in
shares of the Preferred Stock registered hereunder, Depositary Receipts
will be distributed to those persons purchasing such fractional interests
and such shares will be issued to the Depositary under the Deposit
Agreement.
(9) Including associated preferred stock purchase rights. Prior to the
occurrence of certain events, the preferred stock purchase rights will not
be evidenced or traded separately from the Common Stock.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS
[SEAGULL LOGO] SEAGULL ENERGY CORPORATION
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
SECURITIES WARRANTS
---------------------
Seagull Energy Corporation ("Seagull" or the "Company") may offer and sell,
from time to time, (i) unsecured debt securities, in one or more series,
consisting of notes, debentures or other evidences of indebtedness (the "Debt
Securities"), (ii) shares of preferred stock, par value $1.00 per share, in one
or more series (the "Preferred Stock"), which may be issued in the form of
depositary shares evidenced by depositary receipts (the "Depositary Shares"),
(iii) shares of common stock, par value $.10 per share (the "Common Stock"),
accompanied by rights to purchase Junior Participating Preferred Stock (the
"Rights"), and (iv) Securities Warrants ("Securities Warrants") to purchase Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. The Company may
offer and sell up to $300,000,100 aggregate public offering price of Debt
Securities, Preferred Stock, Depositary Shares, Common Stock and Securities
Warrants (collectively, the "Securities"), and up to an additional $100,000,000
aggregate public offering price of Debt Securities.
The specific terms of the particular Securities to be issued will be set
forth in a supplement to this Prospectus (a "Prospectus Supplement"), which will
be delivered together with this Prospectus, including, where applicable, (i) in
the case of Debt Securities, the specific designation, aggregate principal
amount, ranking as senior or senior subordinated Debt Securities, maturity, rate
or rates (or method of determining the same) and time or times for the payment
of interest, if any, any exchangeability or conversion terms or any terms for
optional or mandatory redemption or repurchase, or payment of additional amounts
or any sinking fund provisions and any other specific terms of such Debt
Securities, will be set forth in the Prospectus Supplement, (ii) in the case of
Preferred Stock, the specific designation, number of shares and liquidation
value thereof and the dividend, liquidation, redemption, voting and other
rights, including conversion or exchange rights, if any, and any other special
terms, as well as whether interests in the Preferred Stock will be represented
by Depositary Shares, (iii) in the case of Common Stock, the number of shares,
and (iv) in the case of Securities Warrants, the number and terms thereof, the
designation and number or amount of Securities issuable upon their exercise, the
exercise price, the terms of the offering and sale thereof and, where
applicable, the duration and detachability thereof. The Prospectus Supplement
will also contain information regarding the initial public offering price, the
net proceeds to the Company and, where applicable, the United States Federal
income tax considerations relating to the Securities covered by the Prospectus
Supplement.
The Securities may be sold directly by the Company to investors, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution." If any agents of the Company or any underwriters are
involved in the sale of any Securities in respect of which the Prospectus is
being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the Prospectus Supplement.
The Common Stock is listed on the New York Stock Exchange, Inc. under the
symbol "SGO." The Prospectus Supplement will contain information about any
listing on a securities exchange of the Securities covered by the Prospectus
Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
September , 1997
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission, 450 Fifth Street,
N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549; and at regional
offices of the Commission at the Citicorp Center, 500 West Madison, Suite 1400,
Chicago, Illinois 60661 and at 7 World Trade Center, New York, New York 10048.
Copies of such material may be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such material may also be inspected and copied at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
Certain of such material is also available on the Commission's World Wide Web
site, http://www.sec.gov.
As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information contained in the Registration Statement on
Form S-3 (the "Registration Statement") of which this Prospectus is a part. For
such information, reference is made to the Registration Statement and the
exhibits thereto. Statements made in this Prospectus as to the contents of any
contract, agreement or other document are not necessarily complete; with respect
to each such contract, agreement or other document filed as an exhibit to the
Registration Statement or incorporated by reference herein, reference is made to
such contract, agreement or other document for a more complete description of
the matter involved, and each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following documents previously filed with the Commission pursuant to the
Exchange Act: (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996; (ii) the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997 and June 30, 1997; (iii) the Company's Current
Report on Form 8-K dated September 11, 1997 and (iv) the description of the
Common Stock contained in the Registration Statement on Form 8-A declared
effective by the Commission on January 30, 1981, together with the amendments on
Form 8 filed with the Commission on January 29, 1981, January 30, 1981 and
October 28, 1991.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities pursuant hereto shall be
deemed to be incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained in this Prospectus or in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained in this Prospectus or in any subsequently
filed document that also is or deemed to be incorporated by reference in this
Prospectus modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents that are incorporated by reference in this
Prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Investor Relations, Seagull Energy Corporation, 1001 Fannin, Suite
1700, Houston, Texas 77002, telephone (713) 951-4700.
2
<PAGE> 5
THE COMPANY
Seagull is an independent, international oil and natural gas company
engaged primarily in exploring for and producing crude oil and natural gas. Its
operations are conducted through two business segments, the most prominent of
which, Oil and Gas Operations, involves primarily exploration and production
("E&P").
E&P operations consist of oil and gas exploration and production in the
United States, Egypt, Cote d'Ivoire, Indonesia and the Russian Republic of
Tatarstan. In addition, the Company has an interest in an exploration venture in
the Irish Sea.
Within its Oil and Gas Operations segment, the Company also includes its
oil and gas marketing activities and its engineering, design, construction
management and full-service operations of pipelines and related facilities for
other parties.
The Company's other operating segment, Alaska Transmission and
Distribution, involves the operation as one unit, referred to as ENSTAR Alaska,
of natural gas transmission and distribution systems which serve the greater
Anchorage, Alaska area.
The Company was incorporated in Texas in 1973 as a wholly owned subsidiary
of Houston Oil & Minerals Corporation ("HO&M"). In March 1981, the Company
became an independent entity as a result of the spinoff of its shares to the
stockholders of HO&M. The Company's principal executive offices are located at
1001 Fannin, Suite 1700, Houston, Texas 77002, and the Company's telephone
number is (713) 951-4700. The "Company" or "Seagull" refers to Seagull Energy
Corporation and its consolidated subsidiaries, unless otherwise indicated or the
context otherwise suggests.
FORWARD-LOOKING STATEMENTS
Certain information included in the documents incorporated by reference
this Prospectus and in any Prospectus Supplement may include 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.
Although the Company believes that such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will in
fact occur. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include political
developments in foreign countries, federal and state regulatory developments,
the timing and extent of changes in commodity prices, the timing and extent of
success in discovering, developing and producing or acquiring oil and gas
reserves and conditions of the capital and equity markets during the periods
covered by the forward-looking statements.
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of the Securities offered by this Prospectus and the Prospectus
Supplement (the "Offered Securities") will be added to the Company's general
funds and used for general corporate purposes. Until so utilized, it is expected
that such net proceeds will be invested in interest-bearing time deposits or
short-term marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated:
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------
1997 1996 1995 1994 1993 1992
- --------------------- ---- ---- ---- ---- ----
<C> <C> <C> <C> <C> <C>
2.79 2.10 1.00 0.97 2.15 1.52
===== ==== ==== ==== ==== ====
</TABLE>
3
<PAGE> 6
On October 3, 1996, the Company acquired Global Natural Resources, Inc.
("Global") in a stock-for-stock merger accounted for as a pooling of interests.
Accordingly, the financial statements of the Company for the period prior to
October 3, 1996 have been restated to combine the results of Seagull and Global.
For purposes of computing the ratio of earnings to fixed charges: (i)
earnings consist of income from continuing operations before provision for
income taxes and cumulative effect of changes in accounting principles plus
fixed charges as described below, excluding capitalized interest for the period
and (ii) fixed charges consist of interest expensed and capitalized and
amortization of debt discount and expense relating to indebtedness. For the year
ended December 31, 1994, the amount of earnings was not adequate to cover fixed
charges by $1,059,000.
There were no shares of Preferred Stock outstanding during any of the
periods indicated above and therefore the combined ratio of earnings to fixed
charges and preferred stock dividend requirements would have been the same as
set forth above for all periods indicated.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be unsecured senior or senior subordinated debt of
the Company and will be issued, in the case of Debt Securities that will be
senior debt ("Senior Debt Securities"), under a Senior Indenture (the "Senior
Debt Indenture") between the Company and The Bank of New York, as trustee, and,
in the case of Debt Securities that will be senior subordinated debt ("Senior
Subordinated Debt Securities"), under a Senior Subordinated Indenture (the
"Senior Subordinated Debt Indenture") between the Company and The Bank of New
York, as trustee. The Senior Debt Indenture and the Senior Subordinated Debt
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures." The Bank of New York (and any successor
thereto as trustee under either Indenture) is hereinafter referred to as the
"Trustee." The Indentures are filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following summaries of certain provisions
of the Indentures and the Debt Securities do not purport to be complete and such
summaries are subject to the detailed provisions of the applicable Indenture to
which reference is hereby made for a full description of such provisions,
including the definition of certain terms used herein. Section references in
parentheses below are to sections in both Indentures unless otherwise indicated.
Wherever particular sections or defined terms of the applicable Indenture are
referred to, such sections or defined terms are incorporated herein by reference
as part of the statement made, and the statement is qualified in its entirety by
such reference. The Indentures are substantially identical, except for
provisions relating to subordination.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SENIOR SUBORDINATED DEBT SECURITIES
General. The Debt Securities will be unsecured senior or senior
subordinated obligations of the Company and may be issued from time to time in
one or more series. Neither of the Indentures limits the amount of Debt
Securities that may be issued thereunder nor does either limit the aggregate
unsecured indebtedness of the Company or any subsidiary thereof or limit the
payment of dividends or the acquisition of stock of the Company. The Company
currently conducts a substantial portion of its operations through subsidiaries.
Consequently, the rights of the Company to receive assets of any subsidiary (and
thus the ability of holders of Debt Securities to benefit indirectly from such
assets) are subject to the prior claims of creditors of that subsidiary. Except
to the extent set forth in any Prospectus Supplement, the Indentures do not, and
the Debt Securities will not, contain any covenants or other provisions that are
intended to afford holders of the Debt Securities special protection in the
event of either a change of control of the Company or a highly leveraged
transaction by the Company.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Debt Securities offered by such Prospectus
Supplement ("Offered Debt Securities") (to the extent such terms and information
are applicable to such Offered Debt Securities): (i) the title of the Offered
Debt Securities; (ii) classification as Senior Debt Securities or Senior
Subordinated Debt Securities, aggregate principal amount, purchase price and
denomination; (iii) the date or dates on which the Offered Debt Securities will
mature; (iv) the method by which amounts payable in respect of principal,
premium, if any, or
4
<PAGE> 7
interest, if any, on or upon the redemption of such Offered Debt Securities may
be calculated; (v) the interest rate or rates (or the method by which such will
be determined), and the date or dates from which such interest, if any, will
accrue; (vi) the date or dates on which such interest, if any, will be payable;
(vii) the place or places where and the manner in which the principal of,
premium, if any, and interest, if any, on the Offered Debt Securities will be
payable and the place or places where the Offered Debt Securities may be
presented for transfer; (viii) the right, if any, or obligation, if any, of the
Company to redeem, repay or purchase the Offered Debt Securities 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 (or the method by which
such price or prices will be determined, or both) at which, the form or method
of payment therefor if other than in cash and the terms and conditions upon
which the Offered Debt Securities will be redeemed, repaid or purchased pursuant
to any such obligation; (ix) any provision relating to the issuance of the
Offered Debt Securities at an original issue discount; (x) if the amounts of
payments of principal of, premium, if any, and interest on the Offered Debt
Securities are to be determined with reference to an index, the manner in which
such amounts shall be determined; (xi) any applicable United States federal
income tax consequences; (xii) the aggregate amount of outstanding indebtedness
as of the most recent practicable date that would be senior to the Senior
Subordinated Debt Securities; and (xiii) any other specific terms of the Offered
Debt Securities, including any deleted, modified or additional events of
default, remedies or covenants provided with respect to such Offered Debt
Securities, and any terms that may be required by or advisable under applicable
laws or regulations.
Unless otherwise specified in any Prospectus Supplement, the Debt
Securities will be issuable in registered form and in denominations of $1,000
and any integral multiple thereof (Section 2.7). No service charge will be made
for any transfer or exchange of any Debt Securities but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith (Section 2.8).
Debt Securities may bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par that are treated as having been issued at a
discount for United States federal income tax purposes will be described in the
applicable Prospectus Supplement.
In determining whether the holders of the requisite aggregate principal
amount of outstanding Debt Securities of any series have given any request,
demand, authorization, direction, notice, consent or waiver under the
Indentures, the principal amount of any series of Debt Securities originally
issued at a discount from their stated principal amount that will be deemed to
be outstanding for such purposes will be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof.
Global Securities. The Debt Securities of a series may be issued in whole
or in part in the form of one or more global securities ("Global Securities")
that will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a Global Security (i) may not be
transferred except as a whole and (ii) may only be transferred (A) by the
Depositary for such Global Security to its nominee, (B) by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or (C) by
such Depositary or any such nominee to a successor Depositary or nominee of such
successor Depositary (Section 2.8).
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual
5
<PAGE> 8
Debt Securities represented by such Global Security to the accounts of persons
that have accounts with such Depositary. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Debt Securities or by
the Company if such Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Security will be limited
to persons that have accounts with the applicable Depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
of the series represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Debt Securities in definitive form and will not be
considered the owners or holders thereof under the Indenture governing such Debt
Securities.
Payment of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. The Company expects that the Depositary for a
series of Debt Securities or its nominee, upon receipt of any payment of
principal of, premium, if any, and interest, if any, in respect of a Global
Security representing any such Debt Securities, immediately will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
for such Debt Securities as shown on the records of such Depositary or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name." Such payments will be the responsibility of such participants.
Neither the Company, the Trustee for such Debt Securities, any paying agent nor
the registrar for such Debt Securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Global Security for such Debt Securities
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Company may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of a series represented by one or more Global Securities and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security or Securities representing such series of Debt Securities.
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, the Trustee
and the Depositary for such Global Security, receive individual Debt Securities
of such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual Debt Securities of
the series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in registered
form and in denominations, unless otherwise specified by the Company, of $1,000
and integral multiples thereof.
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Limitations on Sale and Leaseback Transactions. At such time as any series
of Debt Securities has been issued and is outstanding, Sale and Leaseback
Transactions are prohibited unless (a) the Company or the Restricted Subsidiary
owning such Principal Property would be entitled to incur Secured Debt equal to
the amount realizable upon the sale or transfer of the property to be so leased
secured by a mortgage on such property without equally and ratably securing such
Debt Securities or (b) an amount equal to the value of the property so leased is
applied to the retirement (other than mandatory retirement) of the Debt
Securities of such series or certain other funded indebtedness of the Company
and its Restricted Subsidiaries ranking prior to or on a parity with the Debt
Securities within 120 days of the effective date of any such arrangement
(Section 3.7).
Certain Definitions. The following definitions are applicable to the
discussions of the Indentures (Article One).
"Subsidiary" means any corporation of which the Company, or the Company and
one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own voting securities entitling any one or more of the Company and
its Subsidiaries to elect a majority of the directors, either at all times, or
so long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.
"Principal Property" means any real property, manufacturing plant,
processing plant, pipeline, office building, warehouse or other physical
facility, or any other like depreciable or depletable asset of the Company or of
any Restricted Subsidiary, whether owned at the date of the applicable Indenture
or thereafter acquired (other than any facility thereafter acquired for the
control or abatement of atmospheric pollutants or contaminants or water, noise,
odor or other pollution), that in the opinion of the Board of Directors of the
Company is of material importance to the total business conducted by the Company
and its Restricted Subsidiaries, as a whole; provided, however, that any such
property shall not be deemed a Principal Property if such property does not have
a fair value in excess of 3% of the total assets included on a consolidated
balance sheet of the Company and its Restricted Subsidiaries prepared in
accordance with generally accepted accounting principles consistently applied.
"Restricted Subsidiary" means (a) any currently existing Subsidiary whose
principal assets and business are located in the United States or Canada, except
certain sales financing, real estate and other Subsidiaries so designated, and
(b) any Subsidiary that is designated by the Company to be a Restricted
Subsidiary.
"Secured Debt" means indebtedness for money borrowed by the Company or a
Restricted Subsidiary, and any other indebtedness of the Company or a Restricted
Subsidiary, on which interest is paid or payable (other than indebtedness owed
by a Restricted Subsidiary to the Company, by a Restricted Subsidiary to another
Restricted Subsidiary or by the Company to a Restricted Subsidiary), that in any
such case is secured by (a) a mortgage or other lien on any Principal Property
of the Company or a Restricted Subsidiary, or (b) a pledge, lien or other
security interest on any shares of stock or indebtedness of a Restricted
Subsidiary, or (c) in the case of any such indebtedness of the Company, a
guaranty by any Restricted Subsidiary. The amount of Secured Debt at any time
outstanding shall be the amount then owing thereon by the Company or a
Restricted Subsidiary.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
included on a consolidated balance sheet of the Company and its Restricted
Subsidiaries, less applicable reserves and other properly deductible items and
after deducting therefrom (a) all current liabilities and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles, all in accordance with generally accepted accounting
principles consistently applied.
"Sale and Leaseback Transaction" means the sale or transfer by the Company
or a Restricted Subsidiary of any Principal Property owned by it that has been
in full operation for more than 120 days prior to such sale or transfer with the
intention of taking back a lease on such property (other than a lease not
exceeding 36 months) where the use by the Company or such Restricted Subsidiary
of such property will be discontinued on or before the expiration of the term of
such lease.
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<PAGE> 10
Events of Default. Unless otherwise specified in the Prospectus Supplement,
an Event of Default is defined under each Indenture with respect to the Debt
Securities of any series issued under such Indenture as being: (a) default in
the payment of any installment of interest upon any of the Debt Securities of
such series when due, continued for 30 days; (b) default in the payment of
principal of or premium, if any, with respect to Debt Securities of such series
when due; (c) default in the payment or satisfaction of any sinking fund or
other purchase obligation with respect to Debt Securities of such series when
due; (d) default in the performance of any other covenant of the Company
applicable to Debt Securities of such series, continued for 60 days after
written notice to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in aggregate principal amount of the Debt
Securities of such series then outstanding and; (e) certain events of
bankruptcy, insolvency or reorganization (Section 5.1).
If any Event of Default shall occur and be continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding, by notice in writing to the Company
(and to the Trustee, if given by the holders), may declare the principal (or, in
the case of any series of Debt Securities originally issued at a discount from
their stated principal amount, such portion of the principal amount as may be
specified in the terms of such series) of all of the Debt Securities of such
series and the interest, if any, accrued thereon to be due and payable
immediately, but the holders of a majority in aggregate principal amount of the
Debt Securities of such series then outstanding, by notice in writing to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if all defaults under such Indenture are cured or waived (Section
5.1).
Each Indenture provides that no holder of any series of Debt Securities
then outstanding may institute any suit, action or proceeding with respect to,
or otherwise attempt to enforce, such Indenture, unless (i) such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, (ii) the holders of not less than 25% in aggregate
principal amount of such series of Debt Securities then outstanding shall have
made written request to the Trustee to institute such suit, action or proceeding
and shall have offered to the Trustee such reasonable indemnity as it may
require with respect thereto and (iii) the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding; provided that, subject to the
subordination provisions applicable to the Senior Subordinated Debt Securities,
the right of any holder of any Debt Security to receive payment of the principal
of, premium, if any, or interest, if any, on such Debt Security, on or after the
respective due dates, or to institute suit for the enforcement of any such
payment shall not be impaired or affected without the consent of such holder
(Section 5.4). The holders of a majority in aggregate principal amount of the
Debt Securities of such series then outstanding may 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 Debt
Securities of such series, provided that the Trustee may decline to follow such
direction if the Trustee determines that such action or proceeding is unlawful
or would involve the Trustee in personal liability (Section 5.7).
The Company is required to furnish to the Trustee annually a certificate as
to the compliance by the Company with all conditions and covenants under each
Indenture (Section 4.3).
Discharge and Defeasance. Unless otherwise specified in the applicable
Prospectus Supplement, the Company can discharge or defease its obligations with
respect to each series of Debt Securities as set forth below (Article Ten).
The Company may discharge all of its obligations (except those set forth
below) to holders of any series of Debt Securities issued under either Indenture
that have not already been delivered to the Trustee for cancellation and that
have either become due and payable or are by their terms due and payable within
one year (or scheduled for redemption within one year) by irrevocably depositing
with the Trustee cash or U.S. Government Obligations (as defined in such
Indenture), or a combination thereof, as trust funds in an amount certified to
be sufficient to pay when due the principal of and interest, if any, on all
outstanding Debt Securities of such series and to make any mandatory sinking
fund payments thereon when due.
Unless otherwise provided in the applicable Prospectus Supplement, the
Company may also discharge at any time all of its obligations (except those set
forth below) to holders of any series of Debt Securities issued
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<PAGE> 11
under either Indenture ("defeasance") if, among other things: (i) the Company
irrevocably deposits with the Trustee cash or U.S. Government Obligations, or a
combination thereof, as trust funds in an amount certified to be sufficient to
pay when due the principal of and interest, if any, on all outstanding Debt
Securities of such series and to make any mandatory sinking fund payments
thereon when due and such funds have been so deposited for 91 days; (ii) such
deposit will not result in a breach or violation of, or cause a default under,
any agreement or instrument to which the Company is a party or by which it is
bound; and (iii) the Company delivers to the Trustee an opinion of counsel to
the effect that the holders of such series of Debt Securities will not recognize
income, gain or loss for United States federal income tax purposes as a result
of such defeasance and that defeasance will not otherwise alter the United
States federal income tax treatment of such holders' principal and interest
payments on such series of Debt Securities. Such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States federal
income tax law occurring after the date of the Indenture relating to the Debt
Securities of such series, since such a result would not occur under current tax
law (Section 10.1).
Notwithstanding the foregoing, no discharge or defeasance described above
shall affect the following obligations to or rights of the holders of any series
of Debt Securities: (i) rights of registration of transfer and exchange of Debt
Securities of such series, (ii) rights of substitution of mutilated, defaced,
destroyed, lost or stolen Debt Securities of such series, (iii) rights of
holders of Debt Securities of such series to receive payments of principal
thereof and premium, if any, and interest, if any, thereon, upon the original
due dates therefor (but not upon acceleration), and to receive mandatory sinking
fund payments thereon when due, if any, (iv) rights, obligations, duties and
immunities of the Trustee, (v) rights of holders of Debt Securities of such
series as beneficiaries with respect to property so deposited with the Trustee
payable to all or any of them and (vi) obligations of the Company to maintain an
office or agency in respect of Debt Securities of such series (Section 10.1).
Modification of the Indenture. Each Indenture provides that the Company and
the Trustee may enter into supplemental indentures without the consent of the
holders of the Debt Securities to (a) evidence the assumption by a successor
entity of the obligations of the Company under such Indenture, (b) add covenants
or new events of default for the protection of the holders of such Debt
Securities, (c) cure any ambiguity or correct any inconsistency in the
Indenture, (d) establish the form and terms of Debt Securities of any series,
(e) evidence the acceptance of appointment by a successor trustee and (f) in the
case of Senior Debt Securities, secure such Debt Securities (Section 8.1).
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of each series then outstanding
and affected, to add any provisions to, or change in any manner or eliminate any
of the provisions of, such Indenture or of any supplemental indenture or modify
in any manner the rights of the holders of the Debt Securities of such series;
provided that the Company and the Trustee may not, without the consent of the
holder of each outstanding Debt Security affected thereby, (a) extend the stated
final maturity of any Debt Security, reduce the principal amount thereof, reduce
the rate or extend the time of payment of interest, if any, thereon, reduce or
alter the method of computation of any amount payable on redemption, repayment
or purchase by the Company, change the coin or currency in which principal,
premium, if any, and interest, if any, are payable, reduce the amount of the
principal of any original issue discount security payable upon acceleration or
provable in bankruptcy, impair or affect the right to institute suit for the
enforcement of any payment or repayment thereof or, if applicable, adversely
affect any right of prepayment at the option of the holder or (b) reduce the
aforesaid percentage in aggregate principal amount of Debt Securities of any
series issued under such Indenture, the consent of the holders of which is
required for any such modification (Section 8.2).
The Senior Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Senior Subordinated Debt Securities without the
written consent of each holder of Senior Indebtedness then outstanding that
would be adversely affected thereby (Section 8.6 of the Senior Subordinated Debt
Indenture).
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<PAGE> 12
Conversion or Exchange Rights. The Prospectus Supplement for any Offered
Debt Securities offered thereby will state the terms, if any, on which shares of
such Offered Debt Securities are convertible into, or exchangeable for,
securities of the Company or another person.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
General. Senior Debt Securities will be issued under the Senior Debt
Indenture and will rank pari passu with all other unsecured and unsubordinated
debt of the Company.
Limitations on Liens. At such time as any series of Senior Debt Securities
has been issued and is outstanding, the Company and its Restricted Subsidiaries
are prohibited from creating, incurring, assuming or guaranteeing any Secured
Debt without making effective provision whereby the Senior Debt Securities then
outstanding and any other indebtedness of or guaranteed by the Company or any
such Restricted Subsidiary then entitled thereto, subject to applicable
priorities of payment, shall be secured by such mortgage, security interest,
pledge, lien or encumbrance equally and ratably with any and all other
obligations and indebtedness thereby secured, so long as any such other
obligations and indebtedness shall be so secured; provided, that if any such
mortgage, security interest, pledge, lien or encumbrance securing such
Indebtedness ceases to exist, such equal and ratable security for the benefit of
the holders of Senior Debt Securities shall automatically cease to exist without
any further action; provided, further, that if such Indebtedness is expressly
subordinated to the Senior Debt Securities, the mortgage, security interest,
pledge, lien or encumbrance securing such subordinated Indebtedness shall be
subordinate and junior to the mortgage, security interest, pledge, lien or
encumbrance securing the Senior Debt Securities with the same relative priority
as such Indebtedness shall have with respect to the Senior Debt Securities
(Section 3.6 of the Senior Debt Indenture). The foregoing restrictions are not
applicable to (i) certain purchase money mortgages, (ii) certain mortgages to
finance construction on unimproved property, (iii) mortgages existing on
property at the time of acquisition by the Company or a Restricted Subsidiary,
(iv) mortgages existing on the property or on the outstanding shares or
indebtedness of a corporation at the time it becomes a Restricted Subsidiary,
(v) mortgages on property of a corporation existing at the time such corporation
is merged or consolidated with the Company or a Restricted Subsidiary, (vi)
mortgages in favor of governmental bodies to secure certain payments of
indebtedness, (vii) mortgages, security interests, pledges, liens or
encumbrances existing on property owned by the Company or any of its
Subsidiaries on the date of the applicable Indenture, (viii) mortgages, security
interests, pledges, liens or encumbrances created pursuant to the creation of
trusts or other arrangements funded solely with cash or securities of the type
customarily subject to such arrangements in customary financial practice with
respect to long-term or medium-term indebtedness for borrowed money, the sole
purpose of which is to make provision for the retirement or defeasance, without
prepayment of Indebtedness, (ix) mortgages, security interests, pledges, liens
or encumbrances on the assets or properties of ENSTAR Natural Gas Company, a
division of the Company, or on Alaska Pipeline Company, a Subsidiary of the
Company (together, "ENSTAR Alaska"), (x) mortgages, security interests, pledges,
liens or encumbrances securing (i) all or part of the cost of exploring,
producing, gathering, processing, marketing, drilling or developing any
properties of the Company or any of its Subsidiaries, or securing indebtedness
incurred to provide funds therefor, or (ii) indebtedness incurred to finance all
or part of the cost of acquiring, constructing, altering, improving or repairing
any such property or assets, or securing indebtedness incurred to provide funds
therefor; or (xi) extensions, renewals or replacements of the foregoing (Section
3.6 of the Senior Debt Indenture). Solely for the purpose of the foregoing
exceptions, the term "mortgage" shall be deemed to include any arrangements in
connection with a production payment or similar financing arrangement.
Notwithstanding the foregoing restrictions, the Company and any one or more
Restricted Subsidiaries may create, incur, assume or guarantee Secured Debt not
otherwise permitted or excepted without equally and ratably securing the Senior
Debt Securities of each series issued and outstanding under the Senior Debt
Indenture if the sum of (a) the amount of such Secured Debt plus (b) the
aggregate value of Sale and Leaseback Transactions (subject to certain
exceptions) does not exceed 10% of Consolidated Net Tangible Assets (excluding
ENSTAR Alaska) (Section 3.6 of the Senior Debt Indenture).
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<PAGE> 13
Consolidation, Merger, Sale or Conveyance. No consolidation or merger of
the Company, and no sale of substantially all of its property, shall be made
with or to another corporation if any Principal Property of the Company or a
Restricted Subsidiary would become subject to any mortgage or lien (other than
those permitted by Section 3.6 of the Senior Debt Indenture) unless prior
thereto all Senior Debt Securities then outstanding are secured (equally and
ratably, or with such other relative priority described above, with any other
indebtedness of or guaranteed by the Company or any Restricted Subsidiary then
entitled thereto) by a direct lien on any such Principal Property and certain
other properties (Section 9.2 of the Senior Debt Indenture). Subject to the
foregoing, the Company may, without the consent of the holders of Debt
Securities, consolidate with, merge into or transfer, exchange or dispose of all
of its properties to, any other corporation organized under the laws of the
United States or any political subdivision thereof or therein, provided that the
successor corporation assumes all obligations of the Company under the
Indentures and the Debt Securities and that certain other conditions are met.
PROVISIONS APPLICABLE SOLELY TO SENIOR SUBORDINATED DEBT SECURITIES
Certain Definitions. For purposes of the following discussion, the
following definitions are applicable (Article One of the Senior Subordinated
Debt Indenture).
"Indebtedness" is defined as, with respect to any person,
(a) (i) the principal of and premium, if any, and interest, if any, on
indebtedness for money borrowed of such person evidenced by bonds, notes,
debentures or similar obligations, including any guaranty by such person of
any indebtedness for money borrowed of any other person, evidenced by
bonds, notes, debentures or similar obligations, including any guarantee by
such person of any indebtedness of money borrowed by any other person,
whether any such indebtedness or guaranty is outstanding on the date of the
Indenture or is thereafter created, assumed or incurred, (ii) the principal
of and premium and interest, if any, on indebtedness for money borrowed,
incurred, assumed or guaranteed by such person in connection with the
acquisition by it or any of its subsidiaries of any other businesses,
properties or other assets and (iii) lease obligations that such person
capitalizes in accordance with Statement of Financial Accounting Standards
No. 13 promulgated by the Financial Accounting Standards Board or such
other generally accepted accounting principles as may be from time to time
in effect;
(b) any other indebtedness of such person, including any indebtedness
representing the balance deferred and unpaid of the purchase price of any
property or interest therein, and any guaranty, endorsement or other
contingent obligation of such person in respect of any indebtedness of
another that is outstanding on the date of the Indenture or is thereafter
created, assumed or incurred by such person; and
(c) any amendments, modifications, refundings, renewals or extensions
of any indebtedness or obligation described as Indebtedness in clauses (a)
or (b) above.
"Senior Indebtedness" is defined in the Senior Subordinated Debt Indenture
as Indebtedness of the Company outstanding at any time except (a) any
Indebtedness as to which, by the terms of the instrument creating or evidencing
the same, it is provided that such Indebtedness is not senior in right of
payment to the Senior Subordinated Debt Securities, (b) the Senior Subordinated
Debt Securities, (c) any Indebtedness of the Company to a wholly-owned
Subsidiary of the Company, (d) interest accruing after the filing of a petition
initiating certain events of bankruptcy or insolvency unless such interest is an
allowed claim enforceable against the Company in a proceeding under federal or
state bankruptcy laws and (e) trade payables.
"Senior Subordinated Indebtedness" means the Senior Subordinated Debt
Securities and any other Indebtedness of the Company that ranks pari passu with
the Senior Subordinated Debt Securities. Any Indebtedness of the Company that is
subordinate or junior by its terms in right of payment to any other Indebtedness
of the Company shall be subordinate to Senior Subordinated Indebtedness unless
the instrument creating or evidencing the same or pursuant to which the same is
outstanding specifically provides that such
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<PAGE> 14
Indebtedness (i) is to rank pari passu with other Senior Subordinated
Indebtedness and (ii) is not subordinated by its terms to any Indebtedness of
the Company which is not Senior Indebtedness.
"Subordinated Indebtedness" means the Senior Subordinated Debt Securities,
any other Senior Subordinated Indebtedness and any other Indebtedness that is
subordinate or junior in right of payment to Senior Indebtedness.
Subordination. The Senior Subordinated Debt Securities will be subordinate
and junior in right of payment, to the extent set forth in the Senior
Subordinated Debt Indenture, to all Senior Indebtedness of the Company. The
Senior Subordinated Debt Securities will rank senior to all existing and future
Indebtedness of the Company that is neither Senior Indebtedness nor Senior
Subordinated Indebtedness, and only Indebtedness of the Company that is Senior
Indebtedness will rank senior to the Senior Subordinated Debt Securities in
accordance with the subordination provisions of the Senior Subordinated
Indenture. If (i) the Company should default in the payment of any principal of,
premium, if any, or interest, if any, on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration of acceleration or otherwise or (ii) any other default with
respect to Senior Indebtedness shall occur and the maturity of such Senior
Indebtedness has been accelerated in accordance with its terms, then, upon
written notice of such default to the Company by the holders of such Senior
Indebtedness or any trustee therefor, unless and until such default shall have
been cured or waived or shall have ceased to exist or such acceleration shall
have been rescinded, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) will be made or agreed to be made for
principal of, premium, if any, or interest, if any, on any of the Senior
Subordinated Debt Securities, or in respect of any redemption, retirement,
purchase or other acquisition of the Senior Subordinated Debt Securities other
than those made in capital stock of the Company (or cash in lieu of fractional
shares thereof) (Sections 13.1 and 13.4 of the Senior Subordinated Debt
Indenture).
If any default (other than a default described in the preceding paragraph)
under the Senior Indebtedness, pursuant to which the maturity thereof may be
accelerated immediately or the expiration of any applicable grace periods occurs
(a "Senior Nonmonetary Default"), then, upon the receipt by the Company and the
Trustee of written notice thereof (a "Payment Notice") from or on behalf of
holders of such Senior Indebtedness specifying an election to prohibit such
payment and other action by the Company in accordance with the following
provisions of this paragraph, the Company may not make any payment or take any
other action that would be prohibited by the immediately preceding paragraph
during the period (the "Payment Blockage Period") commencing on the date of
receipt of such Payment Notice and ending on the earlier of (i) the date, if
any, on which the holders of such Senior Indebtedness or their representative
notify the Trustee that such Senior Nonmonetary Default is cured or waived or
ceases to exist or the Senior Indebtedness to which such Senior Nonmonetary
Default relates is discharged or (ii) the 179th day after the date of receipt of
such Payment Notice. Notwithstanding the provisions described in the immediately
preceding sentence, the Company may resume payments on the Debt Securities after
such Payment Blockage Period.
If (i) (A) without the consent of the Company, a receiver, conservator,
liquidator or trustee of the Company or of any of its property is appointed by
the order or decree of any court or agency or supervisory authority having
jurisdiction, and such decree or order remains in effect for more than 60 days
or (B) the Company is adjudicated bankrupt or insolvent or (C) any of its
property is sequestered by court order and such order remains in effect for more
than 60 days or (D) a petition is filed against the Company under any state or
federal bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or receivership law of any jurisdiction whether
now or hereafter in effect, and is not dismissed within 60 days after such
filing; or (ii) the Company (A) commences a voluntary case or other proceeding
seeking liquidation, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or other relief with respect to itself or its
debt or other liabilities under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or (B) consents to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or (C) fails generally to, or cannot, pay its
debts generally as they become due or (D) takes any corporate action to
authorize or effect any of the foregoing; or (iii) any Subsidiary of the
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<PAGE> 15
Company takes, suffers or permits to exist any of the events or conditions
referred to in the foregoing clause (i) or (ii), then all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) will first be paid in full before any payment or distribution,
whether in cash, securities or other property, is made to any holder of Senior
Subordinated Debt Securities on account of the principal of, premium, if any, or
interest, if any, on such Senior Subordinated Debt Securities. Any payment or
distribution, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
indebtedness evidenced by the Senior Subordinated Debt Securities, to the
payment of all Senior Indebtedness then outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment) that
would otherwise (but for the subordination provisions) be payable or deliverable
in respect of the Senior Subordinated Debt Securities of any series will be paid
or delivered directly to the holders of Senior Indebtedness in accordance with
the priorities then existing among such holders until all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) has been paid in full. In the event of any such proceeding, after
payment in full of all sums owing with respect to Senior Indebtedness, the
holders of Senior Subordinated Debt Securities, together with the holders of any
obligations of the Company ranking on a parity with the Senior Subordinated Debt
Securities, will be entitled to be repaid from the remaining assets of the
Company the amounts at that time due and owing on account of unpaid principal
of, premium, if any, or interest, if any, on the Senior Subordinated Debt
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or obligations of the Company ranking junior to the Senior Subordinated
Debt Securities and such other obligations (Section 13.1 of the Senior
Subordinated Debt Indenture).
If any payment or distribution of any character, whether in cash,
securities or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in the subordination
provisions with respect to the Senior Subordinated Debt Securities, to the
payment of all Senior Indebtedness then outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment), shall
be received by the Trustee or any holder of any Senior Subordinated Debt
Securities in contravention of any of the terms of the Senior Subordinated Debt
Indenture, such payment or distribution of securities will be received in trust
for the benefit of, and will be paid over or delivered and transferred to, the
holders of the Senior Indebtedness then outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Indebtedness remaining unpaid to the extent necessary to pay all such
Senior Indebtedness in full (Section 13.1 of the Senior Subordinated Debt
Indenture).
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Indebtedness may receive more, ratably, than holders
of the Senior Subordinated Debt Securities. Such subordination will not prevent
the occurrence of any Event of Default (as defined in the Indentures) or limit
the right of acceleration in respect of the Senior Subordinated Debt Securities.
Limitations on Liens. At such time as any series of Senior Subordinated
Debt Securities has been issued and is outstanding, the Company and its
Restricted Subsidiaries are prohibited from creating, incurring, assuming or
guaranteeing any Secured Debt that is expressly by its terms Subordinated
Indebtedness without making effective provision whereby the Senior Subordinated
Debt Securities then outstanding and any other indebtedness of or guaranteed by
the Company or any such Restricted Subsidiary then entitled thereto, subject to
applicable priorities of payment, shall be secured by such mortgage, security
interest, pledge, lien or encumbrance equally and ratably with any and all other
obligations and indebtedness thereby secured, so long as any such other
obligations and indebtedness shall be so secured; provided, that if any such
mortgage, security interest, pledge, lien or encumbrance securing such
Subordinated Indebtedness ceases to exist, such equal and ratable security for
the benefit of the holders of Senior Subordinated Debt Securities shall
automatically cease to exist without any further action; provided, further, that
if such Subordinated Indebtedness is expressly subordinated to the Senior
Subordinated Debt Securities, the mortgage, security interest, pledge, lien or
encumbrance securing such Subordinated Indebtedness shall be subordinate and
junior
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to the mortgage, security interest, pledge, lien or encumbrance securing the
Senior Subordinated Debt Securities with the same relative priority as such
Subordinated Indebtedness shall have with respect to the Senior Subordinated
Debt Securities (Section 3.6 of the Senior Subordinated Debt Indenture). The
foregoing restrictions are subject to the same exceptions applicable to the
comparable restriction on Secured Debt contained in Section 3.6 of the Senior
Debt Indenture. See "Provisions Applicable Solely to Senior Debt
Securities -- Limitation on Liens."
Consolidation, Merger, Sale or Conveyance. No consolidation or merger of
the Company, and no sale of substantially all of its property, shall be made
with or to another corporation if any Principal Property of the Company or a
Restricted Subsidiary would become subject to any mortgage or lien securing
Subordinated Indebtedness (other than those permitted by Section 3.6 of the
Senior Subordinated Debt Indenture) unless prior thereto all Senior Subordinated
Debt Securities then outstanding are secured (equally and ratably, or with such
other relative priority described above, with any other indebtedness of or
guaranteed by the Company or any Restricted Subsidiary then entitled thereto to
the extent such indebtedness constitutes Subordinated Indebtedness) by a direct
lien on any such Principal Property and certain other properties (Section 9.2 of
the Senior Subordinated Debt Indenture). Subject to the foregoing, the Company
may, without the consent of the holders of Debt Securities, consolidate with,
merge into or transfer, exchange or dispose of all of its properties to, any
other corporation organized under the laws of the United States or any political
subdivision thereof or therein, provided that the successor corporation assumes
all obligations of the Company under the Indentures and the Debt Securities and
that certain other conditions are met.
Limitation on Issuance of Certain Other Subordinated Indebtedness. The
Senior Subordinated Debt Indenture provides that the Company will not issue,
guarantee, assume or incur, directly or indirectly, any Indebtedness that by its
terms is both subordinate or junior in right of payment to Senior Indebtedness
and senior in right of payment to the Senior Subordinated Debt Securities.
(Section 3.8 of the Senior Subordinated Debt Indenture).
CONCERNING THE TRUSTEE
Pursuant to the Trust Indenture Act of 1939, as amended, should a default
occur with respect to either the Senior Debt Securities or the Senior
Subordinated Debt Securities, The Bank of New York would be required to resign
as Trustee under one of the Indentures within 90 days of such default unless
such default were cured, duly waived or otherwise eliminated.
The Bank of New York, the Trustee under both Indentures, makes loans to the
Company in the normal course of business.
DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock, par value $.10 per share, and 5,000,000 shares of Preferred Stock,
par value $1.00 per share, each of which is described below. The summary
description of the capital stock of the Company contained herein is necessarily
general and reference should be made in each case to the Company's Articles of
Incorporation, Bylaws and Rights Agreement described below, which are exhibits
to the Registration Statement of which this Prospectus is a part.
COMMON STOCK
General. As of August 1, 1997, an aggregate of 63,175,401 shares of Common
Stock were issued and outstanding, excluding shares held in treasury and
5,776,532 shares that had been reserved for issuance under the Company's
employee stock option plans. Subject to any prior rights of the Preferred Stock
then outstanding, holders of Common Stock are entitled to receive such dividends
as are declared by the Board of Directors out of funds legally available
therefor. Subject to the voting rights, if any, of the Preferred Stock, all
voting rights are vested in the holders of shares of Common Stock, each share
being entitled to one vote. The holders of Common Stock are not entitled to
cumulative voting rights in the election of directors. In the event
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<PAGE> 17
of the liquidation, dissolution or winding up of the Company, holders of Common
Stock are entitled to share ratably in all assets remaining after payment of
liabilities and any preferential amount to which the holders of Preferred Stock
are entitled. The holders of Common Stock have no preemptive or conversion
rights and are not subject to further calls or assessments by the Company. The
Common Stock currently outstanding is, and the Common Stock to be issued
hereunder will be, fully paid and nonassessable.
Classified Board; Removal of Directors. The Bylaws of the Company provide
that the members of the Company's Board of Directors are divided into three
classes as nearly equal as possible. Each class is elected for a three-year
term. At each annual meeting of shareholders, approximately one-third of the
members of the Board of Directors are elected for a three-year term and the
other directors remain in office until their three-year terms expire.
Furthermore, the Bylaws of the Company provide that neither any director nor the
Board of Directors may be removed without cause, and that any removal for cause
would require the affirmative vote of the holders of at least a majority of the
voting power of the outstanding capital stock entitled to vote for the election
of directors. Thus, control of the Board of Directors cannot be changed in one
year without removing the directors for cause as described above; rather, at
least two annual meetings must be held before a majority of the members of the
Board of Directors could be changed. The Bylaws of the Company provide that the
Bylaw provisions related to the classified board and removal of directors cannot
be altered, amended or repealed without the approval of the holders of at least
two-thirds of the outstanding shares entitled to vote thereon.
Preferred Stock Purchase Rights. In order to protect the Company's
shareholders from coercive or unfair takeover tactics, the Company's Board of
Directors on March 1, 1989 adopted a Share Purchase Rights Plan (the "Share
Purchase Rights Plan"). Pursuant to the Share Purchase Rights Plan, the
Company's Board of Directors declared a distribution of one right ("Right") to
purchase, until March 22, 1999 (or, if earlier, the redemption of the Rights), a
unit consisting of 1/100th of one share of Series B Preferred Stock (the "Unit")
at an exercise price of $65.50 per Unit, subject to certain antidilution
adjustments, for each outstanding share of Common Stock, and approved the
further issuance of Rights for all shares of Common Stock that are subsequently
issued. See "Preferred Stock -- Series B Preferred Stock" below. Accordingly, a
Right will be issued for each share of Common Stock issued hereunder. Until
certain specified conditions described below exist, the Rights will be
represented by the certificates for the Common Stock and will not be exercisable
or transferable apart from the certificates for the Common Stock.
Generally, in the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of the Company's consolidated
assets or earning power is sold, proper provision will be made so that each
holder of a Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, the number of shares of
common stock of the acquiring company that at the time of such transaction will
have a market value of two times the exercise price of the Right.
After the tenth day following the date on which any person or group of
affiliated or associated persons (other than certain excepted persons) acquires
beneficial ownership of 20% or more of the outstanding shares of Common Stock
(unless such person first acquires 20% or more of the outstanding shares of
Common Stock pursuant to a cash tender offer for all of the Common Stock, which
purchase increases such person's beneficial ownership to 85% or more of the
outstanding Common Stock) (an "Acquiring Person") or during such time as there
is an Acquiring Person, there shall be any reclassification of securities or
recapitalization or reorganization of the Company or other transaction or series
of transactions that has the effect of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its subsidiaries beneficially owned by the Acquiring
Person, proper provision shall be made so that each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
shares of Common Stock having a market value of two times the exercise price of
the Right.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired
or approval of the Board. The Rights should not interfere with any merger or
other business combination approved by the Board of Directors of the Company
since, among other things, the Board of
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Directors may, at its option, at any time until 10 days (subject to extension)
following the date on which a person or group (other than certain excepted
persons) acquires 20% or more of the outstanding Common Stock, redeem all but
not less than all the then outstanding Rights at $.01 per Right.
A Rights Agreement dated as of March 17, 1989, as amended, between the
Company and The First National Bank of Boston, as Rights Agent (as amended, the
"Rights Agreement"), specifies the terms of the Rights and the foregoing
description of the Rights is qualified in its entirety by reference to the
Rights Agreement, a copy of which is available upon written request to Investor
Relations, Seagull Energy Corporation, 1001 Fannin, Suite 1700, Houston, Texas
77002, telephone (713) 951-4700.
The transfer agent and registrar for the Common Stock of the Company is The
First National Bank of Boston.
PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain terms of a series of the Preferred
Stock offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of the Preferred Stock. If so indicated in
the Prospectus Supplement, the terms of any such series may differ from the
terms set forth below. The following description of the Preferred Stock
summarizes certain provisions of the Company's Articles of Incorporation and the
form of Statement of Designations filed as an exhibit to the Registration
Statement to which this Prospectus relates and is subject to and qualified in
its entirety by reference to the Articles of Incorporation and such Statement of
Designations that will be filed with the Commission promptly after the offering
of such series of Preferred Stock.
General. Under the Company's Articles of Incorporation, the Board of
Directors is authorized, without further shareholder action, to provide for the
issuance of up to 5,000,000 shares of Preferred Stock in one or more series,
with such voting powers, or without voting powers, and with such designations
and relative rights and preferences as shall be set forth in resolutions
providing for the issuance thereof adopted by the Board of Directors. At
present, 500,000 shares of Preferred Stock are designated as Series B Junior
Participating Preferred Stock (the "Series B Preferred Stock") in connection
with the Share Purchase Rights Plan described above, although no such shares of
Series B Preferred Stock are issued and outstanding. No other shares of
Preferred Stock are issued, outstanding or designated as to series. It is not
possible to state the actual effect of the authorization and issuance of a new
series of Preferred Stock upon the rights of holders of the Common Stock and
other series of Preferred Stock unless and until the Board of Directors
determines the attributes of such new series of Preferred Stock and the specific
rights of its holders. Such effects might include, however, (i) restrictions on
dividends on Common Stock and other series of Preferred Stock if dividends on
such new series of Preferred Stock have not been paid; (ii) dilution of the
voting power of Common Stock and other series of Preferred Stock to the extent
that such new series of Preferred Stock has voting rights, or to the extent that
any such new series of Preferred Stock is convertible into Common Stock; (iii)
dilution of the equity interest of Common Stock and other series of Preferred
Stock; and (iv) limitation on the right of holders of Common Stock and other
series of Preferred Stock to share in the Company's assets upon liquidation
until satisfaction of any liquidation preference attributable to such new series
of Preferred Stock. While the ability of the Company to issue Preferred Stock
provides flexibility in connection with possible acquisitions and other
corporate purposes, its issuance could be used to impede an attempt by a third
party to acquire a majority of the outstanding voting stock of the Company.
The Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation of such Preferred Stock, the number of shares offered and the
liquidation value thereof; (ii) the price at which such Preferred Stock will be
issued; (iii) the dividend rate (or method of calculation), the dates on which
dividends shall be payable, whether such dividends shall be cumulative or
noncumulative and, if cumulative, the dates from which dividends shall commence
to accumulate; (iv) the liquidation preference thereof; (v) any redemption or
sinking fund
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provisions; (vi) any conversion or exchange provisions of such Preferred Stock;
and (vii) any additional dividend, liquidation, redemption, sinking fund and
other rights, preferences, limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of the Preferred Stock, each series of the Preferred Stock will rank on a
parity as to dividends and distributions in the event of a liquidation with each
other series of the Preferred Stock, if any, and senior to the Series B
Preferred Stock. Holders of Preferred Stock will have no preemptive rights to
subscribe for or purchase shares of capital stock.
Dividend Rights. Holders of the Preferred Stock of each series will be
entitled to receive, when, as and if declared by the Board of Directors, out of
assets of the Company legally available therefor, cash dividends at such rates
and on such dates as are set forth in the Prospectus Supplement relating to such
series of the Preferred Stock. Such rate may be fixed or variable or both. Each
such dividend will be payable to the holders of record as they appear on the
stock books of the Company on such record dates as will be fixed by the Board of
Directors or a duly authorized committee thereof. Dividends on any series of the
Preferred Stock may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating thereto. If the Board of Directors fails to
declare a dividend payable on a dividend payment date on any series of Preferred
Stock for which dividends are noncumulative, then the right to receive a
dividend in respect of the dividend period ending on such dividend payment date
will be lost, and the Company shall have no obligation to pay the dividend
accrued for that period, whether or not dividends are declared for any future
period.
No full dividends will be declared or paid or set apart for payment on
preferred stock of any series ranking, as to dividends, on a parity with or
junior to any series of Preferred Stock for any period unless full dividends
have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof set apart for such payment on such series of
Preferred Stock for the then-current dividend period and, if such Preferred
Stock is cumulative, all other dividend periods terminating on or before the
date of payment of such full dividends. When dividends are not paid in full upon
any series of the Preferred Stock and any other preferred stock ranking on a
parity as to dividends with such series of the Preferred Stock, all dividends
declared upon such series of the Preferred Stock and any other preferred stock
ranking on a parity as to dividends will be declared pro rata so that the amount
of dividends declared per share on such series of the Preferred Stock and such
other preferred stock will in all cases bear to each other the same ratio that
accrued dividends, including, in the case of cumulative Preferred Stock,
accumulations, if any, in respect of prior dividend periods, per share on such
series of the Preferred Stock and such other preferred stock bear to each other.
Except as provided in the preceding sentence, unless full dividends, including,
in the case of cumulative Preferred Stock, accumulations, if any, in respect of
prior dividend periods, on all outstanding shares of any series of the Preferred
Stock have been paid or declared and set aside for payment, no dividends (other
than a dividend or distribution paid in shares of, or warrants, rights or
options exercisable for or convertible into, Common Stock or another stock
ranking junior to such series of the Preferred Stock as to dividends and upon
liquidation) will be declared or paid or set aside for payment or other
distributions made upon the Common Stock or any other stock of the Company
ranking junior to or on a parity with the Preferred Stock as to dividends or
upon liquidation, nor will any Common Stock or any other stock of the Company
ranking junior to or on a parity with such series of the Preferred Stock as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Company (except by
conversion into or exchange for stock of the Company ranking junior to such
series of the Preferred Stock as to dividends and upon liquidation). No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments which may be in arrears.
The amount of dividends payable for each dividend period will be computed
by annualizing the applicable dividend rate and dividing by the number of
dividend periods in a year, except that the amount of dividends payable for the
initial dividend period or any period longer or short other than a full dividend
period shall be computed on the basis of 30-day months and a 360-day year.
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Each series of Preferred Stock will be entitled to dividends as described
in the Prospectus Supplement relating to such series, which may be based upon
one or more methods of determination. Different series of the Preferred Stock
may be entitled to dividends at different dividend rates or based upon different
methods of determination.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Stock will be entitled to receive out of assets of the
Company available for distribution to stockholders, before any distribution of
assets is made to holders of Common Stock or any other class of stock ranking
junior to such series of the Preferred Stock upon liquidation, liquidating
distributions in the amount set forth in the Prospectus Supplement relating to
such series of the Preferred Stock plus an amount equal to accrued and unpaid
dividends for the then-current dividend period and, if such series of the
Preferred Stock is cumulative, for all dividend periods prior thereto. If, upon
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock of any series
and any other shares of stock of the Company ranking as to any such distribution
on a parity with such series of the Preferred Stock are not paid in full, the
holders of the Preferred Stock of such series and of such other shares will
share ratably in any such distribution of assets of the Company in proportion to
the full respective preferential amounts to which they are entitled. After
payment of the full amount of the liquidating distribution to which they are
entitled, the holders of such series of Preferred Stock will have no right or
claim to any of the remaining assets of the Company. Neither the sale of all or
substantially all the property or business of the Company nor the merger or
consolidation of the Company into or with any other corporation shall be deemed
to be a dissolution, liquidation or winding up, voluntary or involuntary, of the
Company.
Redemption. A series of the Preferred Stock may be redeemable, in whole or
in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund, in each case upon terms, at the times and
at the redemption prices set forth in the Prospectus Supplement relating to such
series.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such series
of Preferred Stock that will be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to any accrued and unpaid dividends thereon to the
date of redemption. The redemption price may be payable in cash, capital stock
or in cash received from the net proceeds of the issuance of capital stock of
the Company, as specified in the Prospectus Supplement relating to such series
of Preferred Stock.
If fewer than all the outstanding shares of any series of the Preferred
Stock are to be redeemed, whether by mandatory or optional redemption, the
selection of the shares to be redeemed will be determined by lot or pro rata as
may be determined by the Board of Directors or a duly authorized committee
thereof, or by any other method which may be determined by the Board of
Directors or such committee to be equitable. From and after the date of
redemption (unless default shall be made by the Company in providing for the
payment of the redemption price), dividends shall cease to accrue on the shares
of Preferred Stock called for redemption and all rights of the holders thereof
(except the right to receive the redemption price) shall cease.
In the event that full dividends, including accumulations in the case of
cumulative Preferred Stock, on any series of the Preferred Stock have not been
paid, such series of the Preferred Stock may not be redeemed in part and the
Company may not purchase or acquire any shares of such series of the Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of such series of the Preferred Stock.
Conversion or Exchange Rights. The Prospectus Supplement for any series of
the Preferred Stock will state the terms, if any, on which shares of such series
are convertible into, or exchangeable for, securities of the Company or another
person.
Voting Rights. Unless otherwise determined by the Board of Directors and
indicated in the Prospectus Supplement relating to a particular series of
Preferred Stock, the holders of the Preferred Stock will not be entitled to
vote, except as set forth below or except as expressly required by applicable
law. In the event the
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Company issues share of any series of Preferred Stock with voting rights,
including any voting rights in the case of dividend arrearages, unless otherwise
specified in the Prospectus Supplement relating to a particular series of
Preferred Stock, each such share will be entitled to one vote on matters on
which holders of such series of the Preferred Stock are entitled to vote. In the
case of any series of Preferred Stock having one vote per share on matters on
which holders of such series are entitled to vote, the voting power of such
series, on matters on which holders of such series and holders of other series
of preferred stock are entitled to vote as a single class, will depend on the
number of shares in such series, not on the aggregate liquidation preference or
initial offering price of the shares of such series of Preferred Stock.
Except as set forth in the Prospectus Supplement relating to a series of
Preferred Stock, if at any time dividends on any series of Preferred Stock shall
be in arrears in an amount equal to six quarterly dividends thereon, (which,
with respect to any series of Preferred Stock whose dividend periods are other
than quarterly, shall be deemed to be a number of dividend periods containing
not less than 540 days), all holders of Preferred Stock on which dividends are
in arrears and as to which similar voting rights have been conferred, voting as
a class, irrespective of series, shall have the right to elect two directors.
Directors so elected by such holders of Preferred Stock shall continue in office
until their successors shall have been elected or until such time as all accrued
and unpaid dividends for all previous dividend periods and for any current
dividend period on all shares of such Preferred Stock then outstanding shall
have been declared and paid or set apart for payment.
The affirmative vote or consent of the holders of at least two-thirds of
the outstanding shares of any series of Preferred Stock, voting as a separate
class, will be required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of the Articles of Incorporation that will
(i) increase or decrease the aggregate number of authorized shares of such
series or of Preferred Stock, (ii) increase or decrease the par value of the
Preferred Stock, (iii) effect an exchange, reclassification or cancellation of
all or part of the shares of such series or of the Preferred Stock, (iv) effect
an exchange, or create a right of exchange, of all or any part of the shares of
another class into the shares of such series or of Preferred Stock, (v) change
the designations, preferences, limitations or relative rights of the shares of
such series or the Preferred Stock, (vi) change the shares of such series or the
Preferred Stock into the same or a different number of shares of the same class
or series or another class or series, (vii) create a new class or series of
shares having rights and preferences equal, prior or superior to the shares of
such series or the Preferred Stock, or increase the rights and preferences of
any class or series having rights and preferences equal, prior or superior to
the shares of such series or the Preferred Stock, or increase the rights and
preferences of any class or series having rights or preferences later or
inferior to the shares of such series or the Preferred Stock in such a manner as
to become equal, prior or superior to the shares of such class or series, (viii)
divide the shares of Preferred Stock into series and fix and determine the
designation of such series and the variations in the relative rights and
preferences between the shares of such series, (ix) limit or deny the existing
preemptive rights of the shares of such series or of the Preferred Stock, (x)
cancel or otherwise affect dividends on the shares of such series or the
Preferred Stock that had accrued but had not been declared or (xi) include in or
delete from the Articles of Incorporation any provisions required or permitted
to be included in the Articles of Incorporation of a close corporation within
the meaning of the Texas Business Corporation Act. The foregoing provisions are
not applicable to the designation of series by the Board of Directors in the
manner described under the heading "General" above. If the holders of the
outstanding shares of Preferred Stock are entitled to vote as a class on a
proposed amendment and the amendment would affect all series of such class
(other than any series of which no shares are outstanding or any series that is
not affected by the amendment) equally, then the holders of the separate series
shall not be entitled to separate class votes, but shall instead vote together
as one class. Notwithstanding the foregoing, the approval of a proposed
amendment to the Articles of Incorporation that would solely effect changes in
the designations, preferences, limitations and relative rights, including voting
rights, of one or more series of shares that have been established by the Board
of Directors as described above under the heading "General," shall not require
the approval of the holders of the outstanding shares of any class or series
other than such series if the preferences, limitations and relative rights of
such series after giving effect to such amendment and of any series that may be
established as a result of a reclassification of such series are, in each case,
within those permitted to be fixed and determined by the Board of Directors with
respect to the establishment of any new series of shares pursuant to the
authority granted the Board of Directors as described above under the heading
"General."
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Series B Preferred Stock. In connection with the adoption of the Share
Purchase Rights Plan described above, on March 1, 1989, the Company's Board of
Directors designated 500,000 shares of the Company's authorized but unissued
Preferred Stock as the Series B Preferred Stock. The terms of Series B Preferred
Stock are such that one share of Series B Preferred Stock will be approximately
equivalent to 100 shares of Common Stock. Each 1/100th of one share of Series B
Preferred Stock has the same dividend and voting rights as one full share of
Common Stock. In addition, each 1/100th of one share of Series B Preferred Stock
has a minimum quarterly dividend of $.01, a liquidation preference and certain
other rights preferential to Common Stock. Pursuant to the Share Purchase Rights
Plan, Rights have been issued to the holders of the Common Stock, but such
Rights have not yet become exercisable or transferable apart from the
certificate for the Common Stock, and no shares of Series B Preferred Stock have
been issued.
DEPOSITARY SHARES
General. The Company may, at its option, elect to offer fractional shares
of Preferred Stock, rather than full shares of Preferred Stock. In the event
such option is exercised, the Company will issue to the public receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of Preferred Stock) of
a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such exhibits.
If required by law or applicable securities exchange rules, engraved
Depositary Receipts will be prepared. Pending the preparation of definitive
engraved Depositary Receipts, the Depositary may, upon the written order of the
Company, issue temporary Depositary Receipts substantially identical to (and
entitling the holders thereof to all the rights pertaining to) the definitive
Depositary Receipts but not in definitive form. Definitive Depositary Receipts
will be prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
Dividends and Other Distributions. The Depositary will distribute all cash
dividends or other cash distributions received in respect of the Preferred Stock
to the record holders of Depositary Shares relating to such Preferred Stock in
proportion to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
Redemption of Depositary Shares. If a series of Preferred Stock represented
by Depositary Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such series of Preferred Stock held by the
Depositary. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect to
such series of the Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing the shares of
Preferred Stock so redeemed. If fewer than all the
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<PAGE> 23
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot or pro rata as may be determined by the Depositary.
Voting the Preferred Stock. Upon receipt of notice of any meeting at which
the holders of the Preferred Stock are entitled to vote, the Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such Preferred Stock. Each record holder of
such Depositary Shares on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the Depositary
as to the exercise of the voting rights pertaining to the amount of the
Preferred Stock represented by such holder's Depositary Shares. The Depositary
will endeavor, insofar as practicable, to vote the amount of the Preferred Stock
represented by such Depositary Shares in accordance with such instructions, and
the Company will agree to take all action that may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares representing
such Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between the Company
and the Depositary. However, any amendment that materially and adversely alters
the rights of the holders of Depositary Shares will not be effective unless such
amendment has been approved by the holders of at least a majority of the
Depositary Shares then outstanding. The Deposit Agreement may be terminated by
the Company or the Depositary only if (i) all outstanding Depositary Shares have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of
Depositary Receipts.
Charges of Depositary. The Company will pay all transfer and other taxes
and governmental charges arising solely from the existence of the depositary
arrangements. The Company will pay charges of the Depositary in connection with
the initial deposit of the Preferred Stock and any redemption of the Preferred
Stock. Holders of Depositary Receipts will pay other transfer and other taxes
and governmental charges and such other charges, including a fee for the
withdrawal of shares of Preferred Stock upon surrender of Depositary Receipts,
as are expressly provided in the Deposit Agreement to be for their accounts.
Withdrawal of Preferred Stock. Upon surrender of Depositary Receipts at the
principal office of the Depositary, subject to the terms of the Deposit
Agreement, the owner of the Depositary Shares evidenced thereby is entitled to
delivery of the number of whole shares of Preferred Stock and all money and
other property, if any, represented by such Depositary Shares. Partial shares of
Preferred Stock will not be issued. If the Depositary Receipts delivered by the
holder evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole shares of Preferred Stock to
be withdrawn, the Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares. Holders
of Preferred Stock thus withdrawn will not thereafter be entitled to deposit
such shares under the Deposit Agreement or to receive Depositary Receipts
evidencing Depositary Shares therefor.
Miscellaneous. The Depositary will forward to holders of Depository
Receipts all reports and communications from the Company that are delivered to
the Depositary and that the Company is required to furnish to the holders of the
Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Receipts or other
persons believed to be competent and on documents believed to be genuine.
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<PAGE> 24
Resignation and Removal of Depositary. The Depositary may resign at any
time by delivering to the Company notice of its election to do so, and the
Company may at any time remove the Depositary, any such resignation or removal
to take effect upon the appointment of a successor Depositary and its acceptance
of such appointment. Such successor Depositary must be appointed within 60 days
after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. Securities
Warrants may be issued independently or together with Debt Securities, Preferred
Stock, Depositary Shares or Common Stock offered by any Prospectus Supplement
and may be attached to or separate from any such Offered Securities. Each series
of Securities Warrants will be issued under a separate warrant agreement (a
"Securities Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Securities Warrant Agent"), all as
set forth in the Prospectus Supplement relating to the particular issue of
Securities Warrants. The Securities Warrant Agent will act solely as an agent of
the Company in connection with the Securities Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders of
Securities Warrants or beneficial owners of Securities Warrants. The following
summary of certain provisions of the Securities Warrants does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all provisions of the Securities Warrant Agreements.
Reference is made to the Prospectus Supplement relating to the particular
issue of Securities Warrants offered thereby for the terms of and information
relating to such Securities Warrants, including, where applicable: (i) the
designation, aggregate principal amount, currencies, denominations, and terms of
the series of Debt Securities purchasable upon exercise of Debt Warrants and the
price at which such Debt Securities may be purchased upon such exercise; (ii)
the number of shares of Common Stock purchasable upon the exercise of Common
Stock Warrants and the price at which such number of shares of Common Stock may
be purchased upon such exercise; (iii) the number of shares and series of
Preferred Stock and/or Depositary Shares purchasable upon the exercise of
Preferred Stock Warrants and the price at which such number of shares of such
series of Preferred Stock and/or Depositary Shares may be purchased upon such
exercise; (iv) the date on which the right to exercise such Securities Warrants
shall commence and the date on which such right shall expire (the "Expiration
Date"); (v) United States Federal income tax consequences applicable to such
Securities Warrants; (vi) the amount of Securities Warrants outstanding as of
the most recent practicable date; and (vii) any other terms of such Securities
Warrants. Common Stock Warrants will be offered and exercisable for U.S. dollars
only. Securities Warrants will be issued in registered form only. The exercise
price for Securities Warrants will be subject to adjustment in accordance with
the applicable Prospectus Supplement.
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or such number of shares of Preferred Stock,
Depositary Shares or Common Stock at such exercise price as shall in each case
be set forth in, or calculable from, the Prospectus Supplement relating to the
Securities Warrants, which exercise price may be subject to adjustment upon the
occurrence of certain events as set forth in such Prospectus Supplement. After
the close of business on the Expiration Date (or such later date to which such
Expiration Date may be extended by the Company), unexercised Securities Warrants
will become void. The place or places where, and the manner in which, Securities
Warrants may be exercised shall be specified in the Prospectus Supplement
relating to such Securities Warrants.
Prior to the exercise of any Securities Warrants to purchase Debt
Securities, Preferred Stock, Depositary Shares or Common Stock, holders of such
Securities Warrants will not have any of the rights of holders of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock, as the case may
be, purchasable upon such exercise, including the right to receive payments of
principal of, premium, if any, or interest, if any, on the Debt Securities
purchasable upon such exercise or to enforce covenants in the applicable
Indenture, or to
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<PAGE> 25
receive payments of dividends, if any, on the Preferred Stock, Depositary Shares
or Common Stock purchasable upon such exercise, or to exercise any applicable
right to vote.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Securities to or through underwriters or dealers, and
also may sell Securities directly to one or more other purchasers or through
agents. The Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Offered Securities and any applicable
commissions or discounts.
Underwriters, dealers or agents may offer and sell the Offered Securities
at a fixed price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. In connection with the sale of the
Securities, underwriters or agents may be deemed to have received compensation
from the Company in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of the Securities for whom they may act
as agent. Underwriters or agents may sell the Securities to or through dealers,
and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters or commissions from the purchasers for whom
they may act as agent.
The Securities (other than the Common Stock), when first issued, will have
no established trading market. Any underwriters or agents to or through whom
Securities are sold by the Company for public offering and sale may make a
market in such Securities, but such underwriters or agents will not be obligated
to do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any such
Securities.
Any underwriters, dealers or agents participating in the distribution of
the Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Securities may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended (the "1933 Act"). Underwriters, dealers or
agents may be entitled, under agreements entered into with the Company, to
indemnification against or contribution toward certain civil liabilities,
including liabilities under the 1933 Act.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases will be subject to the condition that
the purchase of the Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject. The
underwriters and such agents will not have any responsibility in respect of the
validity or performance of such contracts.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Securities are
expected to be passed upon for the Company by Vinson & Elkins L.L.P., Houston,
Texas and for the underwriters, dealers or agents, if any, of a particular issue
of Securities by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), New York, New York. Simpson Thacher & Bartlett will
rely upon Vinson & Elkins L.L.P. with respect to matters of Texas law. Mr. J.
Evans Attwell, an attorney with Vinson & Elkins L.L.P., is a director of the
Company.
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<PAGE> 26
EXPERTS
The consolidated financial statements of Seagull Energy Corporation and
subsidiaries as of December 31, 1996 and 1995, and for each of the years in the
three-year period ended December 31, 1996, incorporated by reference herein and
elsewhere in the Registration Statement have been incorporated herein and in the
Registration Statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
report of KPMG Peat Marwick LLP covering the 1996 consolidated financial
statements refers to a change in the Company's method of accounting for the
impairment of long-lived assets and long-lived assets to be disposed of.
Certain information with respect to the oil and gas reserves associated
with a portion of the Company's oil and gas properties derived from the report
of DeGolyer and MacNaughton, independent consulting petroleum engineers, has
been included and incorporated by reference herein upon the authority of said
firm as experts with respect to the matters covered by such report and in giving
such report.
Certain information with respect to the oil and gas reserves associated
with a portion of the Company's oil and gas properties derived from the report
of Netherland, Sewell & Associates, Inc., independent petroleum engineers, has
been included and incorporated by reference herein in reliance upon such firm as
experts with respect to the matters contained therein.
Certain information with respect to the oil and gas reserves associated
with a portion of the Company's oil and gas properties derived from the report
of Ryder Scott Company, independent petroleum engineers, has been included and
incorporated by reference herein in reliance upon such firm as experts with
respect to the matters contained therein.
CERTAIN DEFINITIONS
As used in this Prospectus and any Prospectus Supplement:
With respect to volumes, "bcf" means billion cubic feet, "mcf" means
thousand cubic feet, "mmbbls" means million barrels, one "bcfe" equals the
energy equivalent of one bcf of natural gas, "mmcf/d" means million cubic
feet per day, "mbbls/d" means thousand barrels per day, "bbls/d" means
barrels per day and one "mmcfe/d" means the energy equivalent of one
million cubic feet of natural gas per day. Unless otherwise indicated in
this Prospectus or in any Prospectus Supplement, gas volumes are stated at
the legal pressure base of the state or area in which the reserves are
located and at 60 degrees Fahrenheit. Where crude oil, condensate and
natural gas liquids volumes are converted into natural gas equivalents, a
ratio of six mcf to one barrel is used, which approximates the relative
energy content of crude oil, condensate and natural gas liquids as compared
to natural gas.
When used in describing acreage on drilling locations, the term "net"
refers to the total acres on drilling locations in which the Company has a
working interest, multiplied by the percentage working interest owned by
the Company. When used in describing production, the term "net" refers to
the sum of (i) the total production in which the Company has a working
interest, multiplied by the percentage of net revenue interest owned by the
Company and (ii) the total production that is attributable to royalty
interests held by the Company.
"Proved" reserves refer to net proved developed and undeveloped
reserves of crude oil, condensate, natural gas and natural gas liquids that
geological and engineering data demonstrate with reasonable certainty to be
economically recoverable in the future from known reservoirs under existing
conditions. Proved "developed" reserves are those proved reserves
reasonably expected to be recovered with existing equipment and operating
methods, while proved "undeveloped" reserves are those proved reserves
reasonably expected to be recovered from new wells on undrilled acreage,
from existing wells where a relatively large expenditure is required and
from acreage where an application of fluid injection or other improved
recovery technique is contemplated (where such technique has been proved
effective by actual tests in the area in the same reservoir or one with
similar rock and fluid properties). THE RESERVE
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VOLUMES PROVIDED IN AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR IN
ANY PROSPECTUS SUPPLEMENT ARE ESTIMATES ONLY AND SHOULD NOT BE CONSTRUED AS
BEING EXACT QUANTITIES. THEY MAY OR MAY NOT BE ACTUALLY RECOVERED.
MOREOVER, ESTIMATES OF PROVED RESERVES MAY INCREASE OR DECREASE AS A RESULT
OF FUTURE OPERATIONS OF THE COMPANY AND CHANGES IN MARKET CONDITIONS.
A "reserve life index" is a measure of how long it will take to
produce a quantity of reserves, calculated by dividing end of year reserves
by annual production for the most recent fiscal year (in gas equivalents).
An "infill" well is a well drilled between known producing wells to better
exploit the reservoir. "Deliverability" refers to the volume of net
production capability attributable to a well or group of wells. "Workover
expenses" are the remedial costs incurred on producing wells to increase
the rate of production. "Shut in" refers to the closing of the valves on a
well so that it stops producing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
securities being registered are estimated as follows:
<TABLE>
<S> <C>
Registration Fee............................................ $ 1
Blue Sky fees and expenses.................................. 5,000
Legal fees and expenses..................................... 100,000
Accounting fees and expenses................................ 35,000
Printing and engraving expenses............................. 100,000
Trustee's fees and expenses................................. 5,000
Depositary's fees and expenses.............................. 5,000
Miscellaneous expenses...................................... 9,999
--------
Total............................................. $260,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02-1 of the Texas Business Corporation Act provides that any
director or officer of a Texas corporation may be indemnified against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by him
in connection with or in defending any action, suit or proceeding in which he is
a party by reason of his position. With respect to any proceeding arising from
actions taken in his official capacity, as a director or officer, he may be
indemnified so long as it shall be determined that he conducted himself in good
faith and that he reasonably believed that such conduct was in the corporation's
best interest. In cases not concerning conduct in his official capacity as a
director or officer, a director or officer may be indemnified so long as it
shall be determined that he conducted himself in good faith and that he
reasonably believed that his conduct was not opposed to the corporation's best
interest. In the case of any criminal proceeding, a director or officer may be
indemnified if he had no reasonable cause to believe his conduct was unlawful.
If a director or officer is wholly successful, on the merits or otherwise, in
connection with such a proceeding, such indemnification is mandatory.
Article VI of the Company's Bylaws requires the indemnification of officers
and directors to the fullest extent permitted by the Texas Business Corporation
Act. The Company also has policies insuring its officers and directors against
certain liabilities for actions taken in such capacities, including liabilities
under the Securities Act of 1933.
Reference is made to Article Eleven of the Articles of Incorporation of the
Registrant, which was adopted by the Company's shareholders on May 11, 1988 and
which provides as follows:
"ARTICLE ELEVEN
A director of the corporation shall not be liable to the corporation
or its shareholders for monetary damages for an act or omission in the
director's capacity as a director, except for liability (i) for any breach
of the director's duty of loyalty to the corporation or its shareholders;
(ii) for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law; (iii) for any transaction from
which the director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the director's office;
(iv) for acts or omissions for which the liability of a director is
expressly provided for by statute; or (v) for acts related to an unlawful
stock repurchase or dividend payment. Any repeal or amendment of this
Article by the shareholders of the corporation shall be prospective only,
and shall not adversely affect any limitation on the liability of a
director of the corporation existing at the time of such repeal or
amendment. In addition to the circumstances in which a director of the
corporation is not liable as set forth in the preceding sentences, a
director shall not be
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<PAGE> 29
liable to the fullest extent permitted by any provision of the statutes of
Texas hereafter enacted that further limits the liability of a director."
Effective as of August 28, 1989, Article 7.06.B of the Texas Miscellaneous
Corporation Laws Act was amended to read in its entirety as follows:
"B. The articles of incorporation of a corporation may provide that a
director of the corporation shall not be liable, or shall be liable only to
the extent provided in the articles of incorporation, to the corporation or
its shareholders or members for monetary damages for an act or omission in
the director's capacity as a director, except that this article does not
authorize the elimination or limitation of the liability of a director to
the extent the director is found liable for:
(1) a breach of the director's duty of loyalty to the corporation
or its shareholders or members;
(2) an act or omission not in good faith that constitutes a breach
of duty of the director to the corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law;
(3) a transaction from which the director received an improper
benefit, whether or not the benefit resulted from an action taken within
the scope of the director's office; or
(4) an act or omission for which the liability of a director is
expressly provided for by an applicable statute."
ITEM 16. EXHIBITS
<TABLE>
<S> <S>
***1.1 -- Proposed Form of Underwriting Agreement.
2.1 -- Share Sale Agreement between Seagull Energy Canada
Holding Company, 745910 Alberta Ltd., Seagull Energy
Corporation and Rio Alto Exploration Ltd. in respect of
the shares of Seagull Energy Canada Ltd. (incorporated by
reference to Exhibit 2.1 to Current Report on Form 8-K
dated September 11, 1997)
**4.1 -- Form of Debt Securities.
***4.2 -- Form of Senior Indenture among the Company and The Bank
of New York, as Trustee.
***4.3 -- Form of Senior Subordinated Indenture among the Company
and The Bank of New York, as Trustee.
4.4 -- Senior Indenture by and between the Company and The Bank
of New York, as Trustee, dated as of July 15, 1993
(incorporated by reference to Exhibit 4.1 to Current
Report on Form 8-K dated August 4, 1993).
4.5 -- Senior Subordinated Indenture by and between the Company
and The Bank of New York, as Trustee, dated as of July
15, 1993 (incorporated by reference to Exhibit 4.2 to
Current Report on Form 8-K dated August 4, 1993).
4.6 -- Specimen of 7 7/8% Senior Note due 2003 and resolutions
adopted by the Chairman of the Board of Directors
(incorporated by reference to Exhibit 4.3 to Current
Report on Form 8-K dated August 4, 1993).
4.7 -- Specimen of 8 5/8% Senior Subordinated Note due 2005 and
resolutions adopted by the Chairman of the Board of
Directors (incorporated by reference to Exhibit 4.4 to
Current Report on Form 8-K dated August 4, 1993).
</TABLE>
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<PAGE> 30
<TABLE>
<S> <C>
4.8 -- Articles of Incorporation of the Company, as amended,
including Articles of Amendment filed May 12, 1988, May
21, 1991, and May 21, 1993 with the Secretary of State of
the State of Texas, that certain Statement of Relative
Rights and Preferences related to the designation and
issuance of the Company's $2.25 Convertible Exchangeable
Preferred Stock, Series A, filed August 6, 1986 with the
Secretary of State of the State of Texas and that certain
Statement of Resolution Establishing Series of Shares of
Series B Junior Participating Preferred Stock of Seagull
Energy Corporation filed March 21, 1989 with the
Secretary of State of the State of Texas (incorporated by
reference to Exhibit 3.1 to Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993).
*4.9 -- Bylaws of the Company as amended through March 7, 1997.
4.10 -- Rights Agreement dated as of March 17, 1989 between the
Company and NCNB Texas National Bank, as Rights Agent,
which includes the form of Statement of Resolution
setting forth the terms of the Series B Junior
Participating Preferred Stock, par value $1.00 per share,
as Exhibit A, the form of Right Certificate as Exhibit B
and the Summary of Rights to Purchase Preferred Shares as
Exhibit C (incorporated by reference to Exhibit 4.8 to
Quarterly Report on Form 10-Q for the quarter ended June
30, 1993).
4.11 -- First Amendment to Rights Agreement by and between the
Company and NationsBank of Texas, N.A. (formerly NCNB
Texas National Bank) dated as of June 18, 1992
(incorporated by reference to Exhibit 3.4 to Registration
Statement on Form S-3 (File No. 33-55426)).
**4.12 -- Form of Securities Warrants.
**4.13 -- Form of Depositary Agreement.
**4.14 -- Form of Depositary Receipt.
4.15 -- Credit Agreement, U.S. $450 million Revolving Credit and
Competitive Bid Facility, dated June 17, 1997, among
Seagull Energy Corporation, The Chase Manhattan Bank,
Individually and as Agent, and the other Banks signatory
hereto (incorporated by reference to Exhibit 4.1 to
Quarterly Report on Form 10-Q for the quarter ended June
30, 1997).
4.16 -- Credit Agreement, U.S. $100 million Revolving Credit
Facility, dated June 17, 1997, among Seagull Energy
Canada Ltd. and The Chase Manhattan Bank of Canada,
Individually and as Arranger and Administrative Agent,
The Bank of Nova Scotia, Individually and as Paying Agent
and Co-Agent, Canadian Imperial Bank of Commerce,
Individually and as Co-Agent, and the other Banks
signatory hereto (incorporated by reference to Exhibit
4.2 to Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997).
**5.1 -- Opinion of Vinson & Elkins L.L.P.
*12.1 -- Computation of Ratio of Earnings to Fixed Charges.
***23.1 -- Consent of KPMG Peat Marwick LLP.
23.2 -- Consent of Vinson & Elkins L.L.P. (included in Exhibit
5.1).
*23.3 -- Consent of Ryder Scott Company, independent petroleum
engineers.
*23.4 -- Consent of DeGolyer and MacNaughton, independent
consulting petroleum engineers.
*23.5 -- Consent of Netherland, Sewell & Associates, Inc.,
independent petroleum engineers.
*24.1 -- Powers of Attorney.
*25.1 -- Statements of eligibility of Trustee.
</TABLE>
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<PAGE> 31
- ---------------
* Filed previously.
** The Company will file any forms of Debt Securities, Securities Warrants,
Depositary Receipts or Depositary Agreement, or any legal opinions, not
previously so filed in a Current Report on Form 8-K. A qualified legal
opinion of Vinson & Elkins L.L.P. is filed herewith.
*** Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
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.
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 set forth in response to Item 15, 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,
II-4
<PAGE> 32
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.
II-5
<PAGE> 33
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 amendment to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Houston, State of Texas, on the 18th day of
September, 1997.
SEAGULL ENERGY CORPORATION
By: /s/ BARRY J. GALT
-----------------------------------
Barry J. Galt
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement Amendment has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ J. EVANS ATTWELL* Director September 18, 1997
- ---------------------------------------------------
J. Evans Attwell
/s/ RICHARD J. BURGESS* Director September 18, 1997
- ---------------------------------------------------
Richard J. Burgess
/s/ MILTON CARROLL* Director September 18, 1997
- ---------------------------------------------------
Milton Carroll
/s/ THOMAS H. CRUIKSHANK* Director September 18, 1997
- ---------------------------------------------------
Thomas H. Cruikshank
/s/ JOHN W. ELIAS* Executive Vice President September 18, 1997
- --------------------------------------------------- and Director
John W. Elias
/s/ PETER J. FLUOR* Director September 18, 1997
- ---------------------------------------------------
Peter J. Fluor
/s/ BARRY J. GALT* Chairman of the Board, Chief September 18, 1997
- --------------------------------------------------- Executive Officer and
Barry J. Galt Director (Principal
Executive Officer)
/s/ WILLIAM R. GRANT* Director September 18, 1997
- ---------------------------------------------------
William R. Grant
Director
- ---------------------------------------------------
Dean P. Guerin
/s/ GORDON L. MCCONNELL* Vice President and Controller September 18, 1997
- --------------------------------------------------- (Principal Accounting
Gordon L. McConnell Officer)
/s/ RICHARD M. MORROW* Director September 18, 1997
- ---------------------------------------------------
Richard M. Morrow
</TABLE>
II-6
<PAGE> 34
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DEE S. OSBORNE* Director September 18, 1997
- ---------------------------------------------------
Dee S. Osborne
Director
- ---------------------------------------------------
Sidney R. Petersen
/s/ SAM F. SEGNAR* Director September 18, 1997
- ---------------------------------------------------
Sam F. Segnar
/s/ WILLIAM L. TRANSIER Senior Vice President and September 18, 1997
- --------------------------------------------------- Chief Financial Officer
William L. Transier (Principal
Financial Officer)
/s/ ROBERT F. VAGT* Director September 18, 1997
- ---------------------------------------------------
Robert F. Vagt
Director
- ---------------------------------------------------
R. A. Walker
*By: /s/ WILLIAM L. TRANSIER
---------------------------------------------
William L. Transier, Attorney in Fact
</TABLE>
II-7
<PAGE> 35
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
***1.1 -- Proposed Form of Underwriting Agreement.
</TABLE>
<TABLE>
<S> <C>
2.1 -- Share Sale Agreement between Seagull Energy Canada
Holding Company, 745910 Alberta Ltd., Seagull Energy
Corporation and Rio Alto Exploration Ltd. in respect of
the shares of Seagull Energy Canada Ltd. (incorporated by
reference to Exhibit 2.1 to Current Report on Form 8-K
dated September 11, 1997)
**4.1 -- Form of Debt Securities.
***4.2 -- Form of Senior Indenture among the Company and The Bank
of New York, as Trustee.
***4.3 -- Form of Senior Subordinated Indenture among the Company
and The Bank of New York, as Trustee.
4.4 -- Senior Indenture by and between the Company and The Bank
of New York, as Trustee, dated as of July 15, 1993
(incorporated by reference to Exhibit 4.1 to Current
Report on Form 8-K dated August 4, 1993).
4.5 -- Senior Subordinated Indenture by and between the Company
and The Bank of New York, as Trustee, dated as of July
15, 1993 (incorporated by reference to Exhibit 4.2 to
Current Report on Form 8-K dated August 4, 1993).
4.6 -- Specimen of 7 7/8% Senior Note due 2003 and resolutions
adopted by the Chairman of the Board of Directors
(incorporated by reference to Exhibit 4.3 to Current
Report on Form 8-K dated August 4, 1993).
4.7 -- Specimen of 8 5/8% Senior Subordinated Note due 2005 and
resolutions adopted by the Chairman of the Board of
Directors (incorporated by reference to Exhibit 4.4 to
Current Report on Form 8-K dated August 4, 1993).
4.8 -- Articles of Incorporation of the Company, as amended,
including Articles of Amendment filed May 12, 1988, May
21, 1991, and May 21, 1993 with the Secretary of State of
the State of Texas, that certain Statement of Relative
Rights and Preferences related to the designation and
issuance of the Company's $2.25 Convertible Exchangeable
Preferred Stock, Series A, filed August 6, 1986 with the
Secretary of State of the State of Texas and that certain
Statement of Resolution Establishing Series of Shares of
Series B Junior Participating Preferred Stock of Seagull
Energy Corporation filed March 21, 1989 with the
Secretary of State of the State of Texas (incorporated by
reference to Exhibit 3.1 to Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993).
*4.9 -- Bylaws of the Company as amended through March 7, 1997.
4.10 -- Rights Agreement dated as of March 17, 1989 between the
Company and NCNB Texas National Bank, as Rights Agent,
which includes the form of Statement of Resolution
setting forth the terms of the Series B Junior
Participating Preferred Stock, par value $1.00 per share,
as Exhibit A, the form of Right Certificate as Exhibit B
and the Summary of Rights to Purchase Preferred Shares as
Exhibit C (incorporated by reference to Exhibit 4.8 to
Quarterly Report on Form 10-Q for the quarter ended June
30, 1993).
4.11 -- First Amendment to Rights Agreement by and between the
Company and NationsBank of Texas, N.A. (formerly NCNB
Texas National Bank) dated as of June 18, 1992
(incorporated by reference to Exhibit 3.4 to Registration
Statement on Form S-3 (File No. 33-55426)).
**4.12 -- Form of Securities Warrants.
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
**4.13 -- Form of Depositary Agreement.
**4.14 -- Form of Depositary Receipt.
4.15 -- Credit Agreement, U.S. $450 million Revolving Credit and
Competitive Bid Facility, dated June 17, 1997, among
Seagull Energy Corporation, The Chase Manhattan Bank,
Individually and as Agent, and the other Banks signatory
hereto (incorporated by reference to Exhibit 4.1 to
Quarterly Report on Form 10-Q for the quarter ended June
30, 1997).
4.16 -- Credit Agreement, U.S. $100 million Revolving Credit
Facility, dated June 17, 1997, among Seagull Energy
Canada Ltd. and The Chase Manhattan Bank of Canada,
Individually and as Arranger and Administrative Agent,
The Bank of Nova Scotia, Individually and as Paying Agent
and Co-Agent, Canadian Imperial Bank of Commerce,
Individually and as Co-Agent, and the other Banks
signatory hereto (incorporated by reference to Exhibit
4.2 to Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997).
**5.1 -- Opinion of Vinson & Elkins L.L.P.
*12.1 -- Computation of Ratio of Earnings to Fixed Charges.
***23.1 -- Consent of KPMG Peat Marwick LLP.
23.2 -- Consent of Vinson & Elkins L.L.P. (included in Exhibit
5.1).
*23.3 -- Consent of Ryder Scott Company, independent petroleum
engineers.
*23.4 -- Consent of DeGolyer and MacNaughton, independent
consulting petroleum engineers.
*23.5 -- Consent of Netherland, Sewell & Associates, Inc.,
independent petroleum engineers.
*24.1 -- Powers of Attorney.
*25.1 -- Statements of eligibility of Trustee.
</TABLE>
- ---------------
* Filed previously.
** The Company will file any forms of Debt Securities, Securities Warrants,
Depositary Receipts or Depositary Agreement, or any legal opinions, not
previously so filed in a Current Report on Form 8-K. A qualified legal
opinion of Vinson & Elkins L.L.P. is filed herewith.
*** Filed herewith.
<PAGE> 1
EXHIBIT 1.1
SEAGULL ENERGY CORPORATION
(a Texas corporation)
Common Stock, Preferred Stock,
Depositary Shares, Debt Securities
and Warrants to Purchase Common Stock,
Preferred Stock, Depositary Shares or Debt Securities
UNDERWRITING AGREEMENT
September ___, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Seagull Energy Corporation, a Texas corporation (the "Company"),
proposes to issue and sell (i) up to $300,000,100 aggregate initial public
offering price of its (a) shares of common stock, par value $0.10 per share
(the "Common Stock"), accompanied by rights to purchase Junior Participating
Preferred Stock (the "Rights"), (b) shares of preferred stock, par value $1.00
per share, in one or more series (the "Preferred Stock"), which may be issued
in the form of depositary shares evidenced by depositary receipts (the
"Depositary Shares"), (c) unsecured senior or senior subordinated debt
securities, in one or more series, consisting of notes, debentures or other
evidences of indebtedness (the "Debt Securities") as more fully described
below, or (d) warrants (the "Warrants") to purchase Common Stock, Preferred
Stock, Depositary Shares or Debt Securities, or any combination thereof, and
(ii) up to an additional $100,000,000 aggregate initial offering price of its
Debt Securities, in each case, from time to time, in or pursuant to one or more
offerings on terms to be determined at the time of sale.
The Preferred Stock will be issued in one or more series and each
series of Preferred Stock may vary, as applicable, as to the title, specific
number of shares, rank, stated value, liquidation preference, dividend rate or
rates (or method of calculation), dividend payment dates, redemption
provisions, sinking fund requirements, conversion provisions (and terms of the
related Underlying Securities (as defined below)) and any other variable terms
as set forth in the applicable certificate of designations (each, the
"Certificate of Designations") relating to such series of Preferred Stock. A
series of Preferred Stock may be represented by Depositary Shares that are
evidenced by depositary receipts (the "Depositary Receipts") issued pursuant to
a deposit agreement (each, a "Deposit Agreement") among the Company, the
depositary identified therein (the "Depositary") and the registered holders of
the Depositary Receipts issued thereunder.
The Debt Securities will be issued in one or more series as unsecured
senior indebtedness (the "Senior Debt Securities") under an indenture dated as
of ________, 1997 (the "Senior Indenture"), between the Company and The Bank of
New York, as trustee (the "Senior Trustee"), or as senior subordinated
indebtedness (the "Subordinated Debt Securities") under an indenture dated as
of ________, 1997 (the "Subordinated Indenture", and collectively with the
-1-
<PAGE> 2
Senior Indenture, the "Indentures", and each, an "Indenture"), between the
Company and The Bank of New York, as trustee (the "Subordinated Trustee", and
collectively with the Senior Trustee, the "Trustees", and each, a "Trustee").
Each series of Debt Securities may vary, as applicable, as to title, aggregate
principal amount, rank, interest rate or formula and timing of payments
thereof, stated maturity date, redemption and/or repayment provisions, sinking
fund requirements, conversion provisions (and terms of the related Underlying
Securities) and any other variable terms established by or pursuant to the
applicable Indenture.
Each issue of Warrants will be issued pursuant to a separate warrant
agreement (each, a "Warrant Agreement") between the Company and the warrant
agent identified therein (each, a "Warrant Agent"). The Warrants may vary, as
applicable, as to, among other terms, title, type, specific number, exercise
dates or periods, exercise price(s), expiration date(s) and terms of the
related Underlying Securities.
As used herein, "Securities" shall mean the Common Stock, Preferred
Stock, Depositary Shares, Senior Debt Securities, Subordinated Debt Securities,
Warrants, or any combination thereof, initially issuable by the Company, and
"Underlying Securities" shall mean the Common Stock, Preferred Stock,
Depositary Shares, Senior Debt Securities or Subordinated Debt Securities
issuable upon exercise of the Warrants, as applicable, or upon conversion of
the Preferred Stock, Depositary Shares, Senior Debt Securities or Subordinated
Debt Securities, as applicable.
Whenever the Company determines to make an offering of Securities
through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), or through an underwriting syndicate managed by Merrill
Lynch, the Company will enter into an agreement (each, a "Terms Agreement")
providing for the sale of such Securities to, and the purchase and offering
thereof by, Merrill Lynch and such other underwriters, if any, selected by
Merrill Lynch (the "Underwriters", which term shall include Merrill Lynch,
whether acting as sole Underwriter or as a member of an underwriting syndicate,
as well as any Underwriter substituted pursuant to Section 10 hereof).
Notwithstanding the foregoing, except as expressly provided in any Terms
Agreement, nothing in this Underwriting Agreement shall obligate the Company to
designate Merrill Lynch as an underwriter with respect to the offer and sale of
any of the Securities. The Terms Agreement relating to the offering of
Securities shall specify the number or aggregate principal amount, as the case
may be, of Securities to be initially issued (the "Initial Underwritten
Securities"), the name of each Underwriter participating in such offering
(subject to substitution as provided in Section 10 hereof) and the name of any
Underwriter other than Merrill Lynch acting as co-manager in connection with
such offering, the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis and, if
on a fixed price basis, the initial offering price, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters, the
form, time, date and place of delivery and payment of the Initial Underwritten
Securities and any other material variable terms of the Initial Underwritten
Securities, as well as the material variable terms of any related Underlying
Securities. In addition, if applicable, such Terms Agreement shall specify
whether the Company has agreed to grant to the Underwriters an option to
purchase additional Securities to cover over-allotments, if any, and the number
or aggregate principal amount, as the case may be, of Securities subject to
such option (the "Option Underwritten Securities"). As used herein, the term
"Underwritten Securities" shall include the Initial Underwritten Securities and
all or any portion of any Option Underwritten Securities. The Terms Agreement,
which shall be substantially in the form of Exhibit A hereto, may take the form
of an exchange of any standard form of written telecommunication between the
Company and Merrill Lynch, acting for itself and, if applicable, as
representative of any other Underwriters. Each offering of Underwritten
Securities through Merrill Lynch as sole Underwriter or through an underwriting
syndicate managed by Merrill Lynch will be governed by this Underwriting
Agreement, as supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") (i) a registration statement on Form S-3 (No. 33-65118), as
amended (the "First Registration Statement"), (ii) a registration statement on
Form S-3 (No. 33-64051) as amended (the "Second Registration Statement") and
(iii) a registration statement on Form S-3 (No. 333-34841) [and pre-effective
amendment[s] no[s]. __________ thereto] which acts as a post-effective
-2-
<PAGE> 3
amendment to each of the First Registration Statement and the Second
Registration Statement, and pursuant to Rule 429 includes a combined prospectus
for use with the securities covered by the First Registration Statement and the
Second Registration Statement (the "Third Registration Statement"), for the
registration of the Securities and the Underlying Securities under the
Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof
from time to time in accordance with Rule 415 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations"), and the Company
has filed such post-effective amendments thereto as may be required prior to
the execution of the applicable Terms Agreement. Such registration statements
(as so amended, if applicable) have been declared effective by the Commission
and each Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act"). The First Registration Statement, the
Second Registration Statement and the Third Registration Statement (as so
amended, if applicable), including the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), are referred to herein as the "Registration Statements"; and the
final prospectus and the final prospectus supplement relating to the offering
of the Underwritten Securities, in the form first furnished to the Underwriters
by the Company for use in connection with the offering of the Underwritten
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statements" and the
"Prospectus" shall also be deemed to include all documents incorporated therein
by reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the execution of the applicable Terms Agreement;
provided, further, that if the Company files a registration statement with the
Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the "Rule 462
Registration Statement"), then, after such filing, all references to
"Registration Statements" shall also be deemed to include the Rule 462
Registration Statement; and provided, further, that if the Company elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary
prospectus and the applicable term sheet or abbreviated term sheet (the "Term
Sheet"), as the case may be, in the form first furnished to the Underwriters by
the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all
references in this Underwriting Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to
refer to any prospectus used before the registration statement became effective
and any prospectus that omitted, as applicable, the Rule 430A Information, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, that was used after such effectiveness and prior to the execution
and delivery of the applicable Terms Agreement. For purposes of this
Underwriting Agreement, all references to the Registration Statements,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration Statements,
Prospectus or preliminary prospectus shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in the Registration Statements, Prospectus or
preliminary prospectus, as the case may be; and all references in this
Underwriting Agreement to amendments or supplements to the Registration
Statements, Prospectus or preliminary prospectus shall be deemed to mean and
include the filing of any document under the 1934 Act which is incorporated by
reference in the Registration Statements, Prospectus or preliminary prospectus,
as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to Merrill Lynch, as of the date hereof, and to each
Underwriter named in the applicable Terms Agreement, as of the date thereof, as
of the Closing Time (as defined below) and, if applicable, as of each Date of
Delivery (as defined below) (in each case, a "Representation Date"), as
follows:
-3-
<PAGE> 4
(1) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each
of the Registration Statements and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statements 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. In addition, each
Indenture has been duly qualified under the 1939 Act.
At the respective times each Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto (including the filing of the Company's most recent Annual
Report on Form 10-K with the Commission (the "Annual Report on Form
10-K")) became effective and at each Representation Date, the
Registration Statements, any 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. At the date
of the Prospectus, at the Closing Time and at each Date of Delivery,
if any, the Prospectus and any amendments and supplements thereto did
not and will not include an untrue statement of a material fact or
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 the Company elects to rely upon Rule
434 of the 1933 Act Regulations, the Company will comply with the
requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
any statement contained in any Registration Statement or the
Prospectus 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 any Registration Statement or the
Prospectus.
Each preliminary prospectus and prospectus filed as part of
the Registration Statements 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 the offering
of Underwritten Securities will, at the time of such delivery, be
identical to any electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(2) Incorporated Documents. Since the end of its latest
fiscal year, the Company has filed all documents and amendments to
previously filed documents required to be filed by it pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act. The documents
incorporated or deemed to be incorporated by reference in the
Registration Statements and the Prospectus, when they became effective
or at the time they were or hereafter are filed with the Commission,
were and will be timely filed and otherwise 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") and, when read together with the other information in
the Prospectus, at the date of the Prospectus, at the Closing Time and
at each Date of Delivery, if any, did not and will not include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Copies of
each of the documents incorporated by reference in the Registration
Statements and the Prospectus prior to the date of this Underwriting
Agreement and any applicable Terms Agreement, together with
satisfactory evidence of the filing thereof, have been made available
to the Underwriters.
(3) Independent Accountants; Independent Petroleum Engineers.
The accountants who certified the financial statements and any
supporting schedules thereto included in the Registration Statements
and
-4-
<PAGE> 5
the Prospectus are independent public accountants as required by the
1933 Act and the 1933 Act Regulations. Ryder Scott Company, DeGolyer
and MacNaughton and Netherland, Sewell & Associates, Inc., information
derived from the reports of whom is set forth or incorporated by
reference in the Registration Statements and the Prospectus, were, as
of the date of each respective report, and are, as of the date hereof,
independent petroleum engineers with respect to the Company and its
subsidiaries.
(4) Financial Statements. The financial statements of the
Company included in the Registration Statements and the Prospectus,
together with the related schedules and notes, as well as those
financial statements, schedules and notes of any other entity included
therein, present fairly the financial position of the Company and its
consolidated subsidiaries, or such other entity, as the case may be,
at the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statements
and the Prospectus present fairly in accordance with GAAP 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 Statements and the Prospectus. In
addition, any pro forma financial statements of the Company and its
subsidiaries and the related notes thereto included in the
Registration Statements and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(5) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statements and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in, or any adverse
development that materially affects, the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries taken as a whole, whether or not
arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those arising 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 regular dividends on the Company's common stock or
preferred stock, in amounts per share that are consistent with past
practice or the applicable charter document or supplement thereto,
respectively, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a Texas corporation in good
standing under the laws of the State of Texas and has all corporate
power and authority necessary to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under, or as contemplated
under, this Underwriting Agreement and the applicable Terms Agreement.
The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other 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 so qualify or be in good standing could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(7) Good Standing of Subsidiaries. Each subsidiary of the
Company that is a corporation (a "Corporate Subsidiary") has been duly
incorporated and each subsidiary of the Company that is a partnership
(a "Partnership Subsidiary") has been duly organized and, in each
case, is validly existing in
-5-
<PAGE> 6
good standing under the laws of the jurisdiction of its incorporation
or organization, as applicable, has corporate or partnership power and
authority, as applicable, to own, lease and operate its properties and
to conduct its business as described in the Prospectus. Each
Corporate Subsidiary is duly qualified as a foreign corporation and
each Partnership Subsidiary that is a limited partnership is duly
registered, in each case, 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 so qualify or be in good
standing could not reasonably be expected, individually, or in the
aggregate, to have a Material Adverse Effect. All of the issued and
outstanding capital stock of each of the Corporate Subsidiaries has
been duly authorized and is validly issued, fully paid and
non-assessable, with no personal liability attaching to the ownership
thereof and, except as otherwise stated in the Registration Statements
and the Prospectus, all of such stock or other equity interests, as
the case may be, of each subsidiary of the Company are owned by the
Company, directly or indirectly, free and clear of any security
interest, mortgage, pledge, lien, charge, encumbrance, claim or
equity.
(8) Capitalization. If the Prospectus contains a
"Capitalization" section purporting to set forth the authorized,
issued and outstanding shares of capital stock of the Company, then
such information with respect to such shares is as set forth in the
column entitled "Actual" under such section (except for subsequent
issuances thereof, if any contemplated under this Underwriting
Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus). If
the Prospectus contains a "Capitalization" section purporting to set
forth the authorized, issued and outstanding shares of capital stock
of the Company as adjusted to give effect to the sale of Underwritten
Securities and the application of the net proceeds therefrom, then
such information with respect to such shares and such proceeds is as
set forth in the column entitled "Adjusted" under such section. All
issued and outstanding shares of capital stock of the Company have
been duly authorized and validly issued by the Company and are fully
paid and non-assessable with no personal liability attaching to the
ownership thereof, and none of such shares of capital stock was issued
in violation of preemptive or other similar rights of any
securityholder of the Company.
(9) Authorization of this Underwriting Agreement and Terms
Agreement. This Underwriting Agreement has been, and the applicable
Terms Agreement as of the date thereof will have been, duly
authorized, executed and delivered by the Company and constitute valid
and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as rights to
indemnity and contribution hereunder and thereunder may be limited by
federal or state securities laws or the public policy underlying such
laws, and except as enforceability may be limited by applicable
bankruptcy, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or
at law).
(10) Authorization of Common Stock. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
include Common Stock, such Underwritten Securities have been, or as of
the date of such Terms Agreement will have been, duly authorized by
the Company for issuance and sale pursuant to this Underwriting
Agreement and such Terms Agreement. Such Underwritten Securities,
when issued and delivered by the Company pursuant to this Underwriting
Agreement and such Terms Agreement against payment of the
consideration therefor specified in such Terms Agreement, will be
validly issued, fully paid and non-assessable and will not be subject
to preemptive or other similar rights of any securityholder of the
Company. No holder of such Underwritten Securities is or will be
subject to personal liability by reason of being such a holder.
(11) Authorization of Preferred Stock and/or Depositary
Shares. If the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Preferred Stock and/or Depositary
Shares, such Underwritten Securities have been, or as of the date of
such Terms Agreement will have been, duly
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<PAGE> 7
authorized by the Company for issuance and sale pursuant to this
Underwriting Agreement and such Terms Agreement. The applicable
Preferred Stock, when issued and delivered by the Company pursuant to
this Underwriting Agreement and such Terms Agreement against payment
of the consideration therefor, or for the related Depositary Shares,
as the case may be, specified in such Terms Agreement, will be validly
issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the
Company. In addition, upon deposit by the Company of any Preferred
Stock represented by Depositary Shares with the applicable Depositary
and the execution and delivery by such Depositary of the Depositary
Receipts evidencing such Depositary Shares, in each case pursuant to
the applicable Deposit Agreement, such Depositary Shares will
represent legal and valid interests in such Preferred Stock. No
holder of such Preferred Stock or Depositary Receipts evidencing
Depositary Shares is or will be subject to personal liability by
reason of being such a holder. The applicable Certificate of
Designations will be in full force and effect prior to the Closing
Time.
(12) Authorization of Deposit Agreement. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
include Depositary Shares or if Debt Securities are convertible into
Depositary Shares representing Preferred Stock, the applicable Deposit
Agreement has been, or prior to the issuance of such Depositary Shares
will have been, duly authorized, executed and delivered by the Company
and, upon such authorization, execution and delivery, will constitute
a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
Each registered holder of a Depositary Receipt under the applicable
Deposit Agreement will be entitled to the proportional rights,
preferences and limitations of the Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipt and to such
other rights as are granted to such registered holder in such Deposit
Agreement.
(13) Authorization of Senior Debt Securities and/or
Subordinated Debt Securities. If the Underwritten Securities being
sold pursuant to the applicable Terms Agreement include Senior Debt
Securities and/or Subordinated Debt Securities, such Underwritten
Securities have been, or as of the date of such Terms Agreement will
have been, duly authorized by the Company for issuance and sale
pursuant to this Underwriting Agreement and such Terms Agreement.
Such Underwritten Securities, when issued and authenticated in the
manner provided for in the applicable Indenture and delivered against
payment of the consideration therefor specified in such Terms
Agreement, will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by
proceedings in equity or at law), and except further as enforcement
thereof may be limited by (A) requirements that a claim with respect
to any Debt Securities denominated other than in U.S. dollars (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (B) governmental authority to
limit, delay or prohibit the making of payments outside the United
States. Such Underwritten Securities will be in the form contemplated
by, and each registered holder thereof is entitled to the benefits of,
the applicable Indenture.
(14) Authorization of the Indentures. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
include Senior Debt Securities and/or Subordinated Debt Securities or
if Preferred Stock is, or Depositary Shares representing Preferred
Stock are, convertible into Debt Securities, each applicable Indenture
has been, or prior to the issuance of the Debt Securities thereunder
will have been, duly authorized, executed and delivered by the Company
and, upon such authorization, execution and delivery, will constitute
a valid and legally binding agreement of the Company, enforceable
against the
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<PAGE> 8
Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors'
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(15) Authorization of Warrants. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
include Warrants, such Underwritten Securities have been, or as of the
date of such Terms Agreement will have been, duly authorized by the
Company for issuance and sale pursuant to this Underwriting Agreement
and such Terms Agreement. Such Underwritten Securities, when issued
and authenticated in the manner provided for the applicable Warrant
Agreement and delivered against payment of the consideration therefor
specified in such Terms Agreement, will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided
by such Warrant Agreement and enforceable against the Company in
accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
(16) Authorization of Warrant Agreement. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
include Warrants, each applicable Warrant Agreement has been, or prior
to the issuance of such Underwritten Securities will have been, duly
authorized, executed and delivered by the Company and, upon such
authorization, execution and delivery, will constitute a valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors'
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(17) Authorization of Underlying Securities. If the
Underlying Securities related to the Underwritten Securities being
sold pursuant to the applicable Terms Agreement include Common Stock,
Preferred Stock or Depositary Shares, such Underlying Securities have
been, or as of the date of such Terms Agreement will have been, duly
authorized and reserved for issuance by the Company upon exercise of
the Common Stock Warrants or Preferred Stock Warrants, as applicable,
or upon conversion of the related Preferred Stock, Depositary Shares,
Senior Debt Securities or Subordinated Debt Securities, as applicable.
If the Underlying Securities include Common Stock or Preferred Stock,
such Underlying Securities, when issued upon such exercise or
conversion, as applicable, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights of any securityholder of the Company. If the Underlying
Securities include Depositary Shares, such Underlying Securities, upon
deposit by the Company of the Preferred Stock represented thereby with
the applicable Depositary and the execution and delivery by such
Depositary of the Depositary Receipts evidencing such Depositary
Shares, in each case pursuant to the applicable Deposit Agreement,
will represent legal and valid interests in such Preferred Stock. No
holder of such Common Stock, Preferred Stock or Depositary Receipts
evidencing Depository Shares is or will be subject to personal
liability by reason of being such a holder. If the Underlying
Securities related to the Underwritten Securities being sold pursuant
to the applicable Terms Agreement include Senior Debt Securities
and/or Subordinated Debt Securities, such Underlying Securities have
been, or as of the date of such Terms Agreement will have been, duly
authorized for issuance by the Company upon the exercise of the Debt
Security Warrants or upon conversion of the related Preferred Stock or
Depositary Shares, as applicable. Such Underlying Securities, when
issued and authenticated in the manner provided for in the applicable
Indenture and delivered in accordance with the terms of the Debt
Security Warrants or the related Preferred Stock or Depositary Shares,
as applicable, will constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought
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<PAGE> 9
by proceedings in equity or at law), and except further as enforcement
thereof may be limited by (A) requirements that a claim with respect
to any Debt Securities denominated other than in U.S. dollars (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (B) governmental authority to
limit, delay or prohibit the making of payments outside the United
States.
(18) Descriptions of the Underwritten Securities, Underlying
Securities, Indentures, Deposit Agreement and Warrant Agreement. The
Underwritten Securities being sold pursuant to the applicable Terms
Agreement and each applicable Indenture, Deposit Agreement and Warrant
Agreement, as of the date of the Prospectus, and any Underlying
Securities, when issued and delivered in accordance with the terms of
the related Underwritten Securities, will conform in all material
respects to the statements relating thereto contained in the
Prospectus and will be in substantially the form filed or incorporated
by reference, as the case may be, as an exhibit to the Registration
Statement.
(19) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its articles or
certificate of incorporation or by-laws (or partnership agreement, in
the case of Partnership Subsidiaries) or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or 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 (collectively,
"Agreements and Instruments"), except for such defaults or violations
the effect of which could not be reasonably expected, individually or
in the aggregate, to have a Material Adverse Effect. The execution,
delivery and performance of this Underwriting Agreement, the
applicable Terms Agreement and each applicable Indenture, Warrant
Agreement and Deposit Agreement and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated hereby or thereby or
in the Registration Statements and the Prospectus, and the
consummation of the transactions contemplated herein and in the
Registration Statements and the Prospectus (including the issuance and
sale of the Underwritten Securities and the use of the proceeds from
the sale of the Underwritten Securities as described under the caption
"Use of Proceeds") and compliance by the Company with its obligations
hereunder and thereunder, have been duly authorized by all necessary
corporate action and do not and will not (except as disclosed in the
Registration Statements and the Prospectus), whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, properties or operations of the
Company or any of its subsidiaries pursuant to the terms of any
Agreements and Instruments (except for such conflicts, breaches,
defaults, events or liens, charges or encumbrances that would not
result in a Material Adverse Effect) nor will such action result in
any violation of the articles or certificate of incorporation or
by-laws of the Company or any of its subsidiaries or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality (including the Alaska Public
Utilities Commission) or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries (or
partnership agreement, in the case of Partnership Subsidiaries) or any
of their assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(20) Absence of Proceedings. Except as set forth in the
Registration Statements or the Prospectus, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any of its subsidiaries which is required to be disclosed
in the Registration
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<PAGE> 10
Statements and the Prospectus, or which might reasonably be expected
to result in a Material Adverse Effect or which might reasonably be
expected to materially and adversely affect the assets, properties or
operations thereof or the consummation of the transactions
contemplated under this Underwriting Agreement, the applicable Terms
Agreement or any applicable Indenture, Warrant Agreement or Deposit
Agreement or the performance by the Company of its obligations
hereunder and thereunder. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their respective assets,
properties or operations is the subject which are not described in the
Registration Statements and the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(21) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statements, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(22) Absence of Further Requirements. Except as required by
the 1933 Act, the 1934 Act and applicable state or foreign securities
laws, except for the qualification of each applicable Indenture under
the Trust Indenture Act, and except such as already have been
obtained, no filing with, or authorization, approval, consent,
license, order registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or
required for the execution, delivery and performance by the Company of
this Underwriting Agreement or the applicable Terms Agreement or in
connection with the transactions contemplated under this Underwriting
Agreement, such Terms Agreement or any applicable Indenture, Deposit
Agreement or Warrant Agreement.
(23) Possession of Licenses and Permits. The Company and
each of its subsidiaries possess such permits, licenses, franchises,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to own, lease
and operate their respective properties and to conduct the business
now operated by them, except where the failure to so possess would
not, singly or in the aggregate, result in a Material Adverse Effect.
The Company and each of its subsidiaries have fulfilled and performed
and are in compliance with the material terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, result in a Material Adverse
Effect. All of the Governmental Licenses are valid and in full force
and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and
effect would not result in a Material Adverse Effect, and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Government License,
except where such revocation, termination or other impairment would
not, singly or in the aggregate, result in a Material Adverse Effect.
(24) Title to Property. The Company and each of its
subsidiaries owns or has valid rights to use all items of real and
personal property which are material to the business of the Company
and its subsidiaries, taken as a whole, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind which could reasonably be
expected to have a Material Adverse Effect. All oil and gas leases to
which the Company or any of its subsidiaries is a party are in full
force and effect, and no default has occurred or is continuing
thereunder which could reasonably be expected to have a Material
Adverse Effect.
(25) Investment Company Act; Public Utility Holding Company
Act. The Company is not, and upon the issuance and sale of the
Underwritten Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be,
an "investment company" within the
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<PAGE> 11
meaning of the Investment Company Act of 1940, as amended or a
"holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or the rules or regulations
thereunder.
(26) Environmental Laws. Except as otherwise stated in the
Registration Statements and the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof including any judicial or administrative order, consent,
decree or judgment which violation could reasonably be expected to
have a Material Adverse Effect. In the ordinary course of its
business, the Company conducts a periodic review of the effect of any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws") on the business, operations and properties of the Company and
its subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such
review, the Company has concluded that, except as set forth in the
Registration Statements or in the Prospectus, such associated costs
and liabilities could not reasonably be expected to, singly or in the
aggregate, have a Material Adverse Effect.
(27) Registration Rights. There are no contracts, agreements
or understandings between the Company and any person granting such
person the right to require the Company to include such securities in
the securities registered pursuant to the Registration Statements.
(28) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder, or is exempt therefrom.
(b) Officers' Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries on behalf of the Company or any such
subsidiary and delivered to any Underwriter or to counsel for the Underwriters
in connection with the offering of the Underwritten Securities shall be deemed
a representation and warranty by the Company to each Underwriter as to the
matters covered thereby on the date of such certificate.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Underwritten Securities. The several commitments of the
Underwriters to purchase the Underwritten Securities pursuant to the applicable
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and shall be subject to the
terms and conditions herein set forth.
(b) Option Underwritten Securities. In addition, subject to the
terms and conditions herein set forth, the Company may grant, if so provided in
the applicable Terms Agreement, an option to the Underwriters, severally and
not jointly, to purchase up to the number or aggregate principal amount, as the
case may be, of the Option Underwritten Securities set forth therein at a price
per Option Underwritten Security equal to the price per Initial Underwritten
Security, less an amount equal to any dividends or distributions declared by
the Company and paid or payable on the Initial Underwritten Securities but not
payable on the Option Underwritten Securities. Such option, if granted, will
expire 30 days after the date of such Terms Agreement, and may be exercised in
whole or in part at one time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Underwritten Securities upon notice by Merrill Lynch to the Company
setting forth the number or aggregate principal amount, as the case may be, of
Option Underwritten Securities as to which the several Underwriters are then
exercising the option and the time, date and place of payment and delivery for
such Option
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<PAGE> 12
Underwritten Securities. Such time and date of payment and delivery ("Date of
Delivery") shall be determined by Merrill Lynch, but shall not be later than
seven full business days after the exercise of said option, nor in any event
prior to the Closing Time, unless otherwise agreed upon by Merrill Lynch and
the Company. If the option is exercised as to all or any portion of the Option
Underwritten Securities, each of the Underwriters, severally and not jointly,
will purchase that proportion of the total number or aggregate principal
amount, as the case may be, of Option Underwritten Securities then being
purchased which the number or aggregate principal amount, as the case may be,
of Initial Underwritten Securities each such Underwriter has severally agreed
to purchase as set forth in such Terms Agreement bears to the total number or
aggregate principal amount, as the case may be, of Initial Underwritten
Securities, subject to such adjustments as Merrill Lynch in its discretion
shall make to eliminate any sales or purchases of a fractional number or
aggregate principal amount, as the case may be, of Option Underwritten
Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the offices of Vinson & Elkins
L.L.P., 2300 First City Tower, Houston, Texas 77002, or at such other place as
shall be agreed upon by Merrill Lynch and the Company, at 10:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern
time) on any given day) business day after the date of the applicable Terms
Agreement (unless postponed in accordance with the provisions of Section 10
hereof), or such other time not later than ten business days after such date as
shall be agreed upon by Merrill Lynch and the Company (such time and date of
payment and delivery being herein called "Closing Time"). In addition, in the
event that the Underwriters have exercised their option, if any, to purchase
any or all of the Option Underwritten Securities, payment of the purchase price
for, and delivery of such Option Underwritten Securities, shall be made at the
above-mentioned offices of Vinson & Elkins L.L.P., 2300 First City Tower,
Houston, Texas 77002, or at such other place as shall be agreed upon by Merrill
Lynch and the Company, on the relevant Date of Delivery as specified in the
notice from Merrill Lynch to the Company.
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 Merrill Lynch for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Underwritten
Securities which it has severally 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 Underwritten
Securities to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. The Underwritten Securities,
certificates for the Underwritten Securities or Depositary Receipts evidencing
the Depositary Shares, as applicable, shall be in such denominations and
registered in such names as Merrill Lynch may request in writing at least one
full business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be. The Underwritten Securities, certificates for the
Underwritten Securities or Depositary Receipts evidencing the Depositary
Shares, as applicable, will be made available for examination and packaging by
Merrill Lynch in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
Merrill Lynch and with each Underwriter participating in the offering of
Underwritten Securities, 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 of the 1933 Act Regulations and/or Rule 434
of the 1933 Act Regulations, if and as applicable, and will notify the
Representative(s) and/or counsel for the Underwriters immediately, and
confirm the notice in writing, of (i) the effectiveness of any post-
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effective amendment to the Registration Statements or the filing of
any supplement or amendment to the Prospectus, (ii) the receipt of any
comments from the Commission, (iii) any request by the Commission for
any amendment to the Registration Statements or any amendment or
supplement to the Prospectus or for additional information with
respect thereto, and (iv) the issuance by the Commission of any stop
order suspending the effectiveness of any Registration Statement or of
any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the
Underwritten 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 file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (2) (or, if applicable
and if consented to by you, subparagraph (5)) of Rule 424(b) not later
than the second business day following the execution and delivery of
any Terms Agreement and otherwise will promptly effect the filings
necessary pursuant to Rule 424 and will take such steps as it deems
necessary to ascertain and notify the Representative(s) (and to
confirm such notification in writing if requested by the
Representative(s)) promptly whether the Prospectus transmitted for
filing under Rule 424 was received for filing by the Commission and,
in the event that it was not, it will promptly file the 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 as soon as possible.
(b) Filing of Amendments. For as long as a Prospectus is
required to be delivered with respect to an offering of Underwritten
Securities hereunder, the Company will give Merrill Lynch notice of
its intention to file or prepare any amendment to the Registration
Statements (including any filing under Rule 462(b) of the 1933 Act
Regulations), 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 (including by filing any documents
that would be incorporated by reference), will furnish Merrill Lynch
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 amendment, supplement or revision to which Merrill Lynch
or counsel for the Underwriters shall reasonably object in writing.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to Merrill Lynch and counsel for the
Underwriters, without charge, [FIVE SIGNED] copies of the Registration
Statements 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, as requested, will also deliver to
Merrill Lynch, without charge, a sufficient number of conformed copies
of the Registration Statements as originally filed and of each
amendment thereto (without exhibits) for distribution of a copy to
each of the other Underwriters. Copies of the Registration Statements
and each amendment thereto furnished to the Underwriters will be
identical to any 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 will deliver to
each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter may reasonably request, 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 (or, if applicable, of the Prospectus as amended or
supplemented after the effective date of the Third Registration
Statement) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to
the extent permitted by Regulation S-T.
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<PAGE> 14
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the
1934 Act and the 1934 Act Regulations so as to permit the completion
of the distribution of the Underwritten Securities as contemplated in
this Underwriting Agreement and the applicable Terms Agreement and in
the Registration Statements and the Prospectus. If at any time when
the Prospectus is required by the 1933 Act or the 1934 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 opinion of counsel for the Underwriters or for the Company, to
amend any Registration Statement in order that such Registration
Statement 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 or to amend or
supplement the Prospectus in order that the Prospectus will not
include an untrue statement 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
opinion of such counsel, at any such time to amend any Registration
Statement or amend or supplement the Prospectus in order to comply
with any law, the Company will notify the Representative(s) promptly
(and if requested by the Representative(s), confirm such notice in
writing) and 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 such
Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters,
without charge, such number of copies of such amendment or supplement
as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the
Underwritten Securities and any related Underlying Securities for
offering and sale under the applicable securities laws of such states
and other jurisdictions (domestic or foreign) as Merrill Lynch may
designate and to maintain such qualifications in effect as long as
required for the distribution of such Securities; provided, however,
that the Company shall not be obligated to consent to service of
process (except service of process with respect to the offering and
sale of such Securities) 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 Underwritten Securities or any
related Underlying Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect as long as
required for the distribution of such Securities and to advise the
Underwriters promptly of the receipt by the Company of any
notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(g) Earnings Statement. The Company will make generally
available to its securityholders an earnings statement of the Company
for the purposes of, and to provide the benefits contemplated by, the
last paragraph of Section 11(a) of the 1933 Act covering a period of
12 months beginning after the effective date of the Third Registration
Statement, as soon as is reasonably practicable after the termination
of such 12-month period but not later than 90 days after such
termination.
(h) Reservation of Securities. If the applicable Terms
Agreement specifies that any related Underlying Securities include
Common Stock, Preferred Stock and/or Depositary Shares, the Company
will reserve and keep available at all times, free of preemptive or
other similar rights, a sufficient number of shares of Common Stock
and/or Preferred Stock, as applicable, for the purpose of enabling the
Company to satisfy any obligations to issue such Underlying Securities
upon exercise of the related Warrants, as applicable, or upon
conversion of the Preferred Stock, Depositary Shares, Senior Debt
Securities or Subordinated Debt Securities, as applicable.
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(i) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Underwritten Securities in the
manner specified in the Prospectus under "Use of Proceeds".
(j) Listing. The Company will use its best efforts to effect
the listing of the Underwritten Securities and any related Underlying
Securities, prior to the Closing Time, on any national securities
exchange or quotation system if and as specified in the applicable
Terms Agreement.
(k) Restriction on Sale of Securities. Between the date of
the applicable Terms Agreement and the Closing Time or such other date
specified in such Terms Agreement, the Company will not, without the
prior written consent of Merrill Lynch, directly or indirectly, issue,
sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, the securities specified in such Terms Agreement.
(l) 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 (and any amendments to
previously filed 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. The Company also will, upon
request, furnish to Merrill Lynch and each of the other Underwriters
for a period of five years from the date of this Agreement (i) copies
of any reports or other communications which the Company shall send to
its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar form as may be designated by the Commission, and (iii) such
other non-confidential information as the Underwriters may reasonably
request regarding the Company or its subsidiaries.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay
all expenses incident to the performance of its obligations under this
Underwriting Agreement or the applicable Terms Agreement, including (i) the
preparation, printing and filing of the Registration Statements (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of
this Underwriting Agreement, any Terms Agreement, any Agreement among
Underwriters, the Indentures, any Deposit Agreement, any Warrant Agreement and
such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Underwritten Securities or any
related Underlying Securities, (iii) the preparation, issuance and delivery of
the Underwritten Securities and any related Underlying Securities, any
certificates for the Underwritten Securities or such Underlying Securities or
Depositary Receipts evidencing the Depositary Shares, as applicable, to the
Underwriters, including any transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Underwritten Securities to
the Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents (including transfer agents and
registrars), as well as the fees and disbursements of the Trustees, any
Depositary and any Warrant Agent, and their respective counsel, (v) the
qualification of the Underwritten Securities and any related Underlying
Securities under state 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, printing and delivery of the Blue Sky Survey
and any Legal Investment Survey, and any amendment thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheet, and the Prospectus and any amendments or supplements thereto, (vii)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Underwritten Securities and any related Underlying
Securities, if applicable, (viii) the fees and expenses incurred with respect
to the listing of the Underwritten Securities and any related Underlying
Securities, if applicable, (ix) the filing fees incident to the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Underwritten Securities and any related Underlying
Securities, and (x) the fees and expenses of any Underwriter acting in the
capacity of a "qualified independent underwriter" (as defined in Section 2(l)
of Schedule E of the bylaws of the NASD), if applicable. Notwithstanding the
foregoing, except as expressly provided in clause (v) above or by Section 4(b),
all legal fees and disbursements of counsel to the Underwriters shall be the
sole responsibility of the Underwriters.
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<PAGE> 16
(b) Termination of Agreement. If the applicable Terms Agreement is
terminated by Merrill Lynch in accordance with the provisions of Section 5 or
Section 9(b)(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 Underwriters to purchase and pay for the Underwritten Securities
pursuant to the applicable Terms Agreement 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 or any of its subsidiaries
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 Statements. The
Registration Statements, including any Rule 462(b) Registration
Statement, have become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statements shall have
been issued under the 1933 Act and no proceedings for that purpose
shall have been initiated or be pending 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
information relating to the description of the Underwritten Securities
and any related Underlying Securities, the specific method of
distribution and similar matters shall have been filed with the
Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as
applicable (or any required 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 of the 1933 Act Regulations, a Term Sheet including
the Rule 434 Information shall have been filed with the Commission in
accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, Merrill
Lynch shall have received the favorable opinion, dated as of Closing
Time, of Vinson & Elkins L.L.P., counsel for the Company (or other
counsel acceptable to the Underwriters), in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters,
to the effect set forth in Exhibit B hereto and to such further effect
as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time,
Merrill Lynch shall have received the favorable opinion, dated as of
Closing Time, of Simpson Thacher & Bartlett (a partnership which
includes professional corporations), counsel for the Underwriters (or
other counsel acceptable to the Underwriters), together with signed or
reproduced copies of such letter for each of the other Underwriters,
with respect to certain matters. In giving such opinion, such counsel
may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York, the federal law of the
United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to Merrill Lynch.
Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not
have been, since the date of the applicable Terms Agreement or since
the respective dates as of which information is given in the
Prospectus, any material adverse change, or any adverse development
that materially affects the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, and Merrill Lynch shall have received a
certificate of the President or a Vice President of the Company and of
the chief financial officer 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 are true and correct with the same force and
effect as though expressly made at and as of the Closing Time,
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<PAGE> 17
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of
any of the Registration Statements has been issued and no proceedings
for that purpose have been initiated or threatened by the Commission.
(e) Accountant's Comfort Letter. At the time of the
execution of the applicable Terms Agreement, Merrill Lynch shall have
received from KPMG Peat Marwick LLP (or such other accountants
reasonably acceptable to the Underwriters) a letter dated such date,
in form and substance satisfactory to Merrill Lynch, 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 Statements and the
Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, Merrill
Lynch shall have received from KPMG Peat Marwick LLP (or such other
accountants reasonably acceptable to the Underwriters) a letter, dated
as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (e) of this
Section 5, except that the specified date referred to shall be a date
not more than three business days prior to the Closing Time.
(g) Ratings. At Closing Time and at any relevant Date of
Delivery, the Underwritten Securities shall have the ratings accorded
by any "nationally recognized statistical rating organization", as
defined by the Commission for purposes of Rule 436(g)(2) of the 1933
Act Regulations, if and as specified in the applicable Terms
Agreement, and the Company shall have delivered to Merrill Lynch a
letter, dated as of such date, from each such rating organization, or
other evidence satisfactory to Merrill Lynch, confirming that the
Underwritten Securities have such ratings. Since the time of
execution of such Terms Agreement, there shall not have occurred a
downgrading in the rating assigned to the Underwritten Securities, if
applicable, or any of the Company's other securities by any such
rating organization, and no such rating organization shall have
publicly announced that it has under surveillance or review its rating
of the Underwritten Securities or any of the Company's other
securities.
(h) Approval of Listing. At Closing Time, the
Underwritten Securities shall have been approved for listing, subject
only to official notice of issuance, if and as specified in the
applicable Terms Agreement.
(i) No Objection. If the Registration Statement or
an offering of Underwritten Securities has been filed with the NASD
for review, the NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and
arrangements.
(j) Lock-up Agreements. On the date of the
applicable Terms Agreement, Merrill Lynch shall have received, in form
and substance satisfactory to it, each lock-up agreement, if any,
specified in such Terms Agreement as being required to be delivered by
the persons listed therein.
(k) Over-Allotment Option. In the event that the
Underwriters are granted an over-allotment option by the Company in
the applicable Terms Agreement and the Underwriters exercise their
option to purchase all or any portion of the Option Underwritten
Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by
the Company or any of its subsidiaries hereunder shall be true and
correct as of each Date of Delivery, and, at the relevant Date of
Delivery, Merrill Lynch shall have received:
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<PAGE> 18
(1) A certificate, dated such Date of Delivery, of the
President or a Vice President of the Company and the chief
financial officer or chief accounting officer of the Company,
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
(2) The favorable opinion of Vinson & Elkins L.L.P., counsel
for the Company (or other counsel acceptable to the Underwriters),
in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
(3) The favorable opinion of Simpson Thacher & Bartlett (a
partnership which includes professional corporations), counsel for
the Underwriters (or other counsel acceptable to the
Underwriters), dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(4) A letter from KPMG Peat Marwick LLP (or such other
accountants reasonably acceptable to the Underwriters), in form
and substance satisfactory to Merrill Lynch and dated such Date of
Delivery, substantially in the same form and substance as the
letter furnished to Merrill Lynch pursuant to Section 5(f) hereof,
except that the "specified date" on the letter furnished pursuant
to this paragraph shall be a date not more than three business
days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, 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
Underwritten 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 Underwritten Securities as herein contemplated shall be
reasonably satisfactory in form and substance to Merrill Lynch and
counsel for the Underwriters.
(m) Termination of Terms Agreement. If any condition specified
in this Section 5 shall not have been fulfilled when and as required to
be fulfilled, the applicable Terms Agreement (or, with respect to the
Underwriters' exercise of any applicable over-allotment option for the
purchase of Option Underwritten Securities on a Date of Delivery after
the Closing Time, the obligations of the Underwriters to purchase the
Option Underwritten Securities on such Date of Delivery) may be
terminated by Merrill Lynch by notice to the Company at any time at or
prior to the Closing Time (or such Date of Delivery, as applicable),
and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 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:
(1) 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 Statements (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information deemed to be a part
thereof, 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 included in
any preliminary prospectus
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<PAGE> 19
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;
(2) 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
(3) against any and all expense whatsoever, as incurred
(including 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 any
Underwriter through Merrill Lynch expressly for use in the Registration
Statements (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). The foregoing indemnity with respect to any untrue statement or
alleged untrue statement contained in or omission or alleged omission 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
loss, liability, claim, damage or expense purchased any of the Underwritten
Securities which are the subject thereof if the Company sustains the burden of
proving that (i) such person was not sent or given a copy of the Prospectus (or
the Prospectus as amended or supplemented), excluding documents incorporated by
reference therein, at or prior to the written confirmation of sale of such
Underwritten Securities to such person and (ii) the untrue statement contained
in or omission from such preliminary prospectus was corrected in the Prospectus
(or the Prospectus as amended or supplemented) and the Company had previously
furnished copies thereof to such Underwriter.
(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 Statements, 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 Statements (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, 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 by such Underwriter through Merrill Lynch
expressly for use in the Registration Statements (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(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
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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. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. 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 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 (A) to the extent it considers such request to be reasonable, reimbursed
such indemnified party in accordance with such request, and (B) to the extent
it does not consider such request to be reasonable, provided written notice to
the indemnified party to that effect explaining the reasons therefor, 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 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 Underwritten Securities pursuant to the applicable Terms
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
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the 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 such Underwritten 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
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<PAGE> 21
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 Underwritten 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 number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities set forth opposite their respective names in
the applicable Terms Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement or in certificates of
officers of the Company submitted pursuant hereto or thereto 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 and payment for the Underwritten
Securities.
SECTION 9. Termination.
(a) Underwriting Agreement. This Underwriting Agreement (excluding
the applicable Terms Agreement) may be terminated for any reason at any time by
the Company or by Merrill Lynch upon the giving of written notice of such
termination to the other party hereto.
(b) Terms Agreement. Merrill Lynch may terminate the applicable
Terms Agreement, by notice to the Company, at any time at or prior to the
Closing Time or any relevant Date of Delivery, if, since the time of execution
of such Terms Agreement, (i) there has been, since the respective dates as of
which information is given in the Prospectus, any material adverse change in,
or any adverse development that materially affects, the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or, if the Underwritten
Securities or any related Underlying Securities include Debt Securities
denominated or payable in, or indexed to, one or more foreign or
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<PAGE> 22
composite currencies, in the international financial markets, or any outbreak
of hostilities or escalation thereof or other calamity or crisis or any change
or development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which
is such as to make it, in the judgment of Merrill Lynch, impracticable to
market the Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities, or (iii) trading in any securities of the Company has
been suspended or limited by the Commission or the New York Stock Exchange, or
if trading generally on the New York Stock Exchange or the American 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 either of said exchanges or by order
of the Commission, the NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by either Federal or New York authorities
or, if the Underwritten Securities or any related Underlying Securities include
Debt Securities denominated or payable in, or indexed to, one or more foreign
or composite currencies, by the relevant authorities in the related foreign
country or countries.
(c) Liabilities. If this Underwriting Agreement or the applicable
Terms Agreement is terminated pursuant to this Section 9, 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 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 the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Underwritten Securities which it
or they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), then Merrill Lynch 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, Merrill Lynch shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may
be, of Defaulted Securities does not exceed 10% of the number or
aggregate principal amount, as the case may be, of Underwritten
Securities to be purchased on such date pursuant to such Terms
Agreement, 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 under such
Terms Agreement bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the
case may be, of Defaulted Securities exceeds 10% of the number or
aggregate principal amount, as the case may be, of Underwritten
Securities to be purchased on such date pursuant to such Terms
Agreement, such Terms Agreement (or, with respect to the Underwriters'
exercise of any applicable over-allotment option for the purchase of
Option Underwritten Securities on a Date of Delivery after the Closing
Time, the obligations of the Underwriters to purchase, and the Company
to sell, such Option Underwritten Securities on such Date of Delivery)
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Underwritten
Securities, as the case may be, either Merrill Lynch or the Company shall have
the right to postpone the Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any
other documents or arrangements.
-22-
<PAGE> 23
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 Merrill Lynch at 1221 McKinney, Suite 2700,
Houston, Texas 77010, attention of Alan J. Blackburn, Director, and notices to
the Company shall be directed to it at 1001 Fannin, Suite 1700, Houston, Texas
77002-6714, attention of William L. Transier, Senior Vice President and Chief
Financial Officer.
SECTION 12. Parties. This Underwriting Agreement and the applicable
Terms Agreement shall each inure to the benefit of and be binding upon the
Company, Merrill Lynch and, upon execution of such Terms Agreement, any other
Underwriters and their respective successors. Nothing expressed or mentioned
in this Underwriting Agreement or such Terms 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 Underwriting Agreement or such Terms Agreement or any
provision herein or therein contained. This Underwriting Agreement and such
Terms Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the parties hereto and
thereto and their respective successors, and said 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 Underwritten
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND
ANY APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. 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.
SECTION 15. Counterparts. This Underwriting Agreement and any Terms
Agreement may be executed in multiple counterparts, each of which taken
together shall constitute one and the same instrument.
-23-
<PAGE> 24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this Underwriting Agreement, along with all counterparts, will become
a binding agreement between Merrill Lynch and the Company in accordance with
its terms.
Very truly yours,
SEAGULL ENERGY CORPORATION
By:
--------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------
Authorized Signatory
-24-
<PAGE> 25
Exhibit A
SEAGULL ENERGY CORPORATION
(a Texas corporation)
[Type(s) of Underwritten Securities]
TERMS AGREEMENT
[Date]
To: Seagull Energy Corporation
1001 Fannin, Suite 1700
Houston, Texas 77002-6714
Attn: [ ]
Ladies and Gentlemen:
We understand that Seagull Energy Corporation, a Texas corporation (the
"Company"), proposes to issue and sell [ shares of its common stock, par value
$0.10 per share (the "Common Stock")] [ shares of its preferred
stock, par value $1.00 per share (the "Preferred Stock")] [in the form of
depositary shares (the "Depositary Shares") each representing of a share
of Preferred Stock] [$ aggregate principal amount of its [unsecured
senior] [unsecured senior subordinated] debt securities (the "Debt
Securities")] [ warrants (the "Common Stock Warrants") to purchase
common stock, par value $0.10 per share] [ warrants (the "Preferred
Stock Warrants") to purchase preferred stock, par value $1.00 per share [
warrants (the "Depositary Shares Warrants" to purchase Depositary Shares] [
warrants (the "Debt Security Warrants") to purchase $
aggregate principal amount of [unsecured senior] [senior subordinated] debt
securities] ([such securities also being hereinafter referred to as] the
"[Initial] Underwritten Securities"). Subject to the terms and conditions set
forth or incorporated by reference herein, we [the underwriters named below
(the "Underwriters")] offer to purchase [, severally and not jointly,] the
[[number] [principal] [amount] of] Underwritten Securities [opposite their
names set forth below] at the purchase price set forth below [, and a
proportionate share of Option Underwritten Securities set forth below, to the
extent any are purchased].
[Number]
[Principal Amount]
Underwriter of [Initial] Underwritten
Securities
________________
Total [$]
===========
A-1
<PAGE> 26
The Underwritten Securities shall have the following terms:
[Common Stock]
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions:
Closing date and location:
[Preferred Stock]
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Lock-up provisions:
Initial public offering price per share: $___ plus accumulated dividends, if
any, from _____
Purchase price per share: $___ plus accumulated dividends, if any, from _____
Other terms and conditions:
Closing date and location:
[Depositary Shares]
Title:
Fractional amount of Preferred Stock represented by each Depositary Share:
Ratings:
Rank:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share:
Dividend payment dates:
Liquidation preference per share:
Redemption provisions:
A-2
<PAGE> 27
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Lock-up provisions:
Initial public offering price per share: $____ plus accumulated dividends, if
any, from ___
Purchase price per share: $____ plus accumulated dividends, if any, from ___
Other terms and conditions:
Closing date and location:
[Debt Securities]
Title:
Rank:
Ratings:
Aggregate principal amount:
Denominations:
Currency of payment:
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
If Fixed Price Offering, initial public offering price per share:
% of the principal amount, plus accrued interest [amortized original
issue discount], if any, from _________________.
Purchase price per share: ___% of principal amount, plus accrued interest
[amortized original issue discount], if any, from _________________.
Form:
Other terms and conditions:
Closing date and location:
[Common Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrants
Title:
Type:
Number:
Warrant Agent:
Issuable jointly with [Common Stock] [Preferred Stock] [Depositary Share] [Debt
Securities]: [Yes] [No]
Number of [Common Stock] [Preferred Stock] [Depositary Share] [Debt Security]
Warrants issued with each [share of Common Stock] [share of Preferred Stock]
[Depositary Share] [$__________ principal amount of Debt Securities]:
Date(s) from which or period(s) during which [Common Stock] [Preferred Stock]
[Depositary Share] [Debt Security] Warrants are exercisable:
Date(s) on which [Common Stock] [Preferred Stock] [Depositary Share] [Debt
Security] Warrants expire:
Exercise price(s):
Initial public offering price: $
A-3
<PAGE> 28
Purchase price: $
Title of Underlying Securities:
[Number of shares] [Principal amount] purchasable upon exercise of one [Common
Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrant:
Terms of Underlying Securities:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I
hereto entitled "Seagull Energy Corporation-- Common Stock, Warrants to
Purchase Common Stock, Preferred Stock, Warrants to Purchase Preferred Stock,
Depositary Shares, Warrants to Purchase Depositary Shares, Debt Securities and
Warrants to Purchase Debt Securities-- Underwriting Agreement" are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined.
Please accept this offer no later than ____ o'clock P.M. (New York
City time) on ______________ by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------
Authorized Signatory
[Acting on behalf of itself and the
other named Underwriters.]
Accepted:
SEAGULL ENERGY CORPORATION
By:
-------------------------
Name:
Title:
A-4
<PAGE> 1
EXHIBIT 4.2
================================================================================
SEAGULL ENERGY CORPORATION
AND
THE BANK OF NEW YORK
______________
Senior Indenture
Dated as of September 1, 1997
================================================================================
<PAGE> 2
CROSS REFERENCE SHEET*
_________________
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of September 1, 1997 between SEAGULL ENERGY CORPORATION and The Bank of New
York, Trustee:
<TABLE>
<CAPTION>
Section of the Act Section of Indenture
- ------------------ --------------------
<S> <C>
310(a)(1), (2) and (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(a) and (c)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(b) and (c)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv),
(v), (vi) and (vii)
313(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
</TABLE>
__________
__________________________________
*This Cross Reference Sheet is not part of the Indenture.
<PAGE> 3
ARTICLE ONE
DEFINITIONS
<TABLE>
<S> <C>
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ENSTAR Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
original issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
original issue discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
principal amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Principal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Sale and Leaseback Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
vice president . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
i
<PAGE> 4
ARTICLE TWO
SECURITIES
<TABLE>
<S> <C> <C>
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3 Amount Unlimited, Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4 Authentication and Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.7 Denomination and Date of Securities; Payments of Interest . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.8 Registration Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.10 Cancellation of Securities; Disposition Thereof. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.2 Offices for Notices and Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.6 Restriction on Creation of Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.7 Restriction on Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders . . . . . . . . . 17
SECTION 4.2 Preservation and Disclosure of Securityholders Lists . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.3 Application of Moneys Collected by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.6 Remedies Cumulative and Continuing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by Majority of Securityholders . . . . . . . . . . . . 23
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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ARTICLE SIX
CONCERNING THE TRUSTEE
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SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default . . . . . . . . . . . . 24
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds
Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.4 Trustee and Agents May Hold Securities; Collections, etc. . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim . . . . . . . . . . . . . . . . . . 26
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc. . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.9 Persons Eligible for Appointment as Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . . . . . . . . 33
SECTION 6.13 Preferential Collection of Claims Against the Issuer . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities . . . . . . . . . . . . . . . . . . . 36
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.2 Supplemental Indentures with Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 39
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.2 Securities to be Secured in Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.3 Successor Corporation to be Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.4 Opinion of Counsel to be Given Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
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SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities . . . . . . . . . . . . . . . . 43
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years . . . . . . . . . . . . . 43
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities . . . . . . . . . 44
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities . . . . . . . . . . . . . . . . . . 44
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained Therein . . . . . . . . . 44
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939 . . . . . . . . . . . . . . 45
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 12.3 Payment of Securities Called for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption . . . . . . . . . . . 47
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
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THIS SENIOR INDENTURE, dated as of September 1, 1997 between SEAGULL
ENERGY CORPORATION, a Texas corporation (the "Issuer"), and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issuance from time to time
of its unsecured debentures, notes or other evidences of indebtedness to be
issued in one or more series (the "Securities") up to such principal amount or
amounts as may from time to time be authorized in accordance with the terms of
this Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been undertaken and completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders (as hereinafter defined) thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Securities as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any
indenture supplemental hereto the following terms shall have the respective
meanings specified in this Section 1.1 (except as otherwise expressly provided
or unless the context otherwise clearly requires). All other terms used in
this Indenture that are defined in the Trust Indenture Act of 1939, including
terms defined therein by reference to the Securities Act of 1933, as amended,
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of this Indenture (except as
herein otherwise expressly provided or unless the context otherwise clearly
requires).
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation.
The words "herein", "hereof" 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. The expressions "date of this
Indenture", "date hereof", "date as of which this Indenture is dated" and "date
of execution and delivery of this Indenture" and other expressions of similar
import refer to the effective date of the original execution and delivery of
this Indenture, viz. September 1, 1997.
The terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular.
"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 ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
<PAGE> 8
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted or
consented to by the Board of Directors and to be in full force and effect.
"Business Day" means, with respect to any Security, a day that (a) in
the Place of Payment (or in any of the Places of Payment, if more than one) in
which amounts are payable, as specified in the form of such Security, and (b)
in the city in which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or regulation to
close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution and delivery of this Indenture
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act of 1939, then the body performing such duties on
such date.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of the Issuer and
its Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
and expense and other like intangibles, all in accordance with generally
accepted accounting principles consistently applied.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located in New York, New York.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 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" as used with respect to the Securities
of any such series shall mean the Depositary with respect to the Global
Securities of such series.
"ENSTAR Alaska" means (i) the division of the Issuer known on the date
of this Indenture as ENSTAR Natural Gas Company, which owns on the date of this
Indenture the gas distribution system in south-central Alaska, and (ii) Alaska
Pipeline Company, an Alaska corporation and a Subsidiary of the Issuer, in each
case together with successors and assigns.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depositary for such series in accordance
with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the person in whose name such Security
is registered in the security register kept by the Issuer for that purpose in
accordance with the terms hereof.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented or both, including, for all purposes of this instrument and any
such supplement, the provisions of the Trust Indenture Act of 1939 that are
deemed to be a part of and govern this
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<PAGE> 9
instrument and any such supplement, respectively, and shall include the forms
and terms of particular series of Securities established as contemplated
hereunder.
The term "interest" means, when used with respect to non-interest
bearing Securities (including, without limitation, any Original Issue Discount
Security that by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated maturity, upon acceleration or redemption or otherwise) or
after the date, if any, on which the Issuer becomes obligated to acquire a
Security, whether upon conversion, by purchase or otherwise.
"Issuer" means (except as otherwise provided in Section 6.8) Seagull
Energy Corporation, a Texas corporation, and, subject to Article Nine, its
successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president or any vice president of the Issuer.
"Officers' Certificate", when used with respect to the Issuer, means a
certificate signed by the chairman of the Board of Directors, the president, or
any vice president and by the treasurer, any assistant treasurer, the
controller, any assistant controller, the secretary or any assistant secretary
of the Issuer. Each such certificate shall include the statements provided for
in Section 11.5 if and to the extent required by the provisions of such Section
11.5. One of the officers signing an Officers' Certificate given pursuant to
Section 4.3 shall be the principal executive, financial or accounting officer
of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the chief
counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each
such opinion shall include the statements provided for in Section 11.5, if and
to the extent required by the provisions of such Section 11.5.
The term "original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
The term "original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt security
(as set forth in the case of an Original Issue Discount Security on the face of
such Security).
"Original Issue Discount Security" means any Security that 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 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when used
with reference to Securities, shall, subject to the provisions of Section 7.4,
mean, as of any particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities (other than Securities of any series as to which
the provisions of Article Ten hereof shall not be applicable), or portions
thereof, for the payment or redemption of which moneys or U.S. Government
Obligations (as provided for in Section 10.1) in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other
than the Issuer) or shall have been set aside, segregated and held in trust by
the Issuer for the Holders of such Securities (if the Issuer shall act as its
own paying agent), provided that, if such Securities, or portions thereof, are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the Trustee
shall have been made for giving such notice; and
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<PAGE> 10
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered pursuant to
the terms of Section 2.9 (except with respect to any such Security as to which
proof satisfactory to the Trustee is presented that such Security is held by a
person in whose hands such Security is a legal, valid and binding obligation of
the Issuer).
In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding for such purposes shall be the portion of the
principal amount thereof that would be due and payable as of the date of such
determination (as certified by the Issuer to the Trustee) upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Issuer or its agents upon the issuance of
such Securities.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust, estate,
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 interest, if any,
on the Securities of such series are payable as determined in accordance with
Section 2.3.
The term "principal" of a debt security, including any Security, means
the amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Issuer, upon any purchase or exchange at the option of the Issuer
or the holder of such debt security and upon any acceleration of the maturity
of such debt security).
The term "principal amount" of a debt security, including any
Security, means the principal amount as set forth on the face of such debt
security.
"Principal Property" means any real property, manufacturing plant,
processing plant, pipeline, office building, warehouse or other physical
facility, or any other like depreciable or depletable asset of the Issuer or
any Restricted Subsidiary whether owned at September 1, 1997 or thereafter
acquired (other than any facility thereafter acquired for the control or
abatement of atmospheric pollutants or contaminants or water, noise, odor or
other pollution) which in the opinion of the Board of Directors is of material
importance to the total business conducted by the Issuer and its Restricted
Subsidiaries, as a whole; provided, however, that any such property shall not
be deemed a Principal Property if such property does not have a fair value in
excess of 3% of the total assets included on a consolidated balance sheet of
the Issuer and its Restricted Subsidiaries prepared in accordance with
generally accepted accounting principles consistently applied.
The term "record date" shall have the meaning set forth in Section
2.7.
"Responsible Officer", when used with respect to the Trustee, means
any officer assigned by the Trustee to administer its corporate trust matters.
"Restricted Subsidiary" means (a) any Subsidiary other than an
Unrestricted Subsidiary, and (b) any Subsidiary which was an Unrestricted
Subsidiary but which, subsequent to the date hereof, is designated by the
Issuer (by certified resolution of the Board of Directors delivered to the
Trustee) to be a Restricted Subsidiary; provided, however, that the Issuer may
not designate any such Subsidiary to be a Restricted Subsidiary if the Issuer
would thereby breach any covenant or agreement herein contained (on the
assumptions that any outstanding indebtedness of
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such Subsidiary was incurred at the time of such designation and that any Sale
and Leaseback Transaction to which such Subsidiary is then a party was entered
into at the time of such designation).
"Sale and Leaseback Transaction" shall have the meaning set forth in
Section 3.7.
"Secured Debt" means indebtedness for money borrowed by the Issuer or
a Restricted Subsidiary and any other indebtedness of the Issuer or a
Restricted Subsidiary on which interest is paid or payable (other than
indebtedness owed by a Restricted Subsidiary to the Issuer, by a Restricted
Subsidiary to another Restricted Subsidiary or by the Issuer to a Restricted
Subsidiary), that in any such case is secured by (a) a mortgage or other lien
on any Principal Property of the Issuer or a Restricted Subsidiary, or (b) a
pledge, lien or other security interest on any shares of stock or indebtedness
of a Restricted Subsidiary, or (c) in the case of any such indebtedness of the
Issuer, a guaranty by any Restricted Subsidiary. The amount of Secured Debt at
any time outstanding shall be the amount then owing thereon by the Issuer or a
Restricted Subsidiary.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture or, as the
case may be, Securities that have been authenticated and delivered pursuant to
this Indenture.
"Subsidiary" means any corporation of which the Issuer, or the Issuer
and one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own voting securities entitling any one or more of the Issuer and
its Subsidiaries to elect a majority of the directors, either at all times or,
so long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990, as in force at the date as of which this
Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and, if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any series
shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary acquired or
organized after the date hereof, provided, however, that such Subsidiary shall
not be a successor, directly or indirectly, to any Restricted Subsidiary, and
(b) any Subsidiary whose principal business and assets are located outside the
United States of America, its territories and possessions and Canada or are
located in Puerto Rico, and (c) any Subsidiary the principal business of which
consists of financing or assisting in financing the acquisition or disposition
of products of the Issuer or a Subsidiary by dealers, distributors or other
customers, and (d) any Subsidiary the principal business of which is owning,
leasing, dealing in or developing real property, and (e) any Subsidiary
substantially all the assets of which consist of stock or other securities of a
Subsidiary or Subsidiaries of the character described in clauses (a) through
(d) of this paragraph, unless and until such Subsidiary shall have been
designated to be a Restricted Subsidiary pursuant to clause (b) of the
definition of "Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
The term "vice president," when used with respect to the Issuer or the
Trustee, means any vice president, regardless of whether designated by a number
or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
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ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall
be substantially in such form (not inconsistent with this Indenture) as shall
be established by or pursuant to one or more Board Resolutions (as set forth in
a Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officers' Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have imprinted or
otherwise reproduced thereon such legend or legends or endorsements, not
inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto, or with
any rules of any securities exchange or to conform to general usage, all as may
be determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
The definitive Securities 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 as evidenced by their
execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be
substantially as follows:
This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.
The Bank of New York, as Trustee
By
---------------------------
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an alternate
Certificate of Authentication which shall be substantially as follows:
This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.
The Bank of New York, as Trustee
By
---------------------------
as Authenticating Agent
By
---------------------------
Authorized Signatory
SECTION 2.3 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 and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series and with all other unsecured and unsubordinated debt of the
Issuer. There shall be established in or pursuant to one or more Board
Resolutions (and, to the extent established pursuant to rather than set forth
in a Board Resolution, in an Officers' Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series:
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(1) the designation of the Securities of the series,
which shall distinguish the Securities of such series from the
Securities of all other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that 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 the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or
12.3);
(3) the date or dates on which the principal 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, the date or dates from which any
such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(5) the place or places where and the manner in which the
principal of and interest, if any, on Securities of the series shall
be payable (if other than as provided in Section 3.2) and the office
or agency for the Securities of the series maintained by the Issuer
pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem, purchase
or repay Securities of the series, in whole or in part, at its option
and the period or periods within which, the price or prices (or the
method by which such price or prices shall be determined or both) at
which, the form or method of payment therefor if other than in cash
and any terms and conditions upon which and the manner in which (if
different from the provisions of Article Twelve) Securities of the
series may be so redeemed, purchased or repaid, in whole or in part,
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series in whole or in part
pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(9) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as
Global Securities;
(11) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(12) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with respect
to the Securities of such series;
(13) any deleted, modified or additional events of
default, remedies or covenants with respect to the Securities of such
series;
(14) whether the provisions of Section 10.1(C) will be
applicable to Securities of such series;
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(15) any provision relating to the issuance of Securities
of such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which such
original issue discount shall accrue, if any, and the date or dates
from or to which or period or periods during which such original issue
discount shall accrue at such rate or rates);
(16) if the amounts of payments of principal of and
interest on the Securities of such series are to be determined with
reference to an index, the manner in which such amounts shall be
determined; and
(17) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution, such Officers' Certificate or in any such
indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred to above
with respect to Securities of any series filed with the Trustee on or before
the initial issuance of the Securities of such series shall be incorporated
herein by reference with respect to Securities of such series and shall
thereafter be deemed to be a part of the Indenture for all purposes relating to
Securities of such series as fully as if such Board Resolution or Officers'
Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities. The
Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication together with the applicable documents referred to
below in this Section 2.4, and the Trustee shall thereupon authenticate and
deliver such Securities to, or upon the order of, the Issuer (contained in the
Issuer Order referred to below in this Section 2.4) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be specified
from time to time by an Issuer Order. The maturity date, original issue date,
interest rate, if any, and any other terms of the Securities of such series
shall be determined by or pursuant to such Issuer Order and procedures. If
provided for in such procedures and agreed to by the Trustee, such Issuer Order
may authorize authentication and delivery pursuant to oral instructions from
the Issuer or its duly authorized agent, which instructions shall be promptly
confirmed in writing. In authenticating the Securities of such series and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive (in the case of
subparagraphs (2), (3) and (4) below only at or before the time of the first
request of the Issuer to the Trustee to authenticate Securities of such series)
and (subject to Section 6.1) shall be fully protected in relying upon, unless
and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions if the Securities of such series
are not to be delivered to the Issuer, provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such Issuer
Order may be delivered by the Issuer to the Trustee prior to the
delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities of
such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Issuer
or its duly authorized agent or agents, which oral instructions shall
be promptly confirmed in writing and (e) after the original issuance
of the first Security of such series to be issued, any separate
request by the Issuer that the Trustee authenticate Securities of such
series for original issuance will be deemed to be a certification by
the Issuer that it is in compliance with all conditions precedent
provided for in this Indenture relating to the authentication and
delivery of such Securities;
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<PAGE> 15
(2) the Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3 by
or pursuant to which the forms and terms of the Securities of such
series were established;
(3) an Officers' Certificate setting forth the form or
forms and terms of the Securities stating that the form or forms and
terms of the Securities have been established pursuant to Sections 2.1
and 2.3 and comply with this Indenture and covering such other matters
as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of
Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the Securities of such
series have been duly authorized and established in conformity
with the provisions of this Indenture;
(b) in the case of an underwritten offering, the
terms of the Securities of such series have been duly
authorized and established in conformity with the provisions
of this Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such series
have been established pursuant to a Board Resolution, an
Officers' Certificate or a supplemental indenture in
accordance with this Indenture, and when such other terms as
are to be established pursuant to procedures set forth in an
Issuer Order shall have been established, all such terms will
have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this
Indenture;
(c) when the Securities of such series have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered
to and duly paid for by the purchasers thereof, they will have
been duly issued under this Indenture and will be valid and
legally binding obligations of the Issuer, enforceable in
accordance with their respective terms, and will be entitled
to the benefits of this Indenture; and
(d) the execution and delivery by the Issuer of,
and the performance by the Issuer of its obligations under,
the Securities of such series will not contravene any
provision of applicable law or the articles of incorporation
or bylaws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as one
enterprise, or, to such counsel's knowledge after the inquiry
indicated therein, any judgment, order or decree of any
governmental agency or any court having jurisdiction over the
Issuer or any Subsidiary, and no consent, approval or
authorization of any governmental body or agency is required
for the performance by the Issuer of its obligations under the
Securities, except such as are specified and have been
obtained and such as may be required by the securities or blue
sky laws of the various states in connection with the offer
and sale of the Securities.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the State of Texas
and the federal law of the United States, upon opinions of other counsel
(copies of which shall be delivered to the Trustee), who shall be counsel
reasonably satisfactory to the Trustee, in which case the opinion shall state
that such counsel believes that both such counsel and the Trustee are entitled
so to rely. Such counsel may also state that, insofar as such opinion involves
factual matters, such counsel has relied, to the extent such counsel deems
proper, upon certificates of officers of the Issuer and its Subsidiaries and
certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section 2.4 if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
by the Issuer or if the Trustee in good faith by its board of directors or
board of trustees, executive committee or a trust committee of directors or
trustees or Responsible Officers shall determine that such action would expose
the Trustee
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<PAGE> 16
to personal liability to existing Holders or would adversely affect the
Trustee's own rights, duties or immunities under the Securities, this Indenture
or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section 2.4 and the Issuer Order with respect to such series,
authenticate and deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount
of all of the Securities of such series to be issued in the form of Global
Securities and not yet canceled, (ii) shall be registered in the name of the
Depositary for such Global 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 instructions, and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive registered form, this Security
may not be transferred except as a whole by the Depositary to the 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."
Each Depositary designated pursuant to Section 2.3 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, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be
signed on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one of
its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities
as shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized signatories, or its Authenticating Agent, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificate by the Trustee or its Authenticating Agent upon
any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture. Each
reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form
in denominations established as contemplated by Section 2.3 or, with respect to
the Securities of any series, if not so established, in denominations of $1,000
and any integral multiple thereof. The Securities of each series shall be
numbered, lettered or otherwise distinguished in such manner or in accordance
with such plan as the officers of the Issuer executing the same may determine
with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest, if any, shall be payable on the dates, established as contemplated by
Section 2.3.
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The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the Persons in whose names Outstanding Securities for such
series are registered (a) at the close of business on a subsequent record date
(which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established by notice given by mail by or on behalf
of the Issuer to the Holders of Securities not less than 15 days preceding such
subsequent record date or (b) as determined by such other procedure as is
mutually acceptable to the Issuer and the Trustee. The term "record date" as
used with respect to any interest payment date (except a date for payment of
defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Securities of such series established as
contemplated by Section 2.3, or, if no such date is so established, if such
interest payment date is the first day of a calendar month, the fifteenth day
of the next preceding calendar month or, if such interest payment date is the
fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.
SECTION 2.8 Registration Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide for
the registration of Securities of each series and the registration of transfer
of Securities of such series. Each such register shall be in written form in
the English language or in any other form capable of being converted into such
form within a reasonable time. At all reasonable times such register or
registers shall be open for inspection and available for copying by the
Trustee.
Upon due presentation for registration of transfer of any Security of
any series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate, if
any, and original issue date in authorized denominations for a like aggregate
principal amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the agency of the Issuer that shall be maintained for such purpose
in accordance with Section 3.2. All Securities surrendered upon any exchange
or transfer provided for in this Indenture shall be promptly canceled and
returned to the Issuer.
The Issuer 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 of Securities. No service charge shall be made for
any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing or publication of notice of redemption of Securities of such
series to be redeemed, (b) any Securities selected, called or being called for
redemption, in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed or (c) any Security
if the Holder thereof has exercised his right, if any, to require the Issuer to
repurchase such Security in whole or in part, except the portion of such
Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part 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.
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If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such ineligibility, the Issuer's election pursuant to Section
2.3 that such Securities be represented by one or more Global Securities shall
no longer be effective and the Issuer shall execute, and the Trustee, upon
receipt of an Issuer Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such Securities in exchange for such Global Security
or Securities.
The Issuer 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 a Global Security or Securities.
In such event the Issuer shall execute, and the Trustee, upon receipt of an
Issuer Order for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such Global Security
or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series in definitive registered form on such terms as
are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an 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 in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
canceled by the Trustee or an agent of the Issuer or the Trustee. Securities
in definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities are
so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid and legally binding obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver a new Security of the same
series, maturity date, interest rate, if any, and original issue date, bearing
a number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu of
and in substitution for the Security so destroyed, lost or stolen. In every
case the applicant for a substitute Security shall furnish to the Issuer and to
the Trustee and any agent of the Issuer or the Trustee such security or
indemnity as may be required by the Trustee or the Issuer to indemnify and
defend and to save each of the Trustee and the Issuer harmless and, in every
case of destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof and in
the case of mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
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Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Security), if the applicant for such payment shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as any of them may require to hold each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Issuer and the Trustee and any agent of the Issuer or
the Trustee evidence to the Trustee's satisfaction of the destruction, loss or
theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Issuer, whether or not the destroyed, lost or stolen Security shall be
at any time enforceable by anyone and shall be entitled to all the benefits of
(but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities of such
series duly authenticated and delivered hereunder. All Securities shall be
held and owned upon the express condition that, to the extent permitted by law,
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, defaced, destroyed, lost or stolen Securities and shall
preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or the
Trustee or any agent of the Trustee, shall be delivered to the Trustee or its
agent for cancellation or, if surrendered to the Trustee, shall be canceled by
it; and no Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee or its agent
shall return canceled Securities to the Issuer. If the Issuer or its agent
shall acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are delivered to the Trustee or its agent for
cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities of such series
and thereupon temporary Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.2 and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless otherwise established
pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Issuer shall notify the Trustee of any change in the "CUSIP" numbers.
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ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and interest, if any, on each of the Securities at the place,
at the respective times and in the manner provided in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So long as
any of the Securities are Outstanding, the Issuer will maintain in each Place
of Payment, an office or agency where the Securities may be presented for
payment, an office or agency where the Securities may be presented for
registration of transfer and for exchange as in this Indenture provided, and an
office or agency where notices and demands to or upon the Issuer in respect of
the Securities or of this Indenture may be served. In case the Issuer shall at
any time fail to maintain any such office or agency, or shall fail to give
notice to the Trustee of any change in the location thereof, presentation may
be made and notice and demand may be served in respect of the Securities or of
this Indenture at the Corporate Trust Office. The Issuer hereby initially
designates the Corporate Trust Office for each such purpose and appoints the
Trustee as registrar and paying agent and as the agent upon whom notices and
demands may be served with respect to the Securities.
SECTION 3.3 No Interest Extension. In order to prevent any
accumulation of claims for interest after maturity thereof, the Issuer will not
directly or indirectly extend or consent to the extension of the time for the
payment of any claim for interest on any of the Securities and will not
directly or indirectly be a party to or approve any such arrangement by the
purchase or funding of said claims or in any other manner; provided, however,
that this Section 3.3 shall not apply in any case where an extension shall be
made pursuant to a plan proposed by the Issuer to the Holders of all Securities
of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Agent. (a) If the Issuer
shall appoint a paying agent other than the Trustee, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 3.5,
(1) that it will hold all sums held by it as such agent
for the payment of the principal of or interest, if any, on the
Securities (whether such sums have been paid to it by the Issuer or by
any other obligor on the Securities) in trust for the benefit of the
Holders of the Securities and the Trustee; and
(2) that it will give the Trustee notice of any failure
by the Issuer (or by any other obligor on the Securities) to make any
payment of the principal of or interest, if any, on the Securities
when the same shall be due and payable; and
(3) that it will, at any time during the continuance of
any such failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it will, on
or before each due date of the principal of or interest, if any, on the
Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal or interest,
if any, so becoming due and will notify the Trustee of any failure to take such
action and of any failure by the Issuer (or by any other obligor under the
Securities) to make any payment of the principal of or interest, if any, on the
Securities when the same shall become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding,
the Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by it, or any paying agent hereunder, as
required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
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(d) Anything in this Section 3.5 to the contrary notwithstanding,
any agreement of the Trustee or any paying agent to hold sums in trust as
provided in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more paying agents, it
will, on or before each due date of the principal of or interest, if any, on
any Securities, deposit with a paying agent a sum sufficient to pay the
principal or interest, if any, so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal or interest, if any,
and (unless such paying agent is the Trustee) the Issuer will promptly notify
the Trustee of its action or failure so to act.
SECTION 3.6 Restriction on Creation of Secured Debt. So long as
any of the Securities are outstanding, the Issuer shall not at any time create,
incur, assume or guarantee, and shall not cause, suffer or permit a Restricted
Subsidiary to create, incur, assume or guarantee, any Secured Debt without
making effective provision (and the Issuer covenants that in such case it will
make or cause to be made such effective provision) whereby the Securities then
Outstanding and any other indebtedness of or guaranteed by the Issuer or such
Restricted Subsidiary then entitled thereto, subject to applicable priorities
of payment, shall be secured by such mortgage, security interest, pledge, lien
or encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations and
indebtedness shall be so secured; provided, that if any such mortgage, security
interest, pledge, lien or encumbrance securing such indebtedness ceases to
exist, such equal and ratable security for the benefit of the Holders of
Securities shall automatically cease to exist without any further action;
provided further that if such indebtedness is expressly subordinated to the
Securities, the mortgage, security interest, pledge, lien or encumbrance
securing such indebtedness shall be subordinate and junior to the mortgage,
security interest, pledge, lien or encumbrance securing the Securities with the
same relative priority as such indebtedness shall have with respect to the
Securities; provided further, that the foregoing covenants shall not be
applicable to the following:
(a)(i) Any mortgage, security interest, pledge, lien or encumbrance
on any property hereafter acquired (including acquisition through merger or
consolidation) or constructed by the Issuer or a Restricted Subsidiary and
created contemporaneously with, or within twelve months after, such acquisition
or the completion of construction to secure or provide for the payment of all
or any part of the purchase price of such property or the cost of construction
thereof, as the case may be; or (ii) any mortgage on property (including any
unimproved portion of partially improved property) of the Issuer or a
Restricted Subsidiary created within twelve months of completion of
construction of a new plant or plants on such property to secure all or part of
the cost of such construction if, in the opinion of the Board of Directors,
such property or such portion thereof was prior to such construction
substantially unimproved for the use intended by the Issuer; or (iii) the
acquisition of property subject to any mortgage, security interest, pledge,
lien or encumbrance upon such property existing at the time of acquisition
thereof, whether or not assumed by the Issuer or such Restricted Subsidiary; or
(iv) any mortgage, security interest, pledge, lien or encumbrance existing on
the property or on the outstanding shares or indebtedness of a corporation or
other entity at the time such corporation or other entity shall become a
Restricted Subsidiary; or (v) any mortgage, security interest, pledge, lien or
encumbrance on property of a corporation or other entity existing at the time
such corporation or other entity is merged into or consolidated with the Issuer
or a Restricted Subsidiary or at the time of a sale, lease or other disposition
of the properties of a corporation or other entity as an entirety or
substantially as an entirety to the Issuer or a Restricted Subsidiary; or
(b) Mortgages on property of the Issuer or a Restricted Subsidiary
in favor of the United States of America or any State thereof or any foreign
government, or any department, agency or instrumentality or political
subdivision of any thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase price or
the cost of construction of the property subject to such mortgages; or
(c) Any mortgage, security interest, pledge, lien or encumbrance
existing on property owned by the Issuer or any of its Subsidiaries on the date
of this Indenture; or
(d) Any mortgage, security interest, pledge, lien or encumbrance
created pursuant to the creation of trusts or other arrangements funded solely
with cash, cash equivalents or other marketable investments or securities of
the type customarily subject to such arrangements in customary financial
practice with respect to long-term or
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medium-term indebtedness for money borrowed, the sole purpose of which is to
make provision for the retirement or defeasance, without prepayment of
indebtedness; or
(e) Any mortgage, security interest, pledge, lien or encumbrance
on the assets or properties of ENSTAR Alaska; or
(f) Any mortgage, security interest, pledge, lien or encumbrance
securing (i) all or part of the cost of exploring, producing, gathering,
processing, marketing, drilling or developing any properties of the Company or
any of its Subsidiaries, or securing indebtedness incurred to provide funds
therefor, or (ii) indebtedness incurred to finance all or part of the cost of
acquiring, constructing, altering, improving or repairing any such property or
assets, or securing indebtedness incurred to provide funds therefor; or
(g) Any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any mortgage,
security interest, pledge, lien or encumbrance referred to in the foregoing
subparagraphs (a) through (f); provided, however, that the principal amount of
Secured Debt secured thereby shall not exceed the principal amount outstanding
at the time of such extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to the property which secured the
mortgage, security interest, pledge, lien or encumbrance so extended, renewed
or replaced and additions to such property.
Notwithstanding the foregoing provisions of this Section 3.6, the
Issuer and any one or more Restricted Subsidiaries may create, incur, assume or
guarantee Secured Debt which would otherwise be subject to the foregoing
restrictions in an aggregate amount that, without duplication, together with
all other Secured Debt of the Issuer and its Restricted Subsidiaries which
would otherwise be subject to the foregoing restrictions (not including Secured
Debt permitted to be secured under subparagraphs (a) through (g) above) and the
aggregate value of the Sale and Leaseback Transactions (as defined in Section
3.7) in existence at such time (not including Sale and Leaseback Transactions
the proceeds of which have been or will be applied in accordance with clause
(b) of Section 3.7) does not at the time exceed 10% of Consolidated Net
Tangible Assets (excluding ENSTAR Alaska). Solely for purposes of
subparagraphs (a) through (g) above, the term "mortgage" shall include any
arrangements in connection with a production payment or similar financing
arrangement.
SECTION 3.7 Restriction on Sale and Leaseback Transactions. The
Issuer will not, and will not permit any Restricted Subsidiary to, sell or
transfer (except to the Issuer or to one or more Restricted Subsidiaries, or
both) any Principal Property owned by it and which has been in full operation
for more than 120 days prior to such sale or transfer with the intention (i) of
taking back a lease on such property (other than a lease for a period not
exceeding 36 months) and (ii) that the use by the Issuer or such Restricted
Subsidiary of such property will be discontinued on or before the expiration of
the term of such lease (any such transaction being herein referred to as a
"Sale and Leaseback Transaction"), unless (a) the Issuer or such Restricted
Subsidiary would be entitled, pursuant to the provisions of Section 3.6, to
incur Secured Debt equal in amount to the amount realized or to be realized
upon such sale or transfer secured by a mortgage on the property to be leased
without equally and ratably securing the Securities, or (b) the Issuer or a
Restricted Subsidiary shall apply an amount equal to the value of the property
so leased to the retirement (other than any mandatory retirement), within 120
days of the effective date of any such arrangement, of indebtedness for money
borrowed by the Issuer or any Restricted Subsidiary (other than such
indebtedness owned by the Issuer or any Restricted Subsidiary) which was
recorded as funded debt as of the date of its creation and which, in the case
of such indebtedness of the Issuer, is not subordinate and junior in right of
payment to the prior payment of the Securities; provided, however, that the
amount to be so applied to the retirement of such indebtedness shall be reduced
by (i) the aggregate principal amount of any Securities delivered within 120
days of the effective date of any such arrangement to the Trustee for
retirement and cancellation, and (ii) the aggregate principal amount of such
indebtedness (other than the Securities) retired by the Issuer or a Restricted
Subsidiary within 120 days of the effective date of any such arrangement.
The term "value" shall mean, with respect to a Sale and Leaseback
Transaction, as of any particular time, the amount equal to the greater of (i)
the net proceeds of the sale of the property leased pursuant to such Sale and
Leaseback Transaction, or (ii) the fair value of such property at the time of
entering into such Sale and Leaseback Transaction, as determined by the Board
of Directors, in either case divided first by the number of full years of the
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term of the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of the
names and addresses of the Holders of the Securities of each series:
(a) semiannually and not more than 15 days after each March 1 and
September 1, and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to it
as provided in Section 4.1, and (ii) received by it in the capacity of
registrar or paying agent for such series, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of a
new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Securities of a particular series (in which case the applicants must all
hold Securities of such series) or with Holders of all Securities with respect
to their rights under this Indenture or under such Securities and such
application is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number
of Holders of Securities of such series or of all Securities, as the
case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to
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the best interests of the Holders of Securities of such series or of all
Securities, as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any of
such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met, and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and holding
the same, agrees with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee 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 the provisions of
subsection (b) of this Section 4.2, 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 such subsection
(b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer 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 Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended; or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections, then to 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, as amended, in respect of a debt
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(b) to 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
Issuer with the conditions and covenants provided for in this Indenture as may
be required from time to time by such rules and regulations;
(c) if there are any Original Issue Discount Securities
Outstanding, to file with the Trustee promptly after the end of each calendar
year (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on such Securities as of
the end of such year and (ii) such other specific information relating to such
original issue discount as may then be relevant under the Internal Revenue Code
of 1986, as amended from time to time;
(d) to transmit by mail to the Holders of Securities within 30
days after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a), (b) and
(c) of this Section 4.3 as may be required to be transmitted to such Holders by
rules and regulations prescribed from time to time by the Commission; and
(e) furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his knowledge of the Issuer's compliance
with all conditions and covenants under this Indenture. For purposes of this
subsection (e), such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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SECTION 4.4 Reports by the Trustee. (a) Within 60 days after
January 1 of each year commencing with the year 1998, the Trustee shall
transmit by mail to the Holders of Securities, as provided in subsection (c) of
this Section, a brief report dated as of such January 1 with respect to any of
the following events which may have occurred within the last 12 months (but if
no such event has occurred within such period, no report need be transmitted):
(i) any change to its eligibility under Section 6.9 and
its qualification under Section 6.8;
(ii) the creation of, or any material change to, a
relationship specified in paragraph (i) through (x) of Section 6.8
(c);
(iii) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities of any series,
on any property or funds held or collected by it as Trustee, except
that the Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not more than
1/2 of 1% of the principal amount of all Securities Outstanding on the
date of such report;
(iv) the amount, interest rate, if any, and maturity date
of all other indebtedness owing by the Issuer (or by any other obligor
on the Securities) to the Trustee in its individual capacity on the
date of such report, with a brief description of any property held as
collateral security therefor, except any indebtedness based upon a
creditor relationship arising in any manner described in Section
6.13(b) (2), (3), (4) or (6);
(v) any change to the property and funds, if any,
physically in the possession of the Trustee (as such) on the date of
such report;
(vi) any additional issue of Securities which the Trustee
has not previously reported; and
(vii) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously reported
and which in its opinion materially affects the Securities, except
action in respect of a default, notice of which has been or is to be
withheld by it in accordance with the provisions of Section 5.8.
(b) The Trustee shall transmit to the Securityholders of each
series, as provided in subsection (c) of this Section 4.4, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee, as such, since the date of the last report transmitted pursuant to the
provisions of subsection (a) of this Section 4.4 (or if no such report has yet
been so transmitted, since the date of this Indenture) for the reimbursement of
which it claims or may claim a lien or charge prior to that of the Securities
of such series on property or funds held or collected by it as Trustee and
which it has not previously reported pursuant to this subsection (b), except
that the Trustee shall not be required (but may elect) to report such advances
if such advances remaining unpaid at any time aggregate 10% or less of the
principal amount of all Securities Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail:
(i) to all Holders of Securities, as the names and
addresses of such Holders appear upon the registry books of the
Issuer; and
(ii) to all other Persons to whom such reports are
required to be transmitted pursuant to Section 313(c) of the Trust
Indenture Act of 1939.
(d) A copy of each such report shall, at the time of such transmission
to Securityholders, be furnished to the Issuer and be filed by the Trustee with
each stock exchange upon which the Securities of any applicable series are
listed and also with the Commission. The Issuer agrees to promptly notify the
Trustee with respect to any series when and as the Securities of such series
become admitted to trading on any national securities exchange or any delisting
from trading thereon.
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ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events (whatever the reason for such Event of Default), unless it is
either inapplicable to a particular series or it is specifically deleted or
modified in or pursuant to the Board Resolution or supplemental indenture
establishing such series of Securities or in the form of Security, for such
series:
(a) default in the payment of any installment of interest upon any
of the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if any,
of the Securities of such series as and when the same shall become due and
payable either at maturity, upon redemption, by declaration or otherwise; or
(c) default in the payment or satisfaction of any sinking fund or
other purchase obligation with respect to Securities of such series, as and
when such obligation shall become due and payable as in this Indenture
expressed; or
(d) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer in the
Securities of such series or in this Indenture continued for a period of 60
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Issuer by the Trustee by certified
or registered mail, or to the Issuer and the Trustee by the Holders of at least
25% in aggregate principal amount of the Securities of such series then
Outstanding; or
(e) without the consent of the Issuer a court having jurisdiction
shall enter an order for relief with respect to the Issuer under the Bankruptcy
Code or without the consent of the Issuer a court having jurisdiction shall
enter a judgment, order or decree adjudging the Issuer a bankrupt or insolvent,
or enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Issuer under the Bankruptcy Code or
applicable state insolvency law and the continuance of any such judgment, order
or decree is unstayed and in effect for a period of 90 consecutive days; or
(f) the Issuer shall institute proceedings for entry of an order
for relief with respect to the Issuer under the Bankruptcy Code or for an
adjudication of insolvency, or shall consent to the institution of bankruptcy
or insolvency proceedings against it, or shall file a petition seeking, or seek
or consent to reorganization, arrangement, composition or relief under the
Bankruptcy Code or any applicable state law, or shall consent to the filing of
such petition or to the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator or similar official of the Issuer or of
substantially all of its property, or the Issuer shall make a general
assignment for the benefit of creditors as recognized under the Bankruptcy
Code; or
(g) any other Event of Default provided with respect to the
Securities of such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities
of such series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, notwithstanding anything to the contrary contained
in this Indenture or in the Securities of such series. This provision,
however, is subject to the condition that, if at any time after the
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unpaid principal amount (or such specified amount) of the Securities of such
series shall have been so declared due and payable and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Securities of such series and the principal of any and all Securities of
such series which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest, if any, to the extent that
payment of such interest is enforceable under applicable law and on such
principal at the rate borne by the Securities of such series to the date of
such payment or deposit) and the reasonable compensation, disbursements,
expenses and advances of the Trustee, and any and all defaults under this
Indenture, other than the nonpayment of such portion of the principal amount of
and accrued interest, if any, on Securities of such series which shall have
become due by acceleration, shall have been cured or shall have been waived in
accordance with Section 5.7 or provision deemed by the Trustee to be adequate
shall have been made therefor, then and in every such case the Holders of a
majority in aggregate principal amount of the Securities of such series then
Outstanding, by written notice to the Issuer and to the Trustee, may rescind
and annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon. If any Event of Default with respect to
the Issuer specified in Section 5.1(e) or 5.1(f) occurs, all unpaid principal
amount (or, if the Securities of any series then Outstanding are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of each such series) and accrued interest on all Securities of
each series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1
(a), (b) or (c), the Trustee shall not be charged with knowledge of any Event
of Default unless written notice thereof shall have been given to a Responsible
Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a) if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such default
shall have continued for a period of 30 days, or (b) if default shall be made
in the payment of the principal of any of the Securities of such series as and
when the same shall have become due and payable, whether at maturity of the
Securities of such series or upon redemption or by declaration or otherwise,
then, upon demand of the Trustee, the Issuer will pay to the Trustee, for the
benefit of the Holders of the Securities, the whole amount that then shall have
become due and payable on all such Securities of such series for principal or
interest, if any, or both, as the case may be, with interest upon the overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of interest, if any, at the rate
borne by the Securities of such series; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any expenses or liabilities incurred by the Trustee hereunder
other than through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any other obligor on the
Securities of such series and collect in the manner provided by law out of the
property of the Issuer or any other obligor on the Securities of such series,
wherever situated, the moneys adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other obligor,
or in the case of any other similar judicial proceedings relative to the Issuer
or other
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obligor upon the Securities of such series, or to the creditors or property of
the Issuer or such other obligor, the Trustee, irrespective of whether the
principal of the Securities of such series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provisions of this
Section 5.2, shall be entitled and empowered by intervention in such
proceedings or otherwise to file and prove a claim or claims for the whole
amount of principal and interest, if any, owing and unpaid in respect of the
Securities of such series, and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of the Securityholders
allowed in such judicial proceedings relative to the Issuer or any other
obligor on the Securities of such series, its or their creditors, or its or
their property, and to collect and receive any moneys or other property payable
or deliverable on any such claims, and to distribute the same after the
deduction of its charges and expenses, and any receiver, assignee or trustee or
similar official in bankruptcy or reorganization is hereby authorized by each
of the Securityholders to make such payments to the Trustee, and, if the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due it for compensation and
expenses, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable compensation,
expenses and counsel fees and expenses out of the estate in any such
proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall be for the ratable benefit of the Holders of
the Securities of the series in respect of which such judgment has been
recovered.
SECTION 5.3 Application of Moneys Collected by Trustee. Any
moneys collected by the Trustee pursuant to Section 5.2 with respect to
Securities of any series then Outstanding shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
of all other expenses and liabilities incurred, and all advances made, by the
Trustee pursuant to Section 6.6 except as a result of its negligence or bad
faith;
SECOND: If the principal of the Outstanding Securities of such series
shall not have become due and be unpaid, to the payment of interest, if any, on
the Securities of such series, in the order of the maturity of the installments
of such interest, if any, with interest (to the extent that such interest has
been collected by the Trustee) upon the overdue installments of interest, if
any, at the rate borne by the Securities of such series, such payment to be
made ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities of such series
shall have become due, by declaration or otherwise, to the payment of the whole
amount then owing and unpaid upon the Securities of such series for principal
and interest, if any, with interest on the overdue principal and (to the extent
that such interest has been collected by the Trustee) upon overdue installments
of interest, if any, at the rate borne by the Securities of such series; and in
case such moneys shall be insufficient to pay in full the whole amounts so due
and unpaid upon the Securities of such series, then to the payment of such
principal and interest, if any, without preference or priority of principal
over interest or of interest over principal, or of any installment of interest
over any other installment of interest, or of any Security over any other
Security, ratably to the aggregate of such principal and accrued and unpaid
interest; and
FOURTH: To the payment of any surplus then remaining to the Issuer,
its successors or assigns, or to whomsoever may be lawfully entitled to receive
the same.
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No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities to which
it relates, or which in any manner shall have been kept alive after maturity by
an extension (otherwise than pursuant to an extension made pursuant to a plan
proposed by the Issuer to the Holders of all Securities of any series then
Outstanding), purchase, funding or otherwise by or on behalf or with the
consent or approval of the Issuer shall be entitled, in case of a default
hereunder, to any benefit of this Indenture, except after prior payment in full
of the principal of all Securities of any series then Outstanding and of all
claims for interest not so transferred, pledged, kept alive, extended,
purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee or similar official, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding, it being
understood and intended, and being expressly covenanted by the Holder of every
Security of such series with every other taker and Holder and the Trustee, that
no one or more Holders of Securities of such series shall have any right in any
manner whatever by virtue of or by availing of any provision of this Indenture
or of the Securities to affect, disturb or prejudice the rights of any other
Holder of such Securities of such series, or to obtain or seek to obtain
priority over or preference as to any other such Holder, or to enforce any
right under this Indenture or the Securities, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities of such series.
Notwithstanding any other provisions in this Indenture, however, the
right of any Holder of any Security to receive payment of the principal of and
interest, if any, on such Security, on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any
such payment on or after such respective dates shall not be impaired or
affected without the consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of
Default hereunder, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceedings
in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to the Trustee or
the Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and remedy given by this Article Five or
by law to the Trustee or to the Securityholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders. The Holders of a majority in aggregate principal
amount of the Securities of any series then Outstanding 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 Securities of such series; provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine upon advice
of counsel that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, its executive
committee, or a trust committee of directors or Responsible Officers or both
shall determine that the action or proceeding so directed would involve the
Trustee in
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personal liability. The Holders of a majority in aggregate principal amount of
the Securities of any series then Outstanding may on behalf of the Holders of
all of the Securities of such series waive any past default or Event of Default
hereunder and its consequences except a default in the payment of interest, if
any, on, or the principal of, the Securities of such series. Upon any such
waiver the Issuer, the Trustee and the Holders of the Securities of such series
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event
of Default hereunder shall have been waived as permitted by this Section 5.7,
said default or Event of Default shall for all purposes of the Securities and
this Indenture be deemed to have been cured and to be not continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 90
days after the occurrence of a default, with respect to Securities of any
series then Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the Securities
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of this Section 5.8 being hereby
defined to be the events specified in clauses (a), (b), (c), (d), (e), (f) and
(g) of Section 5.1, not including periods of grace, if any, provided for
therein and irrespective of the giving of the written notice specified in said
clause (d) but in the case of any default of the character specified in said
clause (d) no such notice to Securityholders shall be given until at least 60
days after the giving of written notice thereof to the Issuer pursuant to said
clause (d), as the case may be); provided, however, that, except in the case of
default in the payment of the principal of or interest, if any, on any of the
Securities, or in the payment or satisfaction of any sinking fund or other
purchase obligation, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee, or a trust
committee of directors or Responsible Officers or both of the Trustee in good
faith determines that the withholding of such notice is in the best interests
of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorney's fees and expenses, against
any party litigant in such suit, having due regard to the merits and good faith
of the claims or defenses made by such party litigant; but the provisions of
this Section 5.9 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Securityholder, or group of Securityholders, holding in
the aggregate more than 10% in principal amount of the Securities of any series
then Outstanding, or to any suit instituted by any Securityholders for the
enforcement of the payment of the principal of or interest, if any, on any
Security against the Issuer on or after the due date expressed in such
Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such Events
of Default with respect to such series which may have occurred:
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(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined solely by
the express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations
or other facts stated therein);
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.7 relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section
6.1:
(a) the Trustee may rely conclusively and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers' Certificate or
Issuer Order (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the secretary or an assistant
secretary of the Issuer;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel promptly confirmed in writing shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture (including, without limitation, pursuant to Section 5.1), unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, 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, consent, order, approval, appraisal,
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bond, debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a majority in
aggregate principal amount of the Securities of all series affected then
Outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such investigation shall be paid by the Issuer or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be deemed to have notice of any Default
of Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture, of the
Securities or of any prospectus used to sell the Securities. The Trustee shall
not be accountable for the use or application by the Issuer of any of the
Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and, subject
to Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed to in writing between the Issuer and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any and all loss, liability, damage,
claim or expense, including taxes (other than taxes based on the income of the
Trustee), incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim or liability in the
premises. The obligations of the Issuer under this Section 6.6 to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture or the resignation or removal
of the Trustee. Such additional indebtedness shall be a senior claim to that
of the Securities upon all property and
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funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Securities, and the Securities are
hereby subordinated to such senior claim. When the Trustee incurs expenses or
renders services in connection with an Event of Default specified in Section
5.1 or in connection with Article Five hereof, the expenses (including the
reasonable fees and expenses of its counsel) and the compensation for the
service in connection therewith are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate,
etc. Subject to Sections 6.1 and 6.2, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable that
a matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. (a)
If the Trustee has or shall acquire any conflicting interest (as defined in
subsection (c)), then within 90 days after ascertaining that it has such
conflicting interest, and if the default (as defined in subsection (c)) to
which such conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such 90-day period, the Trustee shall
either eliminate such conflicting interest or, except as otherwise provided
below, resign, and the Issuer shall take prompt steps to have a successor
appointed in the manner provided in Section 6.10.
(b) If the Trustee shall fail to comply with the provisions of
subsection (a), the Trustee shall, within 10 days after the expiration of such
90-day period, transmit notice of such failure to the Securityholders in the
manner and to the extent provided in Section 4.4 and, subject to the provisions
of Section 5.9, unless the Trustee's duty to resign is stayed as provided
below, any Securityholder who has been a bona fide Holder of Securities 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,
and the appointment of a successor, if the Trustee fails, after written request
thereof by such Securityholder, to comply with the provisions of subsection
(a).
Except in the case of a default in the payment of the principal of or
interest on any Security, or in the payment of any sinking or purchase fund
installment, the Trustee shall not be required to resign as provided by this
Section 6.8 if the Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing thereon, that
(i) the default under the Indenture may be cured or
waived during a reasonable period and under the procedures described
in such application, and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Securities.
The filing of such an application shall automatically stay the
performance of the duty to resign until the Commission orders otherwise. Any
resignation of the Trustee shall become effective only upon the appointment of
a successor trustee in accordance with the provisions of Section 6.10 and such
successor's acceptance of such an appointment.
(c) For the purposes of this Section 6.8, the Trustee shall be
deemed to have a conflicting interest with respect to Securities of any series
if the Securities of such series are in default (as determined in accordance
with the provisions of Section 5.1, but exclusive of any period of grace or
requirement of notice) and
(i) the Trustee is trustee under this Indenture with
respect to the Outstanding securities of any other series or is a
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of
the Issuer are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists of
Securities issued under this Indenture; provided that there shall be
excluded from the operation of this paragraph (i), this Indenture with
respect to
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the Securities of any other series and there shall also be so excluded
any other indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the
Issuer are outstanding if (x) this Indenture is and, if applicable,
this Indenture and any series issued pursuant to this Indenture and
such other indenture or indentures are wholly unsecured and rank
equally and such other indenture or indentures are hereafter qualified
under the Trust Indenture Act of 1939, unless the Commission shall
have found and declared by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act of 1939 that differences exist
between the provisions of this Indenture with respect to Securities of
such series and one or more other series, or the provisions of this
Indenture and the provisions of such other indenture or indentures
which are so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under this
Indenture with respect to Securities of such series and such other
series, or under this Indenture or such other indenture or indentures,
or (y) the Issuer shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that trusteeship under this Indenture with respect to
Securities of such series and such other series, or under this
Indenture and such other indenture or indentures is not so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture with respect to
Securities of such series and such other series, or under this
Indenture and such other indentures;
(ii) the Trustee or any of its directors or executive
officers is an underwriter for the Issuer;
(iii) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with an underwriter for the Issuer;
(iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee, or
representative of the Issuer, or of an underwriter (other than the
Trustee itself) for the Issuer who is currently engaged in the
business of underwriting, except that (x) one individual may be a
director or an executive officer, or both, of the Trustee and a
director or an executive officer, or both, of the Issuer, but may not
be at the same time an executive officer of both the Trustee and the
Issuer; (y) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a
director of the Issuer; and (z) the Trustee may be designated by the
Issuer or by any underwriter for the Issuer to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal agent,
escrow agent, or depositary, or in any other similar capacity, or,
subject to the provisions of subsection (c) (i) of this Section, to
act as trustee, whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the Trustee
is beneficially owned either by the Issuer or by any director, partner
or executive officer thereof, or 20% or more of such voting securities
is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Issuer or by any
director, partner, or executive officer thereof, or is beneficially
owned, collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, (x) 5% or
more of the voting securities or 10% or more of any other class of
security of the Issuer, not including the Securities issued under this
Indenture and securities issued under any other indenture under which
the Trustee is also trustee, or (y) 10% or more of any class of
security of an underwriter for the Issuer;
(vii) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, 5% or more
of the voting securities of any person who, to the knowledge of the
Trustee, owns 10% or more of the voting securities of, or controls
directly or indirectly or is under direct or indirect common control
with, the Issuer;
(viii) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, 10% or more
of any class security of any person who, to the knowledge of the
Trustee, owns 50% or more of the voting securities of the Issuer;
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(ix) the Trustee owns on the date of default (as
determined in accordance with the provisions of Section 5.1, but
exclusive of any period of grace or requirement of notice) or on any
anniversary of such default while such default remains outstanding, in
the capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or of
any class of security, of any Person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting
interest under paragraphs (vi), (vii) or (viii) of this subsection.
As to any such securities of which the Trustee acquired ownership
through becoming executor, administrator, or testamentary trustee of
an estate which included them, the provisions of the preceding
sentence shall not apply, for a period of two years from the date of
such acquisition, to the extent that such securities included in such
estate do not exceed 25% of such voting securities or 25% of any such
class of security. Promptly after the dates of any such default and
annually in each succeeding year that the Securities remain in
default, the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such dates.
If the Issuer fails to make payment in full of principal of or
interest on any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the
Trustee shall make a prompt check of its holdings of such Securities
in any of the above-mentioned capacities as of the date of the
expiration of such 30-day period, and after such date, notwithstanding
the foregoing provisions of this paragraph, all such Securities so
held by the Trustee, with sole or joint control over such Securities
vested in it, shall, but only so long as such failure shall continue,
be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (vi), (vii) and (viii) of this subsection; or
(x) except under the circumstances described in paragraphs (1), (3),
(4), (5) or (6) of Section 6.13(b), the Trustee shall be or shall become a
creditor of the Issuer.
For purposes of subsection (c) (i), the term "series of securities" or
"series" means a series, class or group of securities issuable under an
indenture pursuant to the terms of which holders of one such series may vote to
direct the Trustee, or otherwise take action pursuant to a vote of such
holders, separately from holders of another such series; provided that "series
of securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in subsections (c) (v) to (ix)
inclusive of this Section 6.8 shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of subsections (c) (iii) or (vii) of this Section.
For the purposes of subsections (c) (vi), (vii), (viii) and (ix), of
this Section 6.8, only,
(A) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities,
but shall not include any note or other evidence of indebtedness
issued to evidence an obligation to repay moneys lent to a person by
one or more banks, trust companies, or banking firms, or any
certificate of interest or participation in any such note or evidence
of indebtedness;
(B) an obligation shall be deemed to be in default when a
default in payment of principal shall have continued for 30 days or
more and shall not have been cured; and
(C) the Trustee shall not be deemed to be the owner or
holder of (x) any security which it holds as collateral security, as
trustee or otherwise, for an obligation which is not in default as
defined in clause (B) above, or (y) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (z) any security which it holds as agent for collection,
or as custodian, escrow agent, or depositary, or in any similar
representative capacity.
Except as provided above, the word "security" or "securities" as used
in this Section 6.8 shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in any profit-sharing agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any
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certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing.
(d) For purposes of this Section 6.8:
(i) the term "underwriter" when used with reference to
the Issuer shall mean every person who, within a one year period prior
to the time as of which the determination is made, was an underwriter
of any security of the Issuer outstanding at the time of the
determination;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions with
respect to any organization whether incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization, or a government or political
subdivision thereof; as used in this paragraph, the term "trust" shall
include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the
direction or management of the affairs of a person;
(v) the term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean the
president, every vice president, every trust officer, the cashier, the
secretary, and the treasurer of a corporation, and any individual
customarily performing similar functions with respect to any
organization whether incorporated or unincorporated, but shall not
include the chairman of the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section 6.8 shall be calculated in accordance with the
following provisions:
(i) a specified percentage of the voting securities of
the Trustee, the Issuer or any other person referred to in this
Section (each of whom is referred to as a "person" in this paragraph)
means such amount of the outstanding voting securities of such person
as entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person;
(ii) a specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding;
(iii) the term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security;
(iv) the term "outstanding" means issued and not held by
or for the account of the issuer; the following securities shall not
be deemed outstanding within the meaning of this definition:
(A) securities of an issuer held in a sinking
fund relating to securities of the issuer of the same class;
(B) securities of an issuer held in a sinking
fund relating to another class of securities of the issuer, if
the obligation evidenced by such other class of securities is
not in default as to principal or interest or otherwise;
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(C) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(D) securities held in escrow if placed in escrow
by the issuer thereof;
provided, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof; and
(v) a security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided, that,
in the case of secured evidences of indebtedness, all of which are
issued under a single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes and provided,
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The
Trustee for each series of Securities hereunder shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any state or the District of Columbia having a combined capital
and surplus of at least $50,000,000, and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal, state or District of Columbia authority, or a corporation or other
Person permitted to act as trustee by the Commission. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. No obligor upon the Securities or any
Affiliate of such obligor shall serve as trustee upon the Securities. In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.9, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer. Upon receiving such notice
of resignation, the Issuer shall promptly appoint a successor trustee or
trustees with respect to the applicable series by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning trustee
may, at the expense of the Issuer, petition any court of competent jurisdiction
for the appointment of a successor trustee, or any Securityholder who has been
a bona fide Holder of a Security or Securities of the applicable series for at
least six months may, subject to the provisions of Section 5.9, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of Section 6.8 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at
least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after
written request therefor by the Issuer or by any such Securityholder;
or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator 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;
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then, in any such case, the Issuer may remove the Trustee with respect
to the applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 5.9, any Securityholder who has been a bona fide Holder of a Security
or Securities 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 and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee with
respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
delivery of such evidence of removal, the Trustee may, at the expense of the
Issuer, petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Section 5.9, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as
if originally named as trustee for such series hereunder; but, nevertheless, on
the written request of the Issuer or of the successor trustee, upon payment of
its charges then unpaid, the trustee ceasing to act shall, subject to Section
10.4, pay over to the successor trustee all moneys at the time held by it
hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Issuer shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a prior claim upon all property or funds held
or collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any series as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and 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 under
separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their
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addresses as they shall appear on the registry books. If the Issuer fails to
give such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be given at
the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. 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 that such corporation shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the certificate of
the Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
(a) Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Issuer
within three months prior to a default, as defined in subsection (c) of this
Section 6.13, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in this
Section 6.13):
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in respect of
principal or interest, effected after the beginning of such three
month period and valid as against the Issuer and its other creditors,
except any such reduction resulting from the receipt or disposition of
any property described in subsection (a) (2) of this section, or from
the exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against the
Issuer upon the date of such default; and
(2) all property received by the Trustee in respect of
any claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three month period, or an amount equal to the proceeds of any
such property, if disposed of, subject, however, to the rights, if
any, of the Issuer and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Issuer) who is
liable thereon, (ii) the proceeds of the bona fide sale of any such
claim by the Trustee to a third Person, and (iii) distributions made
in cash, securities or other property in respect of claims filed
against the Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Bankruptcy Code or applicable state
law;
(B) to realize, for its own account, upon any property
held by it as security for any such claim, if such property was so
held prior to the beginning of such three month period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property held by
it as security for any such claim, if such claim was created after the
beginning of such three month period and such property was received as
security therefor simultaneously with the
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creation thereof, and if the Trustee shall sustain the burden of
proving that at the time such property was so received the Trustee had
no reasonable cause to believe that a default as defined in subsection
(c) of this Section would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held as
security for such claim as provided in such paragraph (B) or (C), as
the case may be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any preexisting claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, such Securityholders and the
holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Bankruptcy Code or applicable state law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Issuer of the funds and
property in such special account, and before crediting to the respective claims
of the Trustee, such Securityholders and the holders of other indenture
securities, dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Bankruptcy
Code or applicable state law, but after crediting thereon receipts on account
of the indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term "dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Bankruptcy Code or applicable state law, whether such distribution is made in
cash, securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceeding for reorganization is pending shall
have jurisdiction (i) to apportion between the Trustee, such Securityholders
and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and the proceeds thereof, or (ii) in lieu of such apportionment, in
whole or in part, to give to the provisions of this paragraph due consideration
in determining the fairness of the distributions to be made to the Trustee,
such Securityholders and the holders of other indenture securities with respect
to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three month period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which
would have given rise to the obligation to account, if such Trustee
had continued as trustee, occurred after the beginning of such three
month period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or removal.
(b) There shall be excluded from the operation of this Section
6.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued
under any indenture or any security or securities having a maturity of
one year or more at the time of acquisition by the Trustee;
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(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture for the purpose
of preserving any property which shall at any time be subject to the
lien of this Indenture or of discharging tax liens or other prior
liens or encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business
in the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, fiscal agent or depositary, or
other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented or an indebtedness created as a result of
goods or securities sold in a cash transaction as defined in
subsection (c)(2) of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25 (a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Issuer; or
(6) the acquisition, ownership, acceptance or negotiation
of any drafts, bills of exchange, acceptances or obligations which
fall within the classification of self-liquidating paper as defined in
subsection (c) (3) of this Section.
(c) As used in this Section 6.13:
(1) the term "default" shall mean any failure to make
payment in full of the principal of or interest on any of the
Securities when and as such principal or interest becomes due and
payable;
(2) the term "cash transaction" shall mean any
transaction in which full payment for goods or securities sold is made
within seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or bankers and
payable upon demand;
(3) the term "self-liquidating paper" shall mean any
draft, bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Issuer for the purpose of
financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon the goods, wares or
merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Issuer arising from
the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation; and
(4) the term "Issuer" shall mean any obligor upon the
Securities.
SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is
made in this Indenture to the authentication and delivery of Securities of any
series by the Trustee or to 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 for such series and a Certificate of
Authentication executed on behalf of the Trustee by such Authenticating Agent.
Such Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America or of any state
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
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$50,000,000 (determined as provided in Section 6.9 with respect to the Trustee)
and subject to supervision or examination by federal or state authority.
Any corporation into which any 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 any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency
business of any Authenticating Agent, shall continue to be the Authenticating
Agent with respect to all series of Securities for which it served as
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to the
Issuer. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and to the
Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more series of Securities, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and the Issuer
shall provide notice of such appointment to all Holders of Securities of such
series in the manner and to the extent provided in Section 11.4. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent.
The Issuer agrees to pay to the Authenticating Agent for such series from time
to time reasonable compensation. The Authenticating Agent for the Securities
of any series shall have no responsibility or liability for any action taken by
it as such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Article
Seven.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such execution is by or
on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of the person
executing the same.
(b) The ownership of Securities shall be proved by the Security
register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or not
such Security shall be overdue and
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notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject
to the provisions of this Indenture, interest, if any, on such Security and for
all other purposes; and neither the Issuer nor the Trustee nor any agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of the Issuer or any other
obligor on the Securities with respect to which such determination is being
made shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only securities which a Responsible Officer of the Trustee actually knows are
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 Issuer or any other obligor upon the
Securities or any Affiliate of the Issuer or any other obligor on the
Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article Seven, revoke such action so
far as concerns such Security provided that such revocation shall not become
effective until three business days after such filing. Except as aforesaid any
such action taken by the Holder of any Security shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor or on registration
of transfer thereof, irrespective of whether or not any notation in regard
thereto is made upon any such Security. Any action taken by the Holders of the
percentage in aggregate principal amount of the Securities of any or all
series, as the case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon the Issuer, the Trustee and the
Holders of all the Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer
may, but shall not be obligated to, direct the Trustee to establish a record
date for the purpose of determining the Persons entitled to (i) waive any past
default with respect to the Securities of such series in accordance with
Section 5.7 of the Indenture, (ii) consent to any supplemental indenture in
accordance with Section 8.2 of the Indenture or (iii) waive compliance with any
term, condition or provision of any covenant hereunder. If a record date is
fixed, the Holders on such record date, or their duly designated proxies, and
any such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after such
record date; provided, however, that unless such waiver or consent is obtained
from the Holders, or duly designated proxies, of the requisite principal amount
of Outstanding Securities of such series prior to the date which is the 180th
day after such record date, any such waiver or consent previously given shall
automatically and without further action by any Holder be canceled and of no
further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action
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and may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of
1939 as in force at the date of the execution thereof) for one or more of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer pursuant
to Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of all or any series of
Securities (and if such covenants, restrictions, conditions or provisions are
to be for the protection of less than all series of Securities, stating that
the same are expressly being included solely for the protection of such
series), and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies available
to the Trustee upon such an Event of Default or may limit the right of the
Holders of a majority in aggregate principal amount of the Securities of such
series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may deem
necessary or desirable, provided, however, that no such action shall adversely
affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 2.3; and
(f) 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 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
6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Securities then Outstanding of any series affected by such supplemental
indenture, the Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of such
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series; provided, that no such supplemental indenture shall (a) extend the
stated final maturity of the principal of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest,
if any, thereon (or, in the case of an Original Issue Discount Security, reduce
the rate of accrual of original issue discount thereon), or reduce or alter the
method of computation of any amount payable on redemption, repayment or
purchase by the Issuer thereof (or the time at which any such redemption,
repayment or purchase may be made), or make the principal thereof (including
any amount in respect of original issue discount), or interest, if any, thereon
payable in any coin or currency other than that provided in the Securities or
in accordance with the terms of the Securities, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable
upon an acceleration of the maturity thereof pursuant to Section 5.1 or the
amount thereof provable in bankruptcy pursuant to Section 5.2, or impair or
affect the right of any Securityholder to institute suit for the payment
thereof or, if the Securities provide therefor, any right of repayment or
purchase at the option of the Securityholder, in each case without the consent
of the Holder of each Security so affected, or (b) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the
Holders of each Security so affected. No consent of any Holder of any Security
shall be necessary under this Section 8.2 to permit the Trustee and the Issuer
to execute supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant,
Event of Default 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 Holders of Securities of such series, with
respect to such covenant or provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as
aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Trustee shall give notice thereof to the Holders of then Outstanding Securities
of each series affected thereby, as provided in Section 11.4. Any failure of
the Issuer to give such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
and the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Issuer and the Holders of
Securities of each series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and shall be deemed to be part of the terms and conditions
of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall be entitled to receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article Eight complies
with the applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by
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such supplemental indenture or as to any action taken by Securityholders. If
the Issuer or the Trustee shall so determine, new Securities of any series so
modified as to conform, in the opinion of the Trustee and the Issuer, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Issuer, authenticated by the Trustee and delivered in
exchange for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms.
Subject to the provisions of Section 9.3, nothing contained in this Indenture
or in any of the Securities shall prevent any consolidation or merger of the
Issuer with or into any other corporation or corporations (whether or not
affiliated with the Issuer), or successive consolidations or mergers in which
the Issuer or its successor or successors shall be a party or parties, or shall
prevent any sale, lease, exchange or other disposition of all or substantially
all the property and assets of the Issuer to any other corporation (whether or
not affiliated with the Issuer) authorized to acquire and operate the same;
provided, however, and the Issuer hereby covenants and agrees, that any such
consolidation, merger, sale, lease, exchange or other disposition shall be upon
the conditions that (a) immediately after such consolidation, merger, sale,
lease, exchange or other disposition of the corporation (whether the Issuer or
such other corporation) formed by or surviving any such consolidation or
merger, or to which such sale, lease, exchange or other disposition shall have
been made, shall not be in default in the performance or observance of any of
the terms, covenants and conditions of this Indenture to be kept or performed
by the Issuer; (b) the corporation (if other than the Issuer) formed by or
surviving any such consolidation or merger, or to which such sale, lease,
exchange or other disposition shall have been made, shall be a corporation
organized under the laws of the United States of America, any state thereof or
the District of Columbia; and (c) the due and punctual payment of the principal
of and interest, if any, on all the Securities, according to their tenor, and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Issuer, shall be expressly
assumed, by supplemental indenture satisfactory in form to the Trustee executed
and delivered to the Trustee, by the corporation (if other than the Issuer)
formed by such consolidation, or into which the Issuer shall have been merged,
or by the corporation which shall have acquired or leased such property.
SECTION 9.2 Securities to be Secured in Certain Events. If, upon
any such consolidation, merger, or upon any such sale, lease, exchange or other
disposition, or upon any acquisition by the Issuer by purchase or otherwise of
all or any part of the properties of any other corporation, any Principal
Property owned by the Issuer or a Restricted Subsidiary immediately prior
thereto would thereupon become subject to any mortgage, security interest,
pledge, lien or encumbrance, not permitted by Section 3.6 hereof, the Issuer,
prior to such consolidation, merger, sale, lease, exchange or other disposition
or acquisition, will by indenture supplemental hereto secure the due and
punctual payment of the principal of and interest, if any, on the Securities
then outstanding (equally and ratably, or with such other relative priority
specified in Section 3.6, with any other indebtedness of or guaranteed by the
Issuer then entitled thereto) by a direct lien on such Principal Property,
together with any other properties and assets of the Issuer or of any such
Restricted Subsidiary, whichever shall be the owner of any such Principal
Property, which would thereupon become subject to any such mortgage, security
interest, pledge, lien or encumbrance, prior to all liens other than any
theretofore existing thereon.
SECTION 9.3 Successor Corporation to be Substituted. In case of
any such consolidation or merger or any sale, conveyance or lease of all or
substantially all of the property of the Issuer and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and interest, if any, on all of the Securities and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Issuer, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein as the party of the first part, and the Issuer (including any
intervening successor to the Issuer which shall have become the obligor
hereunder) shall be relieved of any further obligation under this Indenture and
the Securities; provided, however, that in the case of a sale, lease, exchange
or other disposition of the property and assets of the Issuer (including any
such intervening successor), the Issuer (including any such intervening
successor) shall continue to be liable on its obligations under this Indenture
and the Securities to the extent, but only to the extent, of liability to pay
the principal of and interest, if any, on the Securities at the time, places
and rate prescribed in this Indenture
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and the Securities. Such successor corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of the Issuer, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Issuer and delivered to the Trustee; and, upon the order of
such successor corporation instead of the Issuer and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation or merger or any sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the Issuer, such changes in phraseology and form (but not in
substance) may be made in the Securities, thereafter to be issued, as may be
appropriate.
SECTION 9.4 Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, may receive an Officers' Certificate and
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, lease, exchange or other disposition and any such assumption complies
with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture.
(A) If at any time (a) the Issuer shall have paid or
caused to be paid the principal of and interest, if any, on all the
Securities Outstanding (other than Securities which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.9) as and when the same shall have become due
and payable, or (b) the Issuer shall have delivered to the Trustee for
cancellation all Securities theretofore authenticated (other than
Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.9); and if, in any such
case, the Issuer shall also pay or cause to be paid all other sums
payable hereunder by the Issuer, then this Indenture shall cease to be
of further effect, and the Trustee, on demand of the Issuer
accompanied by an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent relating to the
satisfaction and discharge contemplated by this provision have been
complied with, and at the cost and expense of the Issuer, shall
execute proper instruments acknowledging such satisfaction and
discharging this Indenture. The Issuer agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly
incurred, and to compensate the Trustee for any services thereafter
reasonably and properly rendered, by the Trustee in connection with
this Indenture or the Securities.
(B) If at any time (a) the Issuer shall have paid or
caused to be paid the principal of, premium, if any, and interest, if
any, on all the Securities of any series Outstanding (other than
Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9) as
and when the same shall have become due and payable, or (b) the Issuer
shall have delivered to the Trustee for cancellation all Securities of
any series theretofore authenticated (other than any Securities of
such series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.9), or (c) in the case
of any series of Securities with respect to which the exact amount
described in clause (ii) below can be determined at the time of making
the deposit referred to in such clause (ii), (i) all the Securities of
such series not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due
and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption, and (ii) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee as funds in
trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of Securities of such series, cash in an
amount (other than moneys repaid by the Trustee or any paying agent to
the Issuer in accordance with Section 10.4) or direct obligations of
the United States of America, backed by its full faith and credit
("U.S. Government Obligations"), maturing as to principal and
interest, if any,
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at such times and in such amounts as will insure the availability of
cash, or a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay
(A) the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal of,
premium, if any, or interest, if any, is due and payable, and (B) any
mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture and
the Securities of such series; then the Issuer shall be deemed to have
paid and discharged the entire indebtedness on all the Securities of
such series on the date of the deposit referred to in clause (ii)
above and the provisions of this Indenture with respect to the
Securities of such series shall no longer be in effect (except, in the
case of clause (c) of this Section 10.1(B), as to (i) rights of
registration of transfer and exchange of Securities of such series,
(ii) rights of substitution of mutilated, defaced, destroyed, lost or
stolen Securities of such series, (iii) rights of Holders of
Securities of such series to receive payments of principal thereof and
premium, if any, and interest, if any, thereon upon the original
stated due dates therefor (but not upon acceleration), and remaining
rights of the Holders of Securities of such series to receive
mandatory sinking fund payments thereon, if any, when due, (iv) the
rights, obligations, duties and immunities of the Trustee hereunder,
(v) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them and (vi) the obligations of
the Issuer under Section 3.2 with respect to Securities of such
series) and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging the same.
(C) The following provisions shall apply to the
Securities of each series unless specifically otherwise provided in a
Board Resolution, Officers' Certificate or indenture supplemental
hereto provided pursuant to Section 2.3. In addition to discharge of
the Indenture pursuant to the next preceding paragraph, in the case of
any series of Securities with respect to which the exact amount
described in subparagraph (a) below can be determined at the time of
making the deposit referred to in such subparagraph (a), the Issuer
shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of
the deposit referred to in subparagraph (a) below, and the provisions
of this Indenture with respect to the Securities of such series shall
no longer be in effect (except as to (i) rights of registration of
transfer and exchange of Securities of such series, (ii) substitution
of mutilated, defaced, destroyed, lost or stolen Securities of such
series, (iii) rights of Holders of Securities of such series to
receive payments of principal thereof, premium, if any, and interest,
if any, thereon upon the original stated due dates therefor (but not
upon acceleration), and remaining rights of the Holders of Securities
of such series to receive mandatory sinking fund payments, if any,
(iv) the rights, obligations, duties and immunities of the Trustee
hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them and (vi) the obligations of
the Issuer under Section 3.2 with respect to Securities of such
series) and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging the same, if
(a) with reference to this provision the Issuer
has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit
of the Holders of Securities of such series (i) cash in an
amount, or (ii) U.S. Government Obligations, maturing as to
principal and interest, if any, at such times and in such
amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal of, premium, if any, and
interest, if any, on all Securities of such series on each
date that such principal or interest, if any, is due and
payable, and (B) any mandatory sinking fund payments on the
dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such
series;
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(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agreement or
instrument to which the Issuer is a party or by which it is
bound; and
(c) the Issuer has delivered to the Trustee an
Opinion of Counsel based on the fact that (x) the Issuer has
received from, or there has been published by, the Internal
Revenue Service a ruling or (y), since the date hereof, there
has been a change in the applicable United States federal
income tax law, in either case to the effect that, and such
opinion shall confirm that, the Holders of the Securities of
such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income
tax on the same amount and in the same manner and at the same
times, as would have been the case if such deposit, defeasance
and discharge had not occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 shall be held
in trust, and such moneys and all moneys from such U.S. Government Obligations
shall be applied by it to the payment, either directly or through any paying
agent (including the Issuer acting as its own paying agent), to the Holders of
the particular Securities of such series for the payment or redemption of which
such moneys and U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest,
if any, but such moneys and U.S. Government Obligations need not be segregated
from other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under the
provisions of this Indenture with respect to such series of Securities shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest, if any, on
any Security of any series and not applied but remaining unclaimed for two
years after the date upon which such principal or interest, if any, shall have
become due and payable, shall, upon the written request of the Issuer and
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for
such series or such paying agent, and the Holder of the Securities of such
series shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, thereafter look only to the
Issuer for any payment which such Holder may be entitled to collect, and all
liability of the Trustee or any paying agent with respect to such moneys shall
thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The
Issuer shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or in
any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of the
Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
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SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Holders of Securities. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto and their successors and the Holders of
the Securities, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer, or as required pursuant to the Trust Indenture
Act of 1939, may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee)
to Seagull Energy Corporation, 1001 Fannin, Suite 1700, Houston, Texas 77002,
Attention: Chairman of the Board. Any notice, direction, request or demand by
the Issuer or any Holder of Securities to or upon the Trustee shall be deemed
to have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the Issuer)
to The Bank of New York, 101 Barclay Street, Floor 21 West, New York, New York
10286, Attention: Corporate Trust Trustee Administration.
Where this Indenture provides for notice to Holders of Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
entitled thereto, at his last address as it appears in the Security register.
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.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be reasonably satisfactory to
the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture (other than
a certificate provided pursuant to Section 4.3(d)) and delivered to the Trustee
with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such certificate
or opinion has read such covenant or condition, (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based, (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion as to whether
or not such covenant or condition has been complied with, and (d) a statement
as to whether or not, in the opinion of such person, such condition or covenant
has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any
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certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters, information with respect to which is in the
possession of the Issuer, upon the certificate, statement or opinion of or
representations by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of principal of or interest, if any, on the Securities of
any series or the date fixed for redemption, purchase or repayment of any such
Security shall not be a Business Day, then payment of interest, if any, or
principal need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date of maturity
or the date fixed for redemption, purchase or repayment, and, in the case of
payment, no interest shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND
FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 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.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Issuer shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear in the
Security register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the Holder of any Security of a series designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
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The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, the CUSIP number relating to such Securities, that payment
will be made upon presentation and surrender of such Securities, that such
redemption is pursuant to the mandatory or optional sinking fund, or both, if
such be the case, that interest, if any, (or, in the case of Original Issue
Discount Securities, original issue discount) accrued to the date fixed for
redemption will be paid as specified in such notice and that on and after said
date interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a 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 date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section 12.2, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.5) an amount of money sufficient to redeem on the redemption date all the
Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest, if any, to the date fixed for
redemption. The Issuer will deliver to the Trustee at least 45 days prior to
the date fixed for redemption (unless a shorter notice period shall be
satisfactory to the Trustee) an Officers' Certificate stating the aggregate
principal amount of Securities to be redeemed. In case of a redemption at the
election of the Issuer prior to the expiration of any restriction on such
redemption, the Issuer shall deliver to the Trustee, prior to the giving of any
notice of redemption to Holders pursuant to this Section, an Officers'
Certificate stating that such restriction has been complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed. Securities may be redeemed in part
in multiples equal to the minimum authorized denomination for Securities of
such series or any multiple thereof. The Trustee shall promptly notify the
Issuer in writing of the Securities of such series selected for redemption and,
in the case of any Securities of such series 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 of any series shall relate, in the case of any
Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place or places stated in such notice at the applicable
redemption price, together with interest, if any, accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest, if
any, accrued to said date) interest (or, in the case of Original Issue Discount
Securities, original issue discount) on the Securities or portions of
Securities so called for redemption shall cease to accrue, and such Securities
shall cease from and after the date fixed for redemption (unless an earlier
date shall be specified in a Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3 by or
pursuant to which the form and terms of the Securities of such series were
established) except as provided in Sections 6.5 and 10.4, to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall have no
right in respect of such Securities except the right to receive the redemption
price thereof and unpaid interest to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be paid
and redeemed by the Issuer at the applicable redemption price, together with
interest, if any, accrued thereon to the date fixed for redemption; provided
that payment of interest, if any, becoming due on or prior to the date fixed
for redemption shall be payable to the Holders of Securities registered as such
on the relevant record date subject to the terms and provisions of Sections 2.3
and 2.7 hereof.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
of interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officers' Certificate delivered to the Trustee at least 45 days
prior to the last date on which notice of redemption may be given as being
owned of record and beneficially by, and not pledged or hypothecated by either
(a) the Issuer, or (b) a Person specifically identified in such written
statement as an Affiliate of the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section 12.5,
or (c) receive credit for Securities of such series (not previously so
credited) redeemed by the Issuer through any optional redemption provision
contained in the terms of such series. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (a) specifying the portion of the mandatory sinking fund payment to
be satisfied by payment of cash and the portion to be satisfied by credit of
Securities of such series and the basis for such credit, (b) stating that none
of the Securities of such series to be so credited has theretofore been so
credited, (c) stating that no defaults in the payment of interest or Events of
Default with respect to such series have occurred (which have not been waived
or cured or otherwise ceased to exist) and are continuing, and (d) stating
whether or not the Issuer intends to exercise its right to make an optional
sinking fund payment with respect to such series and, if so, specifying the
amount of such optional sinking fund payment which the Issuer intends to pay on
or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officers' Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officers'
Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer
shall become unconditionally obligated to make all the cash payments or
payments therein referred to, if any, on or before the next succeeding sinking
fund payment date. Failure of the Issuer, on or before any such 60th day, to
deliver such Officers' Certificate and Securities (subject to the parenthetical
clause in the second preceding sentence) specified in this paragraph, if any,
shall not constitute a default but shall constitute, on and as of such date,
the irrevocable election of the Issuer (i) that the mandatory sinking fund
payment for such series due on the next succeeding sinking fund payment date
shall be paid entirely in cash without the option to deliver or credit
Securities of such series in respect thereof, and (ii) that the Issuer will
make no optional sinking fund payment with respect to such series as provided
in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000, or a lesser sum if the Issuer shall so request with respect to
the Securities of any particular
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series, such cash shall be applied on the next succeeding sinking fund payment
date to the redemption of Securities of such series at the sinking fund
redemption price together with accrued interest, if any, to the date fixed for
redemption. If such amount shall be $50,000 or less and the Issuer makes no
such request, then it shall be carried over until a sum in excess of $50,000 is
available. The Trustee shall select, in the manner provided in Section 12.2,
for redemption on such sinking fund payment date a sufficient principal amount
of Securities of such series to absorb said cash, as nearly as may be, and
shall (if requested in writing by the Issuer) inform the Issuer of the serial
numbers of the Securities of such series (or portions thereof) so selected.
The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it
shall so request the Trustee in writing) shall cause notice of redemption of
the Securities of such series to be given in substantially the manner provided
in Section 12.2 (and with the effect provided in Section 12.3) for the
redemption of Securities of such series in part at the option of the Issuer.
The amount of any sinking fund payments not so applied or allocated to the
redemption of Securities of such series shall be added to the next cash sinking
fund payment for such series and, together with such payment, shall be applied
in accordance with the provisions of this Section 12.5. Any and all sinking
fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such series
shall be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest, if any, on, the
Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest,
if any, accrued to the date fixed for redemption on Securities to be redeemed
on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that it
shall have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such default or Event of Default shall occur, and any moneys
thereafter paid into the sinking fund, shall, during the continuance of such
default or Event of Default, be deemed to have been collected under Article
Five and held for the payment of all such Securities. In case such Event of
Default shall have been waived as provided in Section 5.7 or the default cured
on or before the 60th day preceding the sinking fund payment date in any year,
such moneys shall thereafter be applied on the next succeeding sinking fund
payment date in accordance with this Section to the redemption of such
Securities.
48
<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of September 1, 1997.
SEAGULL ENERGY CORPORATION
By:
---------------------------
Title:
---------------------------
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------
Title:
---------------------------
49
<PAGE> 1
Exhibit 4.3
================================================================================
SEAGULL ENERGY CORPORATION
AND
THE BANK OF NEW YORK
______________
Senior Subordinated Indenture
Dated as of September 1, 1997
================================================================================
<PAGE> 2
CROSS REFERENCE SHEET
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of September 1, 1997, between SEAGULL ENERGY CORPORATION and The Bank of New
York, Trustee:
<TABLE>
<CAPTION>
Section of the Act Section of Indenture
- ------------------ --------------------
<S> <C>
310(a)(1), (2) and (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(a) and (c)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(b) and (c)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv),
(v), (vi) and (vii)
313(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
</TABLE>
_________________
<PAGE> 3
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
<TABLE>
<S> <C>
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ENSTAR Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
original issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
original issue discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
principal amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Principal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Sale and Leaseback Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Senior Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
vice president . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
i
<PAGE> 4
ARTICLE TWO
SECURITIES
<TABLE>
<S> <C> <C>
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.3 Amount Unlimited, Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Authentication and Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.7 Denomination and Date of Securities; Payments of Interest . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.8 Registration Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.10 Cancellation of Securities; Disposition Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.2 Offices for Notices and Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.6 Restriction on Creation of Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.7 Restriction on Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.8 Limitation on Issuance of Certain Other Subordinated Indebtedness . . . . . . . . . . . . . . . . . 17
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders . . . . . . . . . 17
SECTION 4.2 Preservation and Disclosure of Securityholders Lists . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.3 Application of Moneys Collected by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.6 Remedies Cumulative and Continuing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by Majority of Securityholders . . . . . . . . . . . . 24
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
ii
<PAGE> 5
ARTICLE SIX
CONCERNING THE TRUSTEE
<TABLE>
<S> <C> <C>
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default . . . . . . . . . . . . 24
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds
Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.4 Trustee and Agents May Hold Securities; Collections, etc. . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim . . . . . . . . . . . . . . . . . . 26
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc. . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.9 Persons Eligible for Appointment as Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . . . . . . . . 33
SECTION 6.13 Preferential Collection of Claims Against the Issuer . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities . . . . . . . . . . . . . . . . . . . 36
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.2 Supplemental Indentures with Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.6 Subordination Unimpaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.2 Securities to be Secured in Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.3 Successor Corporation to be Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.4 Opinion of Counsel to be Given Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities . . . . . . . . . . . . . . . . 42
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years . . . . . . . . . . . . . 43
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>
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<PAGE> 6
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
<TABLE>
<S> <C> <C>
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities . . . . . . . . . 43
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities . . . . . . . . . . . . . . . . . . 43
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained Therein . . . . . . . . . 44
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939 . . . . . . . . . . . . . . 44
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 12.3 Payment of Securities Called for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption . . . . . . . . . . . 46
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 13.2 Reliance on Certificate of Liquidating Agent; Further Evidence as to Ownership of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.3 Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.4 Disputes with Holders of Certain Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.5 Trustee Not Charged with Knowledge of Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.6 Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.7 Rights of Trustee as Holder of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.8 Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.9 Subordination Rights Not Impaired by Acts or Omissions of the Issuer or Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
iv
<PAGE> 7
THIS SENIOR SUBORDINATED INDENTURE, dated as of September 1, 1997
between SEAGULL ENERGY CORPORATION, a Texas corporation (the "Issuer"), and The
Bank of New York, a New York banking corporation, as trustee (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issuance from time to time
of its unsecured senior subordinated debentures, notes or other evidences of
indebtedness to be issued in one or more series (the "Securities") up to such
principal amount or amounts as may from time to time be authorized in
accordance with the terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been undertaken and completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders (as hereinafter defined) thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Securities as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any
indenture supplemental hereto the following terms shall have the respective
meanings specified in this Section 1.1 (except as otherwise expressly provided
or unless the context otherwise clearly requires). All other terms used in
this Indenture that are defined in the Trust Indenture Act of 1939, including
terms defined therein by reference to the Securities Act of 1933, as amended,
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of this Indenture (except as
herein otherwise expressly provided or unless the context otherwise clearly
requires).
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation.
The words "herein", "hereof" 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. The expressions "date of this
Indenture", "date hereof", "date as of which this Indenture is dated" and "date
of execution and delivery of this Indenture" and other expressions of similar
import refer to the effective date of the original execution and delivery of
this Indenture, viz. September 1, 1997.
The terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular.
"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 ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
<PAGE> 8
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted or
consented to by the Board of Directors and to be in full force and effect.
"Business Day" means, with respect to any Security, a day that (a) in
the Place of Payment (or in any of the Places of Payment, if more than one) in
which amounts are payable, as specified in the form of such Security, and (b)
in the city in which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or regulation to
close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution and delivery of this Indenture
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act of 1939, then the body performing such duties on
such date.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of the Issuer and
its Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
and expense and other like intangibles, all in accordance with generally
accepted accounting principles consistently applied.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located in New York, New York.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 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" as used with respect to the Securities
of any such series shall mean the Depositary with respect to the Global
Securities of such series.
"ENSTAR Alaska" means (i) the division of the Issuer known on the date
of this Indenture as ENSTAR Natural Gas Company, which owns on the date of this
Indenture the gas distribution system in south-central Alaska, and (ii) Alaska
Pipeline Company, an Alaska corporation and a Subsidiary of the Issuer, in each
case together with successors and assigns.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depositary for such series in accordance
with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the person in whose name such Security
is registered in the security register kept by the Issuer for that purpose in
accordance with the terms hereof.
"Indebtedness" means, with respect to any Person,
(a) (i) the principal of and premium, if any, and interest, if
any, on indebtedness for money borrowed of such Person, indebtedness of such
Person evidenced by bonds, notes, debentures or similar obligations, and any
guaranty by such Person of any indebtedness for money borrowed or indebtedness
evidenced by bonds, notes, debentures or similar obligations of any other
Person, whether any such indebtedness or guaranty is outstanding on the date of
this
2
<PAGE> 9
Indenture or is thereafter created, assumed or incurred, (ii) the principal of
and premium, if any, and interest, if any, on indebtedness for money borrowed,
incurred, assumed or guaranteed by such Person in connection with the
acquisition by it or any of its subsidiaries of any other businesses,
properties or other assets and (iii) lease obligations which such Person
capitalizes in accordance with Statement of Financial Accounting Standards No.
13 promulgated by the Financial Accounting Standards Board or such other
generally accepted accounting principles as may be from time to time in effect;
(b) any other indebtedness of such Person, including any
indebtedness representing the balance deferred and unpaid of the purchase price
of any property or interest therein, and any guaranty, endorsement or other
contingent obligation of such Person in respect of any indebtedness of another
that is outstanding on the date of this Indenture or is thereafter created,
assumed or incurred by such Person;
(c) obligations of such Person under interest rate, commodity or
currency swaps, caps, collars, options and similar arrangements;
(d) obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction; and
(e) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as Indebtedness in
clauses (a) through (d) above.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented or both, including, for all purposes of this instrument and any
such supplement, the provisions of the Trust Indenture Act of 1939 that are
deemed to be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
The term "interest" means, when used with respect to non-interest
bearing Securities (including, without limitation, any Original Issue Discount
Security that by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated maturity, upon acceleration or redemption or otherwise) or
after the date, if any, on which the Issuer becomes obligated to acquire a
Security, whether upon conversion, by purchase or otherwise.
"Issuer" means (except as otherwise provided in Section 6.8) Seagull
Energy Corporation, a Texas corporation, and, subject to Article Nine, its
successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president or any vice president of the Issuer.
"Officers' Certificate", when used with respect to the Issuer, means a
certificate signed by the chairman of the Board of Directors, the president, or
any vice president and by the treasurer, any assistant treasurer, the
controller, any assistant controller, the secretary or any assistant secretary
of the Issuer. Each such certificate shall include the statements provided for
in Section 11.5 if and to the extent required by the provisions of such Section
11.5. One of the officers signing an Officers' Certificate given pursuant to
Section 4.3 shall be the principal executive, financial or accounting officer
of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the chief
counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each
such opinion shall include the statements provided for in Section 11.5, if and
to the extent required by the provisions of such Section 11.5.
The term "original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
3
<PAGE> 10
The term "original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt security
(as set forth in the case of an Original Issue Discount Security on the face of
such Security).
"Original Issue Discount Security" means any Security that 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 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when used
with reference to Securities, shall, subject to the provisions of Section 7.4,
mean, as of any particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities (other than Securities of any series as to which
the provisions of Article Ten hereof shall not be applicable), or portions
thereof, for the payment or redemption of which moneys or U.S. Government
Obligations (as provided for in Section 10.1) in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other
than the Issuer) or shall have been set aside, segregated and held in trust by
the Issuer for the Holders of such Securities (if the Issuer shall act as its
own paying agent), provided that, if such Securities, or portions thereof, are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the Trustee
shall have been made for giving such notice; and
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered pursuant to
the terms of Section 2.9 (except with respect to any such Security as to which
proof satisfactory to the Trustee is presented that such Security is held by a
person in whose hands such Security is a legal, valid and binding obligation of
the Issuer).
In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding for such purposes shall be the portion of the
principal amount thereof that would be due and payable as of the date of such
determination (as certified by the Issuer to the Trustee) upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Issuer or its agents upon the issuance of
such Securities.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust, estate,
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 interest, if any,
on the Securities of such series are payable as determined in accordance with
Section 2.3.
The term "principal" of a debt security, including any Security, means
the amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Issuer, upon any purchase or exchange at the option of the Issuer
or the holder of such debt security and upon any acceleration of the maturity
of such debt security).
The term "principal amount" of a debt security, including any
Security, means the principal amount as set forth on the face of such debt
security.
4
<PAGE> 11
"Principal Property" means any real property, manufacturing plant,
processing plant, pipeline, office building, warehouse or other physical
facility, or any other like depreciable or depletable asset of the Issuer or
any Restricted Subsidiary whether owned at September 1, 1997 or thereafter
acquired (other than any facility thereafter acquired for the control or
abatement of atmospheric pollutants or contaminants or water, noise, odor or
other pollution) which in the opinion of the Board of Directors is of material
importance to the total business conducted by the Issuer and its Restricted
Subsidiaries, as a whole; provided, however, that any such property shall not
be deemed a Principal Property if such property does not have a fair value in
excess of 3% of the total assets included on a consolidated balance sheet of
the Issuer and its Restricted Subsidiaries prepared in accordance with
generally accepted accounting principles consistently applied.
The term "record date" shall have the meaning set forth in Section
2.7.
"Responsible Officer", when used with respect to the Trustee, means
any officer assigned by the Trustee to administer its corporate trust matters.
"Restricted Subsidiary" means (a) any Subsidiary other than an
Unrestricted Subsidiary, and (b) any Subsidiary which was an Unrestricted
Subsidiary but which, subsequent to the date hereof, is designated by the
Issuer (by certified resolution of the Board of Directors delivered to the
Trustee) to be a Restricted Subsidiary; provided, however, that the Issuer may
not designate any such Subsidiary to be a Restricted Subsidiary if the Issuer
would thereby breach any covenant or agreement herein contained (on the
assumptions that any outstanding Indebtedness of such Subsidiary was incurred
at the time of such designation and that any Sale and Leaseback Transaction to
which such Subsidiary is then a party was entered into at the time of such
designation).
"Sale and Leaseback Transaction" shall have the meaning set forth in
Section 3.7.
"Secured Debt" means indebtedness for money borrowed by the Issuer or
a Restricted Subsidiary and any other indebtedness of the Issuer or a
Restricted Subsidiary on which interest is paid or payable (other than
indebtedness owed by a Restricted Subsidiary to the Issuer, by a Restricted
Subsidiary to another Restricted Subsidiary or by the Issuer to a Restricted
Subsidiary), that in any such case is secured by (a) a mortgage or other lien
on any Principal Property of the Issuer or a Restricted Subsidiary, or (b) a
pledge, lien or other security interest on any shares of stock or indebtedness
of a Restricted Subsidiary, or (c) in the case of any such indebtedness of the
Issuer, a guaranty by any Restricted Subsidiary. The amount of Secured Debt at
any time outstanding shall be the amount then owing thereon by the Issuer or a
Restricted Subsidiary.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture or, as the
case may be, Securities that have been authenticated and delivered pursuant to
this Indenture.
"Senior Indebtedness" means Indebtedness of the Issuer outstanding at
any time except (a) any Indebtedness as to which, by the terms of the
instrument creating or evidencing the same, it is provided that such
Indebtedness is not senior in right of payment to the Securities, (b) the
Securities, (c) any Indebtedness of the Issuer to a wholly-owned subsidiary of
the Issuer, (d) interest accruing after the filing of a petition initiating any
proceeding referred to in Sections 5.1(e) and 5.1(f) unless such interest is an
allowed claim enforceable against the Issuer in a proceeding under federal or
state bankruptcy laws and (e) trade payables.
"Senior Subordinated Indebtedness" means the Securities, the Issuer's
8 5/8% Senior Subordinated Notes due 2005 issued pursuant to the Senior
Subordinated Indenture dated July 15, 1993 between the Issuer and The Bank of
New York, as trustee, and any other Indebtedness of the Issuer that ranks pari
passu with the Securities. Any Indebtedness of the Issuer that is subordinate
or junior by its terms in right of payment to any other Indebtedness of the
Issuer shall be subordinate to Senior Subordinated Indebtedness unless the
instrument creating or evidencing the same or pursuant to which the same is
outstanding specifically provides that such Indebtedness (i) is to rank pari
passu with other Senior Subordinated Indebtedness and (ii) is not subordinated
by its terms to any Indebtedness of the Issuer which is not Senior
Indebtedness.
5
<PAGE> 12
"Subordinated Indebtedness" means the Securities, any other Senior
Subordinated Indebtedness and any other Indebtedness that is subordinate or
junior in right of payment to Senior Indebtedness.
"Subsidiary" means any corporation of which the Issuer, or the Issuer
and one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own voting securities entitling any one or more of the Issuer and
its Subsidiaries to elect a majority of the directors, either at all times or,
so long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990, as in force at the date as of which this
Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and, if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any series
shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary acquired or
organized after the date hereof, provided, however, that such Subsidiary shall
not be a successor, directly or indirectly, to any Restricted Subsidiary, and
(b) any Subsidiary whose principal business and assets are located outside the
United States of America, its territories and possessions and Canada or are
located in Puerto Rico, and (c) any Subsidiary the principal business of which
consists of financing or assisting in financing the acquisition or disposition
of products of the Issuer or a Subsidiary by dealers, distributors or other
customers, and (d) any Subsidiary the principal business of which is owning,
leasing, dealing in or developing real property, and (e) any Subsidiary
substantially all the assets of which consist of stock or other securities of a
Subsidiary or Subsidiaries of the character described in clauses (a) through
(d) of this paragraph, unless and until such Subsidiary shall have been
designated to be a Restricted Subsidiary pursuant to clause (b) of the
definition of "Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
The term "vice president," when used with respect to the Issuer or the
Trustee, means any vice president, regardless of whether designated by a number
or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall
be substantially in such form (not inconsistent with this Indenture) as shall
be established by or pursuant to one or more Board Resolutions (as set forth in
a Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officers' Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have imprinted or
otherwise reproduced thereon such legend or legends or endorsements, not
inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto, or with
any rules of any securities exchange or to conform to general usage, all as may
be determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
The definitive Securities 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 as evidenced by their
execution of such Securities.
6
<PAGE> 13
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be
substantially as follows:
This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.
The Bank of New York, as Trustee
By
----------------------------------
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an alternate
Certificate of Authentication which shall be substantially as follows:
This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.
The Bank of New York, as Trustee
By
----------------------------------
as Authenticating Agent
By
----------------------------------
Authorized Signatory
SECTION 2.3 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 and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series, but all Securities issued hereunder shall be subordinate and
junior in right of payment, to the extent and in the manner set forth in
Article Thirteen, to all Senior Indebtedness. There shall be established in or
pursuant to one or more Board Resolutions (and, to the extent established
pursuant to rather than set forth in a Board Resolution, in an Officers'
Certificate detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance of Securities of
any series:
(1) the designation of the Securities of the series,
which shall distinguish the Securities of such series from the
Securities of all other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that 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 the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or
12.3);
(3) the date or dates on which the principal 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, the date or dates from which any
such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(5) the place or places where and the manner in which the
principal of and interest, if any, on Securities of the series shall
be payable (if other than as provided in Section 3.2) and the office
or agency for the Securities of the series maintained by the Issuer
pursuant to Section 3.2;
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(6) the right, if any, of the Issuer to redeem, purchase
or repay Securities of the series, in whole or in part, at its option
and the period or periods within which, the price or prices (or the
method by which such price or prices shall be determined or both) at
which, the form or method of payment therefor if other than in cash
and any terms and conditions upon which and the manner in which (if
different from the provisions of Article Twelve) Securities of the
series may be so redeemed, purchased or repaid, in whole or in part,
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series in whole or in part
pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(9) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as
Global Securities;
(11) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(12) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with respect
to the Securities of such series;
(13) any deleted, modified or additional events of
default, remedies or covenants with respect to the Securities of such
series;
(14) whether the provisions of Section 10.1(C) will be
applicable to Securities of such series;
(15) any provision relating to the issuance of Securities
of such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which such
original issue discount shall accrue, if any, and the date or dates
from or to which or period or periods during which such original issue
discount shall accrue at such rate or rates);
(16) if the amounts of payments of principal of and
interest on the Securities of such series are to be determined with
reference to an index, the manner in which such amounts shall be
determined; and
(17) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution, such Officers' Certificate or in any such
indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred to above
with respect to Securities of any series filed with the Trustee on or before
the initial issuance of the Securities of such series shall be incorporated
herein by reference with respect to Securities of such series and shall
thereafter be deemed to be a part of the Indenture for all
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purposes relating to Securities of such series as fully as if such Board
Resolution or Officers' Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities. The
Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication together with the applicable documents referred to
below in this Section 2.4, and the Trustee shall thereupon authenticate and
deliver such Securities to, or upon the order of, the Issuer (contained in the
Issuer Order referred to below in this Section 2.4) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be specified
from time to time by an Issuer Order. The maturity date, original issue date,
interest rate, if any, and any other terms of the Securities of such series
shall be determined by or pursuant to such Issuer Order and procedures. If
provided for in such procedures and agreed to by the Trustee, such Issuer Order
may authorize authentication and delivery pursuant to oral instructions from
the Issuer or its duly authorized agent, which instructions shall be promptly
confirmed in writing. In authenticating the Securities of such series and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive (in the case of
subparagraphs (2), (3) and (4) below only at or before the time of the first
request of the Issuer to the Trustee to authenticate Securities of such series)
and (subject to Section 6.1) shall be fully protected in relying upon, unless
and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions if the Securities of such series
are not to be delivered to the Issuer, provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such Issuer
Order may be delivered by the Issuer to the Trustee prior to the
delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities of
such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Issuer
or its duly authorized agent or agents, which oral instructions shall
be promptly confirmed in writing and (e) after the original issuance
of the first Security of such series to be issued, any separate
request by the Issuer that the Trustee authenticate Securities of such
series for original issuance will be deemed to be a certification by
the Issuer that it is in compliance with all conditions precedent
provided for in this Indenture relating to the authentication and
delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3 by
or pursuant to which the forms and terms of the Securities of such
series were established;
(3) an Officers' Certificate setting forth the form or
forms and terms of the Securities stating that the form or forms and
terms of the Securities have been established pursuant to Sections 2.1
and 2.3 and comply with this Indenture and covering such other matters
as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of
Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the Securities of such
series have been duly authorized and established in conformity
with the provisions of this Indenture;
(b) in the case of an underwritten offering, the
terms of the Securities of such series have been duly
authorized and established in conformity with the provisions
of this Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such series
have been established pursuant to a Board Resolution, an
Officers' Certificate or a supplemental indenture in
accordance with this Indenture, and when such other terms as
are to be established pursuant to procedures set forth in an
Issuer Order shall have been established, all such terms will
have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this
Indenture;
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(c) when the Securities of such series have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered
to and duly paid for by the purchasers thereof, they will have
been duly issued under this Indenture and will be valid and
legally binding obligations of the Issuer, enforceable in
accordance with their respective terms, and will be entitled
to the benefits of this Indenture; and
(d) the execution and delivery by the Issuer of,
and the performance by the Issuer of its obligations under,
the Securities of such series will not contravene any
provision of applicable law or the articles of incorporation
or bylaws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as one
enterprise, or, to such counsel's knowledge after the inquiry
indicated therein, any judgment, order or decree of any
governmental agency or any court having jurisdiction over the
Issuer or any Subsidiary, and no consent, approval or
authorization of any governmental body or agency is required
for the performance by the Issuer of its obligations under the
Securities, except such as are specified and have been
obtained and such as may be required by the securities or blue
sky laws of the various states in connection with the offer
and sale of the Securities.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the State of Texas
and the federal law of the United States, upon opinions of other counsel
(copies of which shall be delivered to the Trustee), who shall be counsel
reasonably satisfactory to the Trustee, in which case the opinion shall state
that such counsel believes that both such counsel and the Trustee are entitled
so to rely. Such counsel may also state that, insofar as such opinion involves
factual matters, such counsel has relied, to the extent such counsel deems
proper, upon certificates of officers of the Issuer and its Subsidiaries and
certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section 2.4 if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
by the Issuer or if the Trustee in good faith by its board of directors or
board of trustees, executive committee or a trust committee of directors or
trustees 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 the Securities, this
Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section 2.4 and the Issuer Order with respect to such series,
authenticate and deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount
of all of the Securities of such series to be issued in the form of Global
Securities and not yet canceled, (ii) shall be registered in the name of the
Depositary for such Global 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 instructions, and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive registered form, this Security
may not be transferred except as a whole by the Depositary to the 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."
Each Depositary designated pursuant to Section 2.3 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, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be
signed on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one of
its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
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minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities
as shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized signatories, or its Authenticating Agent, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificate by the Trustee or its Authenticating Agent upon
any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture. Each
reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form
in denominations established as contemplated by Section 2.3 or, with respect to
the Securities of any series, if not so established, in denominations of $1,000
and any integral multiple thereof. The Securities of each series shall be
numbered, lettered or otherwise distinguished in such manner or in accordance
with such plan as the officers of the Issuer executing the same may determine
with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest, if any, shall be payable on the dates, established as contemplated by
Section 2.3.
The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the Persons in whose names Outstanding Securities for such
series are registered (a) at the close of business on a subsequent record date
(which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established by notice given by mail by or on behalf
of the Issuer to the Holders of Securities not less than 15 days preceding such
subsequent record date or (b) as determined by such other procedure as is
mutually acceptable to the Issuer and the Trustee. The term "record date" as
used with respect to any interest payment date (except a date for payment of
defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Securities of such series established as
contemplated by Section 2.3, or, if no such date is so established, if such
interest payment date is the first day of a calendar month, the fifteenth day
of the next preceding calendar month or, if such interest payment date is the
fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.
SECTION 2.8 Registration Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide for
the registration of Securities of each series and the registration of transfer
of Securities of such series. Each such register shall be in written form in
the English language or in any other form capable of being converted into such
form within a reasonable time. At all reasonable times such register or
registers shall be open for inspection and available for copying by the
Trustee.
Upon due presentation for registration of transfer of any Security of
any series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate, if
any, and original issue date in authorized denominations for a like aggregate
principal amount.
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All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the agency of the Issuer that shall be maintained for such purpose
in accordance with Section 3.2. All Securities surrendered upon any exchange
or transfer provided for in this Indenture shall be promptly cancelled and
returned to the Issuer.
The Issuer 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 of Securities. No service charge shall be made for
any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing or publication of notice of redemption of Securities of such
series to be redeemed, (b) any Securities selected, called or being called for
redemption, in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed or (c) any Security
if the Holder thereof has exercised his right, if any, to require the Issuer to
repurchase such Security in whole or in part, except the portion of such
Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part 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 any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such ineligibility, the Issuer's election pursuant to Section
2.3 that such Securities be represented by one or more Global Securities shall
no longer be effective and the Issuer shall execute, and the Trustee, upon
receipt of an Issuer Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such Securities in exchange for such Global Security
or Securities.
The Issuer 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 a Global Security or Securities.
In such event the Issuer shall execute, and the Trustee, upon receipt of an
Issuer Order for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such Global Security
or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series in definitive registered form on such terms as
are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
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(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Issuer or the Trustee. Securities
in definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities are
so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid and legally binding obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver a new Security of the same
series, maturity date, interest rate, if any, and original issue date, bearing
a number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu of
and in substitution for the Security so destroyed, lost or stolen. In every
case the applicant for a substitute Security shall furnish to the Issuer and to
the Trustee and any agent of the Issuer or the Trustee such security or
indemnity as may be required by the Trustee or the Issuer to indemnify and
defend and to save each of the Trustee and the Issuer harmless and, in every
case of destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof and in
the case of mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Security), if the applicant for such payment shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as any of them may require to hold each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Issuer and the Trustee and any agent of the Issuer or
the Trustee evidence to the Trustee's satisfaction of the destruction, loss or
theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Issuer, whether or not the destroyed, lost or stolen Security shall be
at any time enforceable by anyone and shall be entitled to all the benefits of
(but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities of such
series duly authenticated and delivered hereunder. All Securities shall be
held and owned upon the express condition that, to the extent permitted by law,
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, defaced, destroyed, lost or stolen Securities and shall
preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or the
Trustee or any agent of the Trustee, shall be delivered to the Trustee or its
agent for cancellation or, if surrendered to the Trustee, shall be canceled by
it; and no Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee or its agent
shall return canceled Securities to the Issuer. If the Issuer or its agent
shall acquire any of the Securities, such acquisition
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shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the
Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities of such series
and thereupon temporary Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.2 and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless otherwise established
pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Issuer will notify the Trustee of any change in "CUSIP" numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and interest, if any, on each of the Securities at the place,
at the respective times and in the manner provided in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So long as
any of the Securities are Outstanding, the Issuer will maintain in each Place
of Payment, an office or agency where the Securities may be presented for
payment, an office or agency where the Securities may be presented for
registration of transfer and for exchange as in this Indenture provided, and an
office or agency where notices and demands to or upon the Issuer in respect of
the Securities or of this Indenture may be served. In case the Issuer shall at
any time fail to maintain any such office or agency, or shall fail to give
notice to the Trustee of any change in the location thereof, presentation may
be made and notice and demand may be served in respect of the Securities or of
this Indenture at the Corporate Trust Office. The Issuer hereby initially
designates the Corporate Trust Office for each such purpose and appoints the
Trustee as registrar and paying agent and as the agent upon whom notices and
demands may be served with respect to the Securities.
SECTION 3.3 No Interest Extension. In order to prevent any
accumulation of claims for interest after maturity thereof, the Issuer will not
directly or indirectly extend or consent to the extension of the time for the
payment of any claim for interest on any of the Securities and will not
directly or indirectly be a party to or approve any such arrangement by the
purchase or funding of said claims or in any other manner; provided, however,
that this Section 3.3 shall not apply in any case where an extension shall be
made pursuant to a plan proposed by the Issuer to the Holders of all Securities
of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
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SECTION 3.5 Provision as to Paying Agent. (a) If the Issuer
shall appoint a paying agent other than the Trustee, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 3.5,
(1) that it will hold all sums held by it as such agent
for the payment of the principal of or interest, if any, on the
Securities (whether such sums have been paid to it by the Issuer or by
any other obligor on the Securities) in trust for the benefit of the
Holders of the Securities and the Trustee; and
(2) that it will give the Trustee notice of any failure
by the Issuer (or by any other obligor on the Securities) to make any
payment of the principal of or interest, if any, on the Securities
when the same shall be due and payable; and
(3) that it will, at any time during the continuance of
any such failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it will, on
or before each due date of the principal of or interest, if any, on the
Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal or interest,
if any, so becoming due and will notify the Trustee of any failure to take such
action and of any failure by the Issuer (or by any other obligor under the
Securities) to make any payment of the principal of or interest, if any, on the
Securities when the same shall become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding,
the Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by it, or any paying agent hereunder, as
required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding,
any agreement of the Trustee or any paying agent to hold sums in trust as
provided in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more paying agents, it
will, on or before each due date of the principal of or interest, if any, on
any Securities, deposit with a paying agent a sum sufficient to pay the
principal or interest, if any, so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal or interest, if any,
and (unless such paying agent is the Trustee) the Issuer will promptly notify
the Trustee of its action or failure so to act.
SECTION 3.6 Restriction on Creation of Secured Debt. So long as
any of the Securities are outstanding, the Issuer shall not at any time create,
incur, assume or guarantee, and shall not cause, suffer or permit a Restricted
Subsidiary to create, incur, assume or guarantee, any Secured Debt that is
expressly by its terms Subordinated Indebtedness without making effective
provision (and the Issuer covenants that in such case it will make or cause to
be made such effective provision) whereby the Securities then Outstanding and
any other indebtedness of or guaranteed by the Issuer or such Restricted
Subsidiary then entitled thereto, subject to applicable priorities of payment,
shall be secured by such mortgage, security interest, pledge, lien or
encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations and
indebtedness shall be so secured; provided, that if any such mortgage, security
interest, pledge, lien or encumbrance securing such Subordinated Indebtedness
ceases to exist, such equal and ratable security for the benefit of the Holders
of Securities shall automatically cease to exist without any further action;
provided further that if such Subordinated Indebtedness is expressly
subordinated to the Securities, the mortgage, security interest, pledge, lien
or encumbrance securing such Subordinated Indebtedness shall be subordinate and
junior to the mortgage, security interest, pledge, lien or encumbrancesecuring
the Securities with the same relative priority as such Subordinated
Indebtedness shall have with respect to the Securities; provided further, that
the foregoing covenants shall not be applicable to the following:
(a)(i) Any mortgage, security interest, pledge, lien or encumbrance
on any property hereafter acquired (including acquisition through merger or
consolidation) or constructed by the Issuer or a Restricted Subsidiary and
created contemporaneously with, or within twelve months after, such acquisition
or the completion of construction to secure or provide for the payment of all
or any part of the purchase price of such property or the cost of construction
thereof, as the case may be; or (ii) any mortgage on property (including any
unimproved portion of partially improved
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property) of the Issuer or a Restricted Subsidiary created within twelve months
of completion of construction of a new plant or plants on such property to
secure all or part of the cost of such construction if, in the opinion of the
Board of Directors, such property or such portion thereof was prior to such
construction substantially unimproved for the use intended by the Issuer; or
(iii) the acquisition of property subject to any mortgage, security interest,
pledge, lien or encumbrance upon such property existing at the time of
acquisition thereof, whether or not assumed by the Issuer or such Restricted
Subsidiary; or (iv) any mortgage, security interest, pledge, lien or
encumbrance existing on the property or on the outstanding shares or
indebtedness of a corporation or other entity at the time such corporation or
other entity shall become a Restricted Subsidiary; or (v) any mortgage,
security interest, pledge, lien or encumbrance on property of a corporation or
other entity existing at the time such corporation or other entity is merged
into or consolidated with the Issuer or a Restricted Subsidiary or at the time
of a sale, lease or other disposition of the properties of a corporation or
other entity as an entirety or substantially as an entirety to the Issuer or a
Restricted Subsidiary; or
(b) Mortgages on property of the Issuer or a Restricted Subsidiary
in favor of the United States of America or any State thereof or any foreign
government, or any department, agency or instrumentality or political
subdivision of any thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase price or
the cost of construction of the property subject to such mortgages; or
(c) Any mortgage, security interest, pledge, lien or encumbrance
existing on property owned by the Issuer or any of its Subsidiaries on the date
of this Indenture; or
(d) Any mortgage, security interest, pledge, lien or encumbrance
created pursuant to the creation of trusts or other arrangements funded solely
with cash, cash equivalents or other marketable investments or securities of
the type customarily subject to such arrangements in customary financial
practice with respect to long-term or medium-term Indebtedness for money
borrowed, the sole purpose of which is to make provision for the retirement or
defeasance, without prepayment, of Indebtedness; or
(e) Any mortgage, security interest, pledge, lien or encumbrance
on the assets or properties of ENSTAR Alaska; or
(f) Any mortgage, security interest, pledge, lien or encumbrance
securing (i) all or part of the cost of exploring, producing, gathering,
processing, marketing, drilling or developing any properties of the Company or
any of its Subsidiaries, or securing Indebtedness incurred to provide funds
therefor, or (ii) Indebtedness incurred to finance all or part of the cost of
acquiring, constructing, altering, improving or repairing any such property or
assets, or securing Indebtedness incurred to provide funds therefor; or
(g) Any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any mortgage,
security interest, pledge, lien or encumbrance referred to in the foregoing
subparagraphs (a) through (f); provided, however, that the principal amount of
Secured Debt secured thereby shall not exceed the principal amount outstanding
at the time of such extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to the property which secured the
mortgage, security interest, pledge, lien or encumbrance so extended, renewed
or replaced and additions to such property.
Notwithstanding the foregoing provisions of this Section 3.6, the
Issuer and any one or more Restricted Subsidiaries may create, incur, assume or
guarantee Secured Debt which would otherwise be subject to the foregoing
restrictions in an aggregate amount that, without duplication, together with
all other Secured Debt of the Issuer and its Restricted Subsidiaries which
would otherwise be subject to the foregoing restrictions (not including Secured
Debt permitted to be secured under subparagraphs (a) through (g) above) and the
aggregate value of the Sale and Leaseback Transactions (as defined in Section
3.7) in existence at such time (not including Sale and Leaseback Transactions
the proceeds of which have been or will be applied in accordance with clause
(b) of Section 3.7) does not at the time exceed 10% of Consolidated Net
Tangible Assets (excluding ENSTAR Alaska). Solely for purposes of
subparagraphs (a) through (g) above, the term "mortgage" shall include any
arrangements in connection with a production payment or similar financing
arrangement.
SECTION 3.7 Restriction on Sale and Leaseback Transactions. The
Issuer will not, and will not permit any Restricted Subsidiary to, sell or
transfer (except to the Issuer or to one or more Restricted Subsidiaries, or
both) any
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Principal Property owned by it and which has been in full operation for more
than 120 days prior to such sale or transfer with the intention (i) of taking
back a lease on such property (other than a lease for a period not exceeding 36
months) and (ii) that the use by the Issuer or such Restricted Subsidiary of
such property will be discontinued on or before the expiration of the term of
such lease (any such transaction being herein referred to as a "Sale and
Leaseback Transaction"), unless (a) the Issuer or such Restricted Subsidiary
would be entitled, pursuant to the provisions of Section 3.6, to incur Secured
Debt equal in amount to the amount realized or to be realized upon such sale or
transfer secured by a mortgage on the property to be leased without equally and
ratably securing the Securities, or (b) the Issuer or a Restricted Subsidiary
shall apply an amount equal to the value of the property so leased to the
retirement (other than any mandatory retirement), within 120 days of the
effective date of any such arrangement, of indebtedness for money borrowed by
the Issuer or any Restricted Subsidiary (other than such indebtedness owned by
the Issuer or any Restricted Subsidiary) which was recorded as funded debt as
of the date of its creation and which, in the case of such indebtedness of the
Issuer, is not subordinate and junior in right of payment to the prior payment
of the Securities; provided, however, that the amount to be so applied to the
retirement of such indebtedness shall be reduced by (i) the aggregate principal
amount of any Securities delivered within 120 days of the effective date of any
such arrangement to the Trustee for retirement and cancellation, and (ii) the
aggregate principal amount of such indebtedness (other than the Securities)
retired by the Issuer or a Restricted Subsidiary within 120 days of the
effective date of any such arrangement.
The term "value" shall mean, with respect to a Sale and Leaseback
Transaction, as of any particular time, the amount equal to the greater of (i)
the net proceeds of the sale of the property leased pursuant to such Sale and
Leaseback Transaction, or (ii) the fair value of such property at the time of
entering into such Sale and Leaseback Transaction, as determined by the Board
of Directors, in either case divided first by the number of full years of the
term of the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
SECTION 3.8 Limitation on Issuance of Certain Other Subordinated
Indebtedness. The Issuer shall not issue, guarantee, assume or incur, directly
or indirectly, any Indebtedness which by its terms is both (a) subordinate or
junior in right of payment to Senior Indebtedness and (b) senior in right of
payment to the Securities.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of the
names and addresses of the Holders of the Securities of each series:
(a) semiannually and not more than 15 days after each March 1 and
September 1, and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to it
as provided in Section 4.1, and (ii) received by it in the capacity of
registrar or paying agent for such series, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of a
new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Securities of a particular series (in which case the applicants must all
hold Securities
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of such series) or with Holders of all Securities with respect to their rights
under this Indenture or under such Securities and such application is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, at its election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number
of Holders of Securities of such series or of all Securities, as the
case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Securities of such series or of all Securities, as the case may be, or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met, and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Securityholders with reasonable promptness after
the entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every Holder of Securities, by receiving and holding
the same, agrees with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee 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 the provisions of
subsection (b) of this Section 4.2, 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 such subsection
(b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer 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 Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended; or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections, then to 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, as amended, in respect of a debt
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(b) to 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
Issuer with the conditions and covenants provided for in this Indenture as may
be required from time to time by such rules and regulations;
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(c) if there are any Original Issue Discount Securities
Outstanding, to file with the Trustee promptly after the end of each calendar
year (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on such Securities as of
the end of such year and (ii) such other specific information relating to such
original issue discount as may then be relevant under the Internal Revenue Code
of 1986, as amended from time to time.
(d) to transmit by mail to the Holders of Securities within 30
days after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a), (b) and
(c) of this Section 4.3 as may be required to be transmitted to such Holders by
rules and regulations prescribed from time to time by the Commission; and
(e) furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his knowledge of the Issuer's compliance
with all conditions and covenants under this Indenture. For purposes of this
subsection (e), such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.4 Reports by the Trustee. (a) Within 60 days after
January 1 of each year commencing with the year 1998, the Trustee shall
transmit by mail to the Holders of Securities, as provided in subsection (c) of
this Section, a brief report dated as of such January 1 with respect to any of
the following events which may have occurred within the last 12 months (but if
no such event has occurred within such period, no report need be transmitted):
(i) any change to its eligibility under Section 6.9 and
its qualification under Section 6.8;
(ii) the creation of, or any material change to, a
relationship specified in paragraph (i) through (x) of Section 6.8
(c);
(iii) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities of any series,
on any property or funds held or collected by it as Trustee, except
that the Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not more than
1/2 of 1% of the principal amount of all Securities Outstanding on the
date of such report;
(iv) the amount, interest rate, if any, and maturity date
of all other indebtedness owing by the Issuer (or by any other obligor
on the Securities) to the Trustee in its individual capacity on the
date of such report, with a brief description of any property held as
collateral security therefor, except any indebtedness based upon a
creditor relationship arising in any manner described in Section
6.13(b) (2), (3), (4) or (6);
(v) any change to the property and funds, if any,
physically in the possession of the Trustee (as such) on the date of
such report;
(vi) any additional issue of Securities which the Trustee
has not previously reported; and
(vii) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously reported
and which in its opinion materially affects the Securities, except
action in respect of a default, notice of which has been or is to be
withheld by it in accordance with the provisions of Section 5.8.
(b) The Trustee shall transmit to the Securityholders of each
series, as provided in subsection (c) of this Section 4.4, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee, as such, since the date of the last report transmitted pursuant to the
provisions of subsection (a) of this Section 4.4 (or if no such report has yet
been so
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transmitted, since the date of this Indenture) for the reimbursement of which
it claims or may claim a lien or charge prior to that of the Securities of such
series on property or funds held or collected by it as Trustee and which it has
not previously reported pursuant to this subsection (b), except that the
Trustee shall not be required (but may elect) to report such advances if such
advances remaining unpaid at any time aggregate 10% or less of the principal
amount of all Securities Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail:
(i) to all Holders of Securities, as the names and
addresses of such Holders appear upon the registry books of the
Issuer; and
(ii) to all other Persons to whom such reports are
required to be transmitted pursuant to Section 313(c) of the Trust
Indenture Act of 1939.
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by the
Trustee with each stock exchange upon which the Securities of any applicable
series are listed and also with the Commission. The Issuer agrees to promptly
notify the Trustee with respect to any series when and as the Securities of
such series become admitted to trading on any national securities exchange or
delisted from trading thereon.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Thirteen or otherwise), unless
it is either inapplicable to a particular series or it is specifically deleted
or modified in or pursuant to the Board Resolution or supplemental indenture
establishing such series of Securities or in the form of Security, for such
series:
(a) default in the payment of any installment of interest upon any
of the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if any,
of the Securities of such series as and when the same shall become due and
payable either at maturity, upon redemption, by declaration or otherwise; or
(c) default in the payment or satisfaction of any sinking fund or
other purchase obligation with respect to Securities of such series, as and
when such obligation shall become due and payable as in this Indenture
expressed; or
(d) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer in the
Securities of such series or in this Indenture continued for a period of 60
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Issuer by the Trustee by certified
or registered mail, or to the Issuer and the Trustee by the Holders of at least
25% in aggregate principal amount of the Securities of such series then
Outstanding; or
(e) without the consent of the Issuer a court having jurisdiction
shall enter an order for relief with respect to the Issuer under the Bankruptcy
Code or without the consent of the Issuer a court having jurisdiction shall
enter a judgment, order or decree adjudging the Issuer a bankrupt or insolvent,
or enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Issuer under the Bankruptcy Code or
applicable state insolvency law and the continuance of any such judgment, order
or decree is unstayed and in effect for a period of 90 consecutive days; or
(f) the Issuer shall institute proceedings for entry of an order
for relief with respect to the Issuer under the Bankruptcy Code or for an
adjudication of insolvency, or shall consent to the institution of bankruptcy
or insolvency proceedings against it, or shall file a petition seeking, or seek
or consent to reorganization, arrangement, composition
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or relief under the Bankruptcy Code or any applicable state law, or shall
consent to the filing of such petition or to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator or similar official of
the Issuer or of substantially all of its property, or the Issuer shall make a
general assignment for the benefit of creditors as recognized under the
Bankruptcy Code; or
(g) any other Event of Default provided with respect to the
Securities of such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities
of such series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, notwithstanding anything to the contrary contained
in this Indenture or in the Securities of such series. This provision,
however, is subject to the condition that, if at any time after the unpaid
principal amount (or such specified amount) of the Securities of such series
shall have been so declared due and payable and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Securities of such series and the principal of any and all Securities of
such series which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest, if any, to the extent that
payment of such interest is enforceable under applicable law and on such
principal at the rate borne by the Securities of such series to the date of
such payment or deposit) and the reasonable compensation, disbursements,
expenses and advances of the Trustee, and any and all defaults under this
Indenture, other than the nonpayment of such portion of the principal amount of
and accrued interest, if any, on Securities of such series which shall have
become due by acceleration, shall have been cured or shall have been waived in
accordance with Section 5.7 or provision deemed by the Trustee to be adequate
shall have been made therefor, then and in every such case the Holders of a
majority in aggregate principal amount of the Securities of such series then
Outstanding, by written notice to the Issuer and to the Trustee, may rescind
and annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon. If any Event of Default with respect to
the Issuer specified in Section 5.1(e) or 5.1(f) occurs, all unpaid principal
amount (or, if the Securities of any series then Outstanding are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of each such series) and accrued interest on all Securities of
each series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1
(a), (b) or (c), the Trustee shall not be charged with knowledge of any Event
of Default unless written notice thereof shall have been given to a Responsible
Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a) if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such default
shall have continued for a period of 30 days, or (b) if default shall be made
in the payment of the principal of any of the Securities of such series as and
when the same shall have become due and payable, whether at maturity of the
Securities of such series or upon redemption or by declaration or otherwise,
then, upon demand of the Trustee, the Issuer will pay to the Trustee, for the
benefit of the Holders of the Securities, the whole amount that then shall have
become due and payable on all such Securities of such series for principal or
interest, if any, or both, as the case may be, with interest upon the overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of interest, if any, at the rate
borne by the Securities of such series; and, in addition thereto, such further
amount as shall be sufficient to cover the
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costs and expenses of collection, including a reasonable compensation to the
Trustee, its agents, attorneys and counsel, and any expenses or liabilities
incurred by the Trustee hereunder other than through its negligence or bad
faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any other obligor on the
Securities of such series and collect in the manner provided by law out of the
property of the Issuer or any other obligor on the Securities of such series,
wherever situated, the moneys adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other obligor,
or in the case of any other similar judicial proceedings relative to the Issuer
or other obligor upon the Securities of such series, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of the Securities of such series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.2, shall be entitled and empowered by intervention in such
proceedings or otherwise to file and prove a claim or claims for the whole
amount of principal and interest, if any, owing and unpaid in respect of the
Securities of such series, and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of the Securityholders
allowed in such judicial proceedings relative to the Issuer or any other
obligor on the Securities of such series, its or their creditors, or its or
their property, and to collect and receive any moneys or other property payable
or deliverable on any such claims, and to distribute the same after the
deduction of its charges and expenses, and any receiver, assignee or trustee or
similar official in bankruptcy or reorganization is hereby authorized by each
of the Securityholders to make such payments to the Trustee, and, if the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due it for compensation and
expenses, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable compensation,
expenses and counsel fees and expenses out of the estate in any such
proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall be for the ratable benefit of the Holders of
the Securities of the series in respect of which such judgment has been
recovered.
SECTION 5.3 Application of Moneys Collected by Trustee. Any
moneys collected by the Trustee pursuant to Section 5.2 with respect to
Securities of any series then Outstanding shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a
result of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of
such series shall not have become due and be unpaid, to the payment of
interest, if any, on the Securities of such series, in the order of
the maturity of the installments of such interest, if any, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest, if any, at the
rate borne by the Securities of such series, such payment to be made
ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities of such
series shall have become due, by declaration or otherwise, to the
payment of the whole amount then owing and unpaid upon the Securities
of such
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series for principal and interest, if any, with interest on the
overdue principal and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest, if
any, at the rate borne by the Securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amounts so
due and unpaid upon the Securities of such series, then to the payment
of such principal and interest, if any, without preference or priority
of principal over interest or of interest over principal, or of any
installment of interest over any other installment of interest, or of
any Security over any other Security, ratably to the aggregate of such
principal and accrued and unpaid interest; and
FOURTH: To the payment of any surplus then remaining to the
Issuer, its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same.
No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities to which
it relates, or which in any manner shall have been kept alive after maturity by
an extension (otherwise than pursuant to an extension made pursuant to a plan
proposed by the Issuer to the Holders of all Securities of any series then
Outstanding), purchase, funding or otherwise by or on behalf or with the
consent or approval of the Issuer shall be entitled, in case of a default
hereunder, to any benefit of this Indenture, except after prior payment in full
of the principal of all Securities of any series then Outstanding and of all
claims for interest not so transferred, pledged, kept alive, extended,
purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee or similar official, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding, it being
understood and intended, and being expressly covenanted by the Holder of every
Security of such series with every other taker and Holder and the Trustee, that
no one or more Holders of Securities of such series shall have any right in any
manner whatever by virtue of or by availing of any provision of this Indenture
or of the Securities to affect, disturb or prejudice the rights of any other
Holder of such Securities of such series, or to obtain or seek to obtain
priority over or preference as to any other such Holder, or to enforce any
right under this Indenture or the Securities, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities of such series.
Notwithstanding any other provisions in this Indenture, but subject to
Article Thirteen, the right of any Holder of any Security to receive payment of
the principal of and interest, if any, on such Security, on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates shall not be
impaired or affected without the consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of
Default hereunder, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceedings
in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to the Trustee or
the Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and
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remedy given by this Article Five or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders. The Holders of a majority in aggregate principal
amount of the Securities of any series then Outstanding 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 Securities of such series; provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine upon advice
of counsel that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, its executive
committee, or a trust committee of directors or Responsible Officers or both
shall determine that the action or proceeding so directed would involve the
Trustee in personal liability. The Holders of a majority in aggregate
principal amount of the Securities of any series then Outstanding may on behalf
of the Holders of all of the Securities of such series waive any past default
or Event of Default hereunder and its consequences except a default in the
payment of interest, if any, on, or the principal of, the Securities of such
series. Upon any such waiver the Issuer, the Trustee and the Holders of the
Securities of such series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 5.7, said default or Event of Default shall
for all purposes of the Securities and this Indenture be deemed to have been
cured and to be not continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 90
days after the occurrence of a default, with respect to Securities of any
series then Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the Securities
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of this Section 5.8 being hereby
defined to be the events specified in clauses (a), (b), (c), (d), (e), (f) and
(g) of Section 5.1, not including periods of grace, if any, provided for
therein and irrespective of the giving of the written notice specified in said
clause (d) but in the case of any default of the character specified in said
clause (d) no such notice to Securityholders shall be given until at least 60
days after the giving of written notice thereof to the Issuer pursuant to said
clause (d), as the case may be); provided, however, that, except in the case of
default in the payment of the principal of or interest, if any, on any of the
Securities, or in the payment or satisfaction of any sinking fund or other
purchase obligation, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee, or a trust
committee of directors or Responsible Officers or both of the Trustee in good
faith determines that the withholding of such notice is in the best interests
of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorney's fees and expenses, against
any party litigant in such suit, having due regard to the merits and good faith
of the claims or defenses made by such party litigant; but the provisions of
this Section 5.9 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Securityholder, or group of Securityholders, holding in
the aggregate more than 10% in principal amount of the Securities of any series
then Outstanding, or to any suit instituted by any Securityholders for the
enforcement of the payment of the principal of or interest, if any, on any
Security against the Issuer on or after the due date expressed in such
Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers
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vested in it by this Indenture, and use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such Events
of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined solely by
the express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations
or other facts stated therein);
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.7 relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section
6.1:
(a) the Trustee may rely conclusively and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers' Certificate or
Issuer Order (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the secretary or an assistant
secretary of the Issuer;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel promptly confirmed in writing shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture
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(including, without limitation, pursuant to Section 5.1), unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be paid
by the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be deemed to have notice of any Default
of Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture, of the
Securities or of any prospectus used to sell the Securities. The Trustee shall
not be accountable for the use or application by the Issuer of any of the
Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and, subject
to Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed to in writing between the Issuer and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any and all loss, liability, damage,
claim or expense, including taxes (other than taxes based on the income of the
Trustee), incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this Indenture
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or the trusts hereunder and its duties hereunder, including the costs and
expenses of defending itself against or investigating any claim or liability in
the premises. The obligations of the Issuer under this Section 6.6 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture or the resignation or
removal of the Trustee and shall not be subordinate to the payment of Senior
Indebtedness pursuant to Article Thirteen. Such additional indebtedness shall
be a senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities, and the Securities are hereby
subordinated to such senior claim. When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 5.1 or in
connection with Article Five hereof, the expenses (including the reasonable
fees and expenses of its counsel) and the compensation for the service in
connection therewith are intended to constitute expenses of administration
under any bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate,
etc. Subject to Sections 6.1 and 6.2, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable that
a matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. (a)
If the Trustee has or shall acquire any conflicting interest (as defined in
subsection (c)), then within 90 days after ascertaining that it has such
conflicting interest, and if the default (as defined in subsection (c)) to
which such conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such 90-day period, the Trustee shall
either eliminate such conflicting interest or, except as otherwise provided
below, resign, and the Issuer shall take prompt steps to have a successor
appointed in the manner provided in Section 6.10.
(b) If the Trustee shall fail to comply with the provisions of
subsection (a), the Trustee shall, within 10 days after the expiration of such
90-day period, transmit notice of such failure to the Securityholders in the
manner and to the extent provided in Section 4.4 and, subject to the provisions
of Section 5.9, unless the Trustee's duty to resign is stayed as provided
below, any Securityholder who has been a bona fide Holder of Securities 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,
and the appointment of a successor, if the Trustee fails, after written request
thereof by such Securityholder, to comply with the provisions of subsection
(a).
Except in the case of a default in the payment of the principal of or
interest on any Security, or in the payment of any sinking or purchase fund
installment, the Trustee shall not be required to resign as provided by this
Section 6.8 if the Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing thereon, that
(i) the default under the Indenture may be cured or
waived during a reasonable period and under the procedures described
in such application, and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Securities.
The filing of such an application shall automatically stay the
performance of the duty to resign until the Commission orders otherwise. Any
resignation of the Trustee shall become effective only upon the appointment of
a successor trustee in accordance with the provisions of Section 6.10 and such
successor's acceptance of such an appointment.
(c) For the purposes of this Section 6.8, the Trustee shall be
deemed to have a conflicting interest with respect to Securities of any series
if the Securities of such series are in default (as determined in accordance
with the provisions of Section 5.1, but exclusive of any period of grace or
requirement of notice) and
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(i) the Trustee is trustee under this Indenture with
respect to the Outstanding securities of any other series or is a
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of
the Issuer are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists of
Securities issued under this Indenture; provided that there shall be
excluded from the operation of this paragraph (i), this Indenture with
respect to the Securities of any other series and there shall also be
so excluded any other indenture or indentures under which other
securities, or certificates of interest or participation in other
securities, of the Issuer are outstanding if (x) this Indenture is
and, if applicable, this Indenture and any series issued pursuant to
this Indenture and such other indenture or indentures are wholly
unsecured and rank equally and such other indenture or indentures are
hereafter qualified under the Trust Indenture Act of 1939, unless the
Commission shall have found and declared by order pursuant to Section
305(b) or Section 307(c) of the Trust Indenture Act of 1939 that
differences exist between the provisions of this Indenture with
respect to Securities of such series and one or more other series, or
the provisions of this Indenture and the provisions of such other
indenture or indentures which are so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to Securities of such series
and such other series, or under this Indenture or such other indenture
or indentures, or (y) the Issuer shall have sustained the burden of
proving, on application to the Commission and after opportunity for
hearing thereon, that trusteeship under this Indenture with respect to
Securities of such series and such other series, or under this
Indenture and such other indenture or indentures is not so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture with respect to
Securities of such series and such other series, or under this
Indenture and such other indentures;
(ii) the Trustee or any of its directors or executive
officers is an underwriter for the Issuer;
(iii) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with an underwriter for the Issuer;
(iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee, or
representative of the Issuer, or of an underwriter (other than the
Trustee itself) for the Issuer who is currently engaged in the
business of underwriting, except that (x) one individual may be a
director or an executive officer, or both, of the Trustee and a
director or an executive officer, or both, of the Issuer, but may not
be at the same time an executive officer of both the Trustee and the
Issuer; (y) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a
director of the Issuer; and (z) the Trustee may be designated by the
Issuer or by any underwriter for the Issuer to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal agent,
escrow agent, or depositary, or in any other similar capacity, or,
subject to the provisions of subsection (c) (i) of this Section, to
act as trustee, whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the Trustee
is beneficially owned either by the Issuer or by any director, partner
or executive officer thereof, or 20% or more of such voting securities
is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Issuer or by any
director, partner, or executive officer thereof, or is beneficially
owned, collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, (x) 5% or
more of the voting securities or 10% or more of any other class of
security of the Issuer, not including the Securities issued under this
Indenture and securities issued under any other indenture under which
the Trustee is also trustee, or (y) 10% or more of any class of
security of an underwriter for the Issuer;
(vii) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, 5% or more
of the voting securities of any person who, to the knowledge of the
Trustee, owns 10% or more of the voting securities of, or controls
directly or indirectly or is under direct or indirect common control
with, the Issuer;
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(viii) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, 10% or more
of any class security of any person who, to the knowledge of the
Trustee, owns 50% or more of the voting securities of the Issuer;
(ix) the Trustee owns on the date of default (as
determined in accordance with the provisions of Section 5.1, but
exclusive of any period of grace or requirement of notice) or on any
anniversary of such default while such default remains outstanding, in
the capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or of
any class of security, of any Person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting
interest under paragraphs (vi), (vii) or (viii) of this subsection.
As to any such securities of which the Trustee acquired ownership
through becoming executor, administrator, or testamentary trustee of
an estate which included them, the provisions of the preceding
sentence shall not apply, for a period of two years from the date of
such acquisition, to the extent that such securities included in such
estate do not exceed 25% of such voting securities or 25% of any such
class of security. Promptly after the dates of any such default and
annually in each succeeding year that the Securities remain in
default, the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such dates.
If the Issuer fails to make payment in full of principal of or
interest on any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the
Trustee shall make a prompt check of its holdings of such Securities
in any of the above-mentioned capacities as of the date of the
expiration of such 30-day period, and after such date, notwithstanding
the foregoing provisions of this paragraph, all such Securities so
held by the Trustee, with sole or joint control over such Securities
vested in it, shall, but only so long as such failure shall continue,
be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (vi), (vii) and (viii) of this subsection; or
(x) except under the circumstances described in
paragraphs (1), (3), (4), (5) or (6) of Section 6.13(b), the Trustee
shall be or shall become a creditor of the Issuer.
For purposes of subsection (c) (i), the term "series of securities" or
"series" means a series, class or group of securities issuable under an
indenture pursuant to the terms of which holders of one such series may vote to
direct the Trustee, or otherwise take action pursuant to a vote of such
holders, separately from holders of another such series; provided that "series
of securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in subsections (c) (v) to (ix)
inclusive of this Section 6.8 shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of subsections (c) (iii) or (vii) of this Section.
For the purposes of subsections (c) (vi), (vii), (viii) and (ix), of
this Section 6.8, only,
(A) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities,
but shall not include any note or other evidence of indebtedness
issued to evidence an obligation to repay moneys lent to a person by
one or more banks, trust companies, or banking firms, or any
certificate of interest or participation in any such note or evidence
of indebtedness;
(B) an obligation shall be deemed to be in default when a
default in payment of principal shall have continued for 30 days or
more and shall not have been cured; and
(C) the Trustee shall not be deemed to be the owner or
holder of (x) any security which it holds as collateral security, as
trustee or otherwise, for an obligation which is not in default as
defined in clause (B) above, or (y) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (z) any security which it holds as agent for collection,
or as custodian, escrow agent, or depositary, or in any similar
representative capacity.
Except as provided above, the word "security" or "securities" as used
in this Section 6.8 shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in any profit-sharing agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share,
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investment contract, voting trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas or other mineral rights,
or, in general, any interest or instrument commonly known as a "security", or
any certificate of interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrant or right to subscribe to
or purchase, any of the foregoing.
(d) For purposes of this Section 6.8:
(i) the term "underwriter" when used with reference to
the Issuer shall mean every person who, within a one year period prior
to the time as of which the determination is made, was an underwriter
of any security of the Issuer outstanding at the time of the
determination;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions with
respect to any organization whether incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization, or a government or political
subdivision thereof; as used in this paragraph, the term "trust" shall
include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the
direction or management of the affairs of a person;
(v) the term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean the
president, every vice president, every trust officer, the cashier, the
secretary, and the treasurer of a corporation, and any individual
customarily performing similar functions with respect to any
organization whether incorporated or unincorporated, but shall not
include the chairman of the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section 6.8 shall be calculated in accordance with the
following provisions:
(i) a specified percentage of the voting securities of
the Trustee, the Issuer or any other person referred to in this
Section (each of whom is referred to as a "person" in this paragraph)
means such amount of the outstanding voting securities of such person
as entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person;
(ii) a specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding;
(iii) the term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security;
(iv) the term "outstanding" means issued and not held by
or for the account of the issuer; the following securities shall not
be deemed outstanding within the meaning of this definition:
(A) securities of an issuer held in a sinking
fund relating to securities of the issuer of the same class;
(B) securities of an issuer held in a sinking
fund relating to another class of securities of the issuer, if
the obligation evidenced by such other class of securities is
not in default as to principal or interest or otherwise;
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(C) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(D) securities held in escrow if placed in escrow
by the issuer thereof;
provided, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof; and
(v) a security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided, that,
in the case of secured evidences of indebtedness, all of which are
issued under a single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes and provided,
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The
Trustee for each series of Securities hereunder shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any state or the District of Columbia having a combined capital
and surplus of at least $50,000,000, and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal, state or District of Columbia authority, or a corporation or other
Person permitted to act as trustee by the Commission. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. No obligor upon the Securities or any
Affiliate of such obligor shall serve as trustee upon the Securities. In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.9, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer. Upon receiving such notice
of resignation, the Issuer shall promptly appoint a successor trustee or
trustees with respect to the applicable series by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning trustee
may, at the expense of the Issuer, petition any court of competent jurisdiction
for the appointment of a successor trustee, or any Securityholder who has been
a bona fide Holder of a Security or Securities of the applicable series for at
least six months may, subject to the provisions of Section 5.9, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of Section 6.8 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at
least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after
written request therefor by the Issuer or by any such Securityholder;
or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator 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;
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then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 5.9, any Securityholder who has been a bona fide Holder of a Security
or Securities 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 and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee with
respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
delivery of such evidence of removal, the Trustee may, at the expense of the
Issuer, petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Section 5.9, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as
if originally named as trustee for such series hereunder; but, nevertheless, on
the written request of the Issuer or of the successor trustee, upon payment of
its charges then unpaid, the trustee ceasing to act shall, subject to Section
10.4, pay over to the successor trustee all moneys at the time held by it
hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Issuer shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a prior claim upon all property or funds held
or collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any series as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and 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 under
separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the Issuer
fails to give such notice within ten days after
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acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. 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 that such corporation shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the certificate of
the Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
(a) Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Issuer
within three months prior to a default, as defined in subsection (c) of this
Section 6.13, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in this
Section 6.13):
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in respect of
principal or interest, effected after the beginning of such three
month period and valid as against the Issuer and its other creditors,
except any such reduction resulting from the receipt or disposition of
any property described in subsection (a) (2) of this section, or from
the exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against the
Issuer upon the date of such default; and
(2) all property received by the Trustee in respect of
any claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three month period, or an amount equal to the proceeds of any
such property, if disposed of, subject, however, to the rights, if
any, of the Issuer and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Issuer) who is
liable thereon, (ii) the proceeds of the bona fide sale of any such
claim by the Trustee to a third Person, and (iii) distributions made
in cash, securities or other property in respect of claims filed
against the Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Bankruptcy Code or applicable state
law;
(B) to realize, for its own account, upon any property
held by it as security for any such claim, if such property was so
held prior to the beginning of such three month period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property held by
it as security for any such claim, if such claim was created after the
beginning of such three month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had
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no reasonable cause to believe that a default as defined in subsection
(c) of this Section would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held as
security for such claim as provided in such paragraph (B) or (C), as
the case may be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any preexisting claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, such Securityholders and the
holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Bankruptcy Code or applicable state law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Issuer of the funds and
property in such special account, and before crediting to the respective claims
of the Trustee, such Securityholders and the holders of other indenture
securities, dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Bankruptcy
Code or applicable state law, but after crediting thereon receipts on account
of the indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term "dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Bankruptcy Code or applicable state law, whether such distribution is made in
cash, securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceeding for reorganization is pending shall
have jurisdiction (i) to apportion between the Trustee, such Securityholders
and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and the proceeds thereof, or (ii) in lieu of such apportionment, in
whole or in part, to give to the provisions of this paragraph due consideration
in determining the fairness of the distributions to be made to the Trustee,
such Securityholders and the holders of other indenture securities with respect
to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three month period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which
would have given rise to the obligation to account, if such Trustee
had continued as trustee, occurred after the beginning of such three
month period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or removal.
(b) There shall be excluded from the operation of this Section
6.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued
under any indenture or any security or securities having a maturity of
one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture for the purpose
of preserving any property which shall at any time be subject to the
lien of this
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Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business
in the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, fiscal agent or depositary, or
other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented or an indebtedness created as a result of
goods or securities sold in a cash transaction as defined in
subsection (c)(2) of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Issuer; or
(6) the acquisition, ownership, acceptance or negotiation
of any drafts, bills of exchange, acceptances or obligations which
fall within the classification of self-liquidating paper as defined in
subsection (c) (3) of this Section.
(c) As used in this Section 6.13:
(1) the term "default" shall mean any failure to make
payment in full of the principal of or interest on any of the
Securities when and as such principal or interest becomes due and
payable;
(2) the term "cash transaction" shall mean any
transaction in which full payment for goods or securities sold is made
within seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or bankers and
payable upon demand;
(3) the term "self-liquidating paper" shall mean any
draft, bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Issuer for the purpose of
financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon the goods, wares or
merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Issuer arising from
the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation; and
(4) the term "Issuer" shall mean any obligor upon the
Securities.
SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is
made in this Indenture to the authentication and delivery of Securities of any
series by the Trustee or to 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 for such series and a Certificate of
Authentication executed on behalf of the Trustee by such Authenticating Agent.
Such Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America or of any state
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000
(determined as provided in Section 6.9 with respect to the Trustee) and subject
to supervision or examination by federal or state authority.
Any corporation into which any 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 any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency
business of any Authenticating Agent, shall continue to be the Authenticating
Agent with respect to all series of Securities for which it served as
Authenticating
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Agent without the execution or filing of any paper or any further act on the
part of the Trustee or such Authenticating Agent. Any Authenticating Agent may
at any time, and if it shall cease to be eligible shall, resign by giving
written notice of resignation to the Trustee and to the Issuer. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more series of Securities, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and the Issuer
shall provide notice of such appointment to all Holders of Securities of such
series in the manner and to the extent provided in Section 11.4. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent.
The Issuer agrees to pay to the Authenticating Agent for such series from time
to time reasonable compensation. The Authenticating Agent for the Securities
of any series shall have no responsibility or liability for any action taken by
it as such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Article
Seven.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such execution is by or
on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of the person
executing the same.
(b) The ownership of Securities shall be proved by the Security
register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal of and, subject to the provisions of this Indenture, interest, if
any, on such Security and for all other purposes; and neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of the Issuer or any other
obligor on the Securities with respect to which such determination is being
made shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be
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protected in relying on any such direction, consent or waiver only securities
which a Responsible Officer of the Trustee actually knows are 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 Issuer or any other obligor upon the Securities or
any Affiliate of the Issuer or any other obligor on the Securities. In case of
a dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice.
Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly
an Officers' Certificate listing and identifying all Securities, if any, known
by the Issuer to be owned or held by or for the account of any of the
above-described Persons; and, subject to Sections 6.1 and 6.2, the Trustee
shall be entitled to accept such Officers' Certificate as conclusive evidence
of the facts therein set forth and of the fact that all Securities not listed
therein are Outstanding for the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article Seven, revoke such action so
far as concerns such Security provided that such revocation shall not become
effective until three business days after such filing. Except as aforesaid any
such action taken by the Holder of any Security shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor or on registration
of transfer thereof, irrespective of whether or not any notation in regard
thereto is made upon any such Security. Any action taken by the Holders of the
percentage in aggregate principal amount of the Securities of any or all
series, as the case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon the Issuer, the Trustee and the
Holders of all the Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer
may, but shall not be obligated to, direct the Trustee to establish a record
date for the purpose of determining the Persons entitled to (i) waive any past
default with respect to the Securities of such series in accordance with
Section 5.7 of the Indenture, (ii) consent to any supplemental indenture in
accordance with Section 8.2 of the Indenture or (iii) waive compliance with any
term, condition or provision of any covenant hereunder. If a record date is
fixed, the Holders on such record date, or their duly designated proxies, and
any such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after such
record date; provided, however, that unless such waiver or consent is obtained
from the Holders, or duly designated proxies, of the requisite principal amount
of Outstanding Securities of such series prior to the date which is the 180th
day after such record date, any such waiver or consent previously given shall
automatically and without further action by any Holder be canceled and of no
further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of
1939 as in force at the date of the execution thereof) for one or more of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer pursuant
to Article Nine;
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(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of all or any series of
Securities, (and if such covenants, restrictions, conditions or provisions are
to be for the protection of less than all series of Securities, stating that
the same are expressly being included solely for the protection of such series)
and to make the occurrence, or the occurrence and continuance, of a default in
any such additional covenants, restrictions, conditions or provisions an Event
of Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction, condition or provision
such supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such an Event
of Default or may limit the remedies available to the Trustee upon such an
Event of Default or may limit the right of the Holders of a majority in
aggregate principal amount of the Securities of such series to waive such an
Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may deem
necessary or desirable, provided, however, that no such action shall adversely
affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 2.3; and
(f) 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 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
6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Securities then Outstanding of any series affected by such supplemental
indenture, the Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of such
series; provided, that no such supplemental indenture shall (a) extend the
stated final maturity of the principal of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest,
if any, thereon (or, in the case of an Original Issue Discount Security, reduce
the rate of accrual of original issue discount thereon), or reduce or alter the
method of computation of any amount payable on redemption, repayment or
purchase by the Issuer thereof (or the time at which any such redemption,
repayment or purchase may be made), or make the principal thereof (including
any amount in respect of original issue discount), or interest, if any, thereon
payable in any coin or currency other than that provided in the Securities or
in accordance with the terms of the Securities, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable
upon an acceleration of the maturity thereof pursuant to Section 5.1 or the
amount thereof provable in bankruptcy pursuant to Section 5.2, or impair or
affect the right of any Securityholder to institute suit for the payment
thereof or, if the Securities provide therefor, any right of repayment or
purchase at the option of the Securityholder, in each case without the consent
of the Holder of each Security so affected, or (b) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the
Holders of each Security so affected. No consent of any Holder
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of any Security shall be necessary under this Section 8.2 to permit the Trustee
and the Issuer to execute supplemental indentures pursuant to Sections 8.1 and
9.2.
A supplemental indenture which changes or eliminates any covenant,
Event of Default 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 Holders of Securities of such series, with
respect to such covenant or provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as
aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Trustee shall give notice thereof to the Holders of then Outstanding Securities
of each series affected thereby, as provided in Section 11.4. Any failure of
the Issuer to give such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
and the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Issuer and the Holders of
Securities of each series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and shall be deemed to be part of the terms and conditions
of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall be entitled to receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article Eight complies
with the applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
SECTION 8.6 Subordination Unimpaired. This Indenture may not be
amended to alter the subordination of any Outstanding Securities without the
written consent of each holder of Senior Indebtedness then outstanding that
would be adversely affected thereby.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms.
Subject to the provisions of Section 9.3, nothing contained in this Indenture
or in any of the Securities shall prevent any consolidation or merger of the
Issuer with
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or into any other corporation or corporations (whether or not affiliated with
the Issuer), or successive consolidations or mergers in which the Issuer or its
successor or successors shall be a party or parties, or shall prevent any sale,
lease, exchange or other disposition of all or substantially all the property
and assets of the Issuer to any other corporation (whether or not affiliated
with the Issuer) authorized to acquire and operate the same; provided, however,
and the Issuer hereby covenants and agrees, that any such consolidation,
merger, sale, lease, exchange or other disposition shall be upon the conditions
that (a) immediately after such consolidation, merger, sale, lease, exchange or
other disposition of the corporation (whether the Issuer or such other
corporation) formed by or surviving any such consolidation or merger, or to
which such sale, lease, exchange or other disposition shall have been made,
shall not be in default in the performance or observance of any of the terms,
covenants and conditions of this Indenture to be kept or performed by the
Issuer; (b) the corporation (if other than the Issuer) formed by or surviving
any such consolidation or merger, or to which such sale, lease, exchange or
other disposition shall have been made, shall be a corporation organized under
the laws of the United States of America, any state thereof or the District of
Columbia; and (c) the due and punctual payment of the principal of and
interest, if any, on all the Securities, according to their tenor, and the due
and punctual performance and observance of all of the covenants and conditions
of this Indenture to be performed by the Issuer, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee executed and
delivered to the Trustee, by the corporation (if other than the Issuer) formed
by such consolidation, or into which the Issuer shall have been merged, or by
the corporation which shall have acquired or leased such property.
SECTION 9.2 Securities to be Secured in Certain Events. If, upon
any such consolidation, merger, or upon any such sale, lease, exchange or other
disposition or upon any acquisition by the Issuer by purchase or otherwise of
all or any part of the properties of any other corporation, any Principal
Property owned by the Issuer or a Restricted Subsidiary immediately prior
thereto would thereupon become subject to any mortgage, security interest,
pledge, lien or encumbrance, not permitted by Section 3.6 hereof, the Issuer,
prior to such consolidation, merger, sale, lease, exchange or other disposition
or acquisition, will by indenture supplemental hereto secure the due and
punctual payment of the principal of and interest, if any, on the Securities
then outstanding (equally and ratably, or with such other relative priority
specified in Section 3.6, with any other indebtedness of or guaranteed by the
Issuer then entitled thereto, but only to the extent that such indebtedness is
Subordinated Indebtedness) by a direct lien on such Principal Property,
together with any other properties and assets of the Issuer or of any such
Restricted Subsidiary, whichever shall be the owner of any such Principal
Property, which would thereupon become subject to any such mortgage, security
interest, pledge, lien or encumbrance, prior to all liens other than any
theretofore existing thereon and other than liens securing Senior Indebtedness.
SECTION 9.3 Successor Corporation to be Substituted. In case of
any such consolidation or merger or any sale, conveyance or lease of all or
substantially all of the property of the Issuer and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and interest, if any, on all of the Securities and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Issuer, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein as the party of the first part, and the Issuer (including any
intervening successor to the Issuer which shall have become the obligor
hereunder) shall be relieved of any further obligation under this Indenture and
the Securities; provided, however, that in the case of a sale, lease, exchange
or other disposition of the property and assets of the Issuer (including any
such intervening successor), the Issuer (including any such intervening
successor) shall continue to be liable on its obligations under this Indenture
and the Securities to the extent, but only to the extent, of liability to pay
the principal of and interest, if any, on the Securities at the time, places
and rate prescribed in this Indenture and the Securities. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Issuer, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Issuer and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Issuer and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Issuer to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as
the Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued at the date of
the execution hereof.
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In case of any such consolidation or merger or any sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the Issuer, such changes in phraseology and form (but not in
substance) may be made in the Securities, thereafter to be issued, as may be
appropriate.
SECTION 9.4 Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, may receive an Officers' Certificate and
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, lease, exchange or other disposition and any such assumption complies
with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture.
(A) If at any time (a) the Issuer shall have paid or caused to be paid
the principal of and interest, if any, on all the Securities Outstanding (other
than Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9) as and when the same shall have
become due and payable, or (b) the Issuer shall have delivered to the Trustee
for cancellation all Securities theretofore authenticated (other than
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9); and if, in any such case, the
Issuer shall also pay or cause to be paid all other sums payable hereunder by
the Issuer, then this Indenture shall cease to be of further effect, and the
Trustee, on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the
satisfaction and discharge contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction and discharging this Indenture.
The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred, and to compensate the Trustee for any
services thereafter reasonably and properly rendered, by the Trustee in
connection with this Indenture or the Securities.
(B) If at any time (a) the Issuer shall have paid or caused to be
paid the principal of, premium, if any, and interest, if any, on all the
Securities of any series Outstanding (other than Securities of such series
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.9) as and when the same shall have become due and
payable, or (b) the Issuer shall have delivered to the Trustee for cancellation
all Securities of any series theretofore authenticated (other than any
Securities of such series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9), or (c) in the case of
any series of Securities with respect to which the exact amount described in
clause (ii) below can be determined at the time of making the deposit referred
to in such clause (ii), (i) all the Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and (ii) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as funds in
trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities of such series, cash in an amount (other
than moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 10.4) or direct obligations of the United States of
America, backed by its full faith and credit ("U.S. Government Obligations"),
maturing as to principal and interest, if any, at such times and in such
amounts as will insure the availability of cash, or a combination thereof,
sufficient in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal of, premium, if any, and interest, if any, on
all Securities of such series on each date that such principal of, premium, if
any, or interest, if any, is due and payable, and (B) any mandatory sinking
fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
then the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series on the date of the deposit
referred to in clause (ii) above and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect (except,
in the case of clause (c) of this Section 10.1(B), as to (i) rights of
registration of transfer and exchange of Securities of such series, (ii) rights
of substitution of mutilated, defaced, destroyed, lost or stolen Securities of
such series, (iii) rights of Holders of Securities of such series to receive
payments of principal thereof and premium, if any, and interest, if any,
thereon upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders of Securities of such series
to receive mandatory sinking fund payments thereon, if any, when due, (iv) the
rights, obligations, duties and immunities of the Trustee hereunder, (v) the
rights of the Holders of Securities of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them
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and (vi) the obligations of the Issuer under Section 3.2 with respect to
Securities of such series) and the Trustee, on demand of the Issuer accompanied
by an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied with,
and at the cost and expense of the Issuer, shall execute proper instruments
acknowledging the same.
(C) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities with respect to which the
exact amount described in subparagraph (a) below can be determined at the time
of making the deposit referred to in such subparagraph (a), the Issuer shall be
deemed to have paid and discharged the entire indebtedness on all the
Securities of such a series on the 91st day after the date of the deposit
referred to in subparagraph (a) below, and the provisions of this Indenture
with respect to the Securities of such series shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of Securities
of such series, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Securities of such series, (iii) rights of Holders of Securities of such
series to receive payments of principal thereof, premium, if any, and interest,
if any, thereon upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders of Securities of such series
to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the Holders of Securities of such series as beneficiaries hereof with respect
to the property so deposited with the Trustee payable to all or any of them and
(vi) the obligations of the Issuer under Section 3.2 with respect to Securities
of such series) and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied with,
and at the cost and expense of the Issuer, shall execute proper instruments
acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (i) cash in an amount, or (ii) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the
principal of, premium, if any, and interest, if any, on all Securities
of such series on each date that such principal or interest, if any,
is due and payable, and (B) any mandatory sinking fund payments on the
dates on which such payments are due and payable in accordance with
the terms of the Indenture and the Securities of such series;
(b) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to
which the Issuer is a party or by which it is bound; and
(c) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling or
(y), since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not
occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 shall be held
in trust, and such moneys and all moneys from such U.S. Government Obligations
shall be applied by it to the payment, either directly or through any paying
agent (including the Issuer acting as its own paying agent), to the Holders of
the particular Securities of such series for the payment or redemption of which
such moneys and U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest,
if any, but such moneys and U.S. Government Obligations need not be segregated
from other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under the
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provisions of this Indenture with respect to such series of Securities shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest, if any, on
any Security of any series and not applied but remaining unclaimed for two
years after the date upon which such principal or interest, if any, shall have
become due and payable, shall, upon the written request of the Issuer and
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for
such series or such paying agent, and the Holder of the Securities of such
series shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, thereafter look only to the
Issuer for any payment which such Holder may be entitled to collect, and all
liability of the Trustee or any paying agent with respect to such moneys shall
thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The
Issuer shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or in
any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of the
Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Holders of Securities. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto and their successors and the Holders of
the Senior Indebtedness and the Holders of the Securities, any legal or
equitable right, remedy or claim under this Indenture or under any covenant or
provision herein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and their successors and of the Holders of
the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer, or as required pursuant to the Trust Indenture
Act of 1939, may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee)
to Seagull Energy Corporation, 1001 Fannin, Suite 1700, Houston, Texas 77002,
Attention: Chairman of the Board. Any notice, direction, request or demand by
the Issuer or any Holder of Securities to or upon the Trustee shall be deemed
to have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the Issuer)
to The Bank of New York, 101 Barclay Street, Floor 21 West, New York, New York
10286, Attention: Corporate Trust Trustee Administration.
Where this Indenture provides for notice to Holders of Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
entitled thereto, at his last address as it appears in the Security register.
Where this Indenture provides for notice in any manner, such
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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.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be reasonably satisfactory to
the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture (other than
a certificate provided pursuant to Section 4.3(d)) and delivered to the Trustee
with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such certificate
or opinion has read such covenant or condition, (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based, (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion as to whether
or not such covenant or condition has been complied with, and (d) a statement
as to whether or not, in the opinion of such person, such condition or covenant
has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters, information with respect to which is
in the possession of the Issuer, upon the certificate, statement or opinion of
or representations by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of principal of or interest, if any, on the Securities of
any series or the date fixed for redemption, purchase or repayment of any such
Security shall not be a Business Day, then payment of interest, if any, or
principal need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date of maturity
or the date fixed for redemption, purchase or repayment, and, in the case of
payment, no interest shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
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SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND
FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 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.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Issuer shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear in the
Security register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the Holder of any Security of a series designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, the CUSIP number relating to such Securities, that payment
will be made upon presentation and surrender of such Securities, that such
redemption is pursuant to the mandatory or optional sinking fund, or both, if
such be the case, that interest, if any, (or, in the case of Original Issue
Discount Securities, original issue discount) accrued to the date fixed for
redemption will be paid as specified in such notice and that on and after said
date interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a 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 date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section 12.2, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.5) an amount of money sufficient to redeem on the redemption date all the
Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest, if any, to the date fixed for
redemption. The Issuer will deliver to the Trustee at least 45 days prior to
the date fixed for redemption (unless a shorter notice period shall be
satisfactory to the Trustee) an Officers' Certificate stating the aggregate
principal amount of Securities to be redeemed. In case of a redemption at the
election of the Issuer prior to the expiration of any restriction on such
redemption, the Issuer shall deliver to the Trustee, prior to the giving of any
notice of redemption to Holders pursuant to this Section, an Officers'
Certificate stating that such restriction has been complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed. Securities may be redeemed in part
in multiples equal to the minimum authorized denomination for Securities of
such series or any multiple thereof. The Trustee shall
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promptly notify the Issuer in writing of the Securities of such series selected
for redemption and, in the case of any Securities of such series 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 of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place or places stated in such notice at the applicable
redemption price, together with interest, if any, accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest, if
any, accrued to said date) interest (or, in the case of Original Issue Discount
Securities, original issue discount) on the Securities or portions of
Securities so called for redemption shall cease to accrue, and such Securities
shall cease from and after the date fixed for redemption (unless an earlier
date shall be specified in a Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3 by or
pursuant to which the form and terms of the Securities of such series were
established) except as provided in Sections 6.5 and 10.4, to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall have no
right in respect of such Securities except the right to receive the redemption
price thereof and unpaid interest to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be paid
and redeemed by the Issuer at the applicable redemption price, together with
interest, if any, accrued thereon to the date fixed for redemption; provided
that payment of interest, if any, becoming due on or prior to the date fixed
for redemption shall be payable to the Holders of Securities registered as such
on the relevant record date subject to the terms and provisions of Sections 2.3
and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
of interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officers' Certificate delivered to the Trustee at least 45 days
prior to the last date on which notice of redemption may be given as being
owned of record and beneficially by, and not pledged or hypothecated by either
(a) the Issuer, or (b) a Person specifically identified in such written
statement as an Affiliate of the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section 12.5,
or (c) receive credit for Securities of such series (not previously so
credited) redeemed by the Issuer through any optional redemption provision
contained in the terms of such series. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (a) specifying the portion of the mandatory sinking fund payment to
be satisfied
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by payment of cash and the portion to be satisfied by credit of Securities of
such series and the basis for such credit, (b) stating that none of the
Securities of such series to be so credited has theretofore been so credited,
(c) stating that no defaults in the payment of interest or Events of Default
with respect to such series have occurred (which have not been waived or cured
or otherwise ceased to exist) and are continuing, and (d) stating whether or
not the Issuer intends to exercise its right to make an optional sinking fund
payment with respect to such series and, if so, specifying the amount of such
optional sinking fund payment which the Issuer intends to pay on or before the
next succeeding sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for the Issuer to
be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to
Section 2.10 to the Trustee with such Officers' Certificate (or reasonably
promptly thereafter if acceptable to the Trustee). Such Officers' Certificate
shall be irrevocable and upon its receipt by the Trustee the Issuer shall
become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. Failure of the Issuer, on or before any such 60th day, to
deliver such Officers' Certificate and Securities (subject to the parenthetical
clause in the second preceding sentence) specified in this paragraph, if any,
shall not constitute a default but shall constitute, on and as of such date,
the irrevocable election of the Issuer (i) that the mandatory sinking fund
payment for such series due on the next succeeding sinking fund payment date
shall be paid entirely in cash without the option to deliver or credit
Securities of such series in respect thereof, and (ii) that the Issuer will
make no optional sinking fund payment with respect to such series as provided
in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000, or a lesser sum if the Issuer shall so request with respect to
the Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest, if
any, to the date fixed for redemption. If such amount shall be $50,000 or less
and the Issuer makes no such request, then it shall be carried over until a sum
in excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section 12.2, for redemption on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall (if requested in writing by the Issuer) inform
the Issuer of the serial numbers of the Securities of such series (or portions
thereof) so selected. The Trustee, in the name and at the expense of the
Issuer (or the Issuer, if it shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the redemption of Securities of such series in part at the
option of the Issuer. The amount of any sinking fund payments not so applied
or allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section
12.5. Any and all sinking fund moneys held on the stated maturity date of the
Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of, and
interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest,
if any, accrued to the date fixed for redemption on Securities to be redeemed
on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that it
shall have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, and subject to Article Thirteen, any moneys in the sinking
fund for such series at the time when any such default or Event of Default
shall occur, and any moneys thereafter paid into the sinking fund, shall,
during the continuance of such default or Event of Default, be deemed to have
been collected under Article Five and held for the payment of all such
Securities. In case such Event of Default shall have been waived as provided
in Section 5.7 or the default cured on or before the 60th day preceding the
sinking fund payment date in any year, such moneys shall thereafter be applied
on the next succeeding sinking fund payment date in accordance with this
Section to the redemption of such Securities.
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ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Indebtedness. (a)
The Issuer covenants and agrees, and each Holder of Securities of each series,
by his acceptance thereof, likewise covenants and agrees, that anything in this
Indenture or the Securities of any series to the contrary notwithstanding, the
indebtedness evidenced by the Securities of each series is subordinate and
junior in right of payment, to the extent provided herein, to all Senior
Indebtedness, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed, and that the subordination is for the
benefit of the holders of Senior Indebtedness, but the Securities shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Issuer. The Securities shall rank senior to all existing and future
Indebtedness of the Issuer that is neither Senior Indebtedness nor Senior
Subordinated Indebtedness and only Indebtedness of the Issuer that is Senior
Indebtedness shall rank senior to the Securities in accordance with the
provisions set forth herein.
(b) Subject to Section 13.4, if (i) the Issuer shall default in
the payment of any principal of, premium, if any, or interest, if any, on any
Senior Indebtedness when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration of acceleration or
otherwise, or (ii) any other default shall occur with respect to Senior
Indebtedness and the maturity of such Senior Indebtedness has been accelerated
in accordance with its terms, then, upon written notice of such default to the
Issuer by the holders of Senior Indebtedness or any trustee therefor, unless
and until, in either case, the default has been cured or waived, and any such
acceleration has been rescinded or such Senior Indebtedness has been paid in
full, no direct or indirect payment (in cash, property, securities, by set-off
or otherwise) shall be made or agreed to be made on account of the principal
of, premium, if any, or interest, if any, on any of the Securities, or in
respect of any redemption, retirement, purchase or other acquisition of any of
the Securities other than those made in capital stock of the Issuer (or cash in
lieu of fractional shares thereof).
(c) If any default (other than a default described in paragraph
(b)) shall occur under the Senior Indebtedness, pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods occurs (a "Senior Nonmonetary Default"), then, upon
the receipt by the Issuer and the Trustee of written notice thereof (a "Payment
Notice") from or on behalf of holders of such Senior Indebtedness specifying an
election to prohibit such payment and other action by the Issuer in accordance
with the following provisions of this paragraph, the Issuer may not make any
payment or take any other action that would be prohibited by paragraph (b)
above during the period (the "Payment Blockage Period") commencing on the date
of receipt of such Payment Notice and ending on the earlier of (i) the date, if
any, on which the holders of such Senior Indebtedness or their representative
notify the Trustee that such Senior Nonmonetary Default is cured or waived or
ceases to exist or the Senior Indebtedness to which such Senior Nonmonetary
Default relates is discharged or (ii) the 179th day after the date of receipt
of such Payment Notice. Notwithstanding the provisions described in the
immediately preceding sentence, the Issuer may resume payments on the
Securities after such Payment Blockage Period.
(d) If (i) (A) without the consent of the Issuer, a receiver,
conservator, liquidator or trustee of the Issuer or of any of its property is
appointed by the order or decree of any court or agency or supervisory
authority having jurisdiction, and such decree or order remains in effect for
more than 60 days or (B) the Issuer is adjudicated bankrupt or insolvent or (C)
any of its property is sequestered by court order and such order remains in
effect for more than 60 days or (D) a petition is filed against the Issuer
under any state or federal bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution, liquidation or receivership law of any
jurisdiction whether now or hereafter in effect (including without limitation
the Bankruptcy Code), and is not dismissed within 60 days after such filing; or
(ii) the Issuer (A) commences a voluntary case or other proceeding seeking
liquidation, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or other relief with respect to itself or its debt or
other liabilities under any bankruptcy, insolvency or other similar law now or
hereafter in effect (including without limitation the Bankruptcy Code) or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or (B) consents
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
(C) fails generally to, or cannot, pay its debts generally as they become due
or (D) takes any corporate action to authorize or effect any of the foregoing;
or (iii) any Subsidiary of the Issuer takes, suffers or permits to exist any of
the events or conditions referred to in the foregoing clause (i) or (ii), then
all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other
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property, shall be made to any Holder of any Securities on account thereof.
Any payment or distribution, whether in cash, securities or other property
(other than securities of the Issuer or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect to
the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment) which would otherwise
(but for these subordination provisions) be payable or deliverable in respect
of the Securities of any series shall be paid or delivered directly to the
holders of Senior Indebtedness in accordance with the priorities then existing
among such holders until all Senior Indebtedness (including any interest
thereon accruing after the commencement of any such proceedings) shall have
been paid in full. In the event of any such proceeding, after payment in full
of all sums owing with respect to Senior Indebtedness, the Holders of the
Securities, together with the holders of any obligations of the Issuer ranking
on a parity with the Securities, shall be entitled to be paid from the
remaining assets of the Issuer the amounts at the time due and owing on account
of unpaid principal of and interest, if any, on the Securities and such other
obligations before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any capital stock or any obligations
of the Issuer ranking junior to the Securities and such other obligations.
(e) If, notwithstanding the foregoing, any payment or distribution
of any character, whether in cash, securities or other property (other than
securities of the Issuer or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof, such
payment or distribution of securities shall be received in trust for the
benefit of and shall be paid over or delivered and transferred to the holders
of the Senior Indebtedness then outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
(f) No present or future holder of any Senior Indebtedness shall
be prejudiced in the right to enforce subordination of the indebtedness
evidenced by the Securities by any act or failure to act on the part of the
Issuer or any Holder of Securities. Nothing contained herein shall impair, as
between the Issuer and the Holders of Securities of each series, the obligation
of the Issuer to pay to such Holders the principal of and interest, if any, on
such Securities or prevent the Trustee or the Holder from exercising all
rights, powers and remedies otherwise permitted by applicable law or hereunder
upon a default or Event of Default hereunder, all subject to the rights of the
holders of the Senior Indebtedness to receive cash, securities or other
property otherwise payable or deliverable to the Holders.
(g) Senior Indebtedness shall not be deemed to have been paid in
full unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness then outstanding.
Upon the payment in full of all Senior Indebtedness, the Holders of Securities
of each series shall be subrogated to all rights of any holders of Senior
Indebtedness to receive any further payment or distributions applicable to the
Senior Indebtedness until the indebtedness evidenced by the Securities of such
series shall have been paid in full and such payments or distributions received
by such Holders, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Issuer and its creditors other than the
holders of Senior Indebtedness, on the one hand, and such Holders, on the other
hand, be deemed to be a payment by the Issuer on account of Senior
Indebtedness, and not on account of the Securities of such series.
(h) The provisions of this Section 13.1 shall not impair any
rights, interests, remedies or powers of any secured creditor of the Issuer in
respect of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
(i) The securing of any obligations of the Issuer, otherwise
ranking on a parity with the Securities or ranking junior to the Securities,
shall not be deemed to prevent such obligations from constituting,
respectively, obligations ranking on a parity with the Securities or ranking
junior to the Securities.
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<PAGE> 56
SECTION 13.2 Reliance on Certificate of Liquidating Agent; Further
Evidence as to Ownership of Senior Indebtedness. Upon any payment or
distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent
jurisdiction in which such dissolution or winding up or liquidation or
reorganization or arrangement proceedings are pending or upon a certificate of
the trustee in bankruptcy, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen. In the absence of any such bankruptcy
trustee, receiver, assignee or other Person, the Trustee shall be entitled to
rely upon written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder)
as evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distributions
pursuant to this Article Thirteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, as to the extent to which such
Person is entitled to participate in such payment or distribution, and as to
other facts pertinent to the rights of such Person under this Article Thirteen,
and if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 13.3 Payment Permitted If No Default. Nothing contained
in this Article Thirteen or elsewhere in this Indenture, or in any of the
Securities, shall prevent (a) the Issuer at any time, except during the
pendency of any default with respect to Senior Indebtedness described in
Section 13.1(b) or Section 13.1(c) or of any of the events described in Section
13.1(d), from making payments of the principal of or interest, if any, on the
Securities, or (b) the application by the Trustee or any paying agent of any
moneys deposited with it hereunder to payments of the principal of or interest,
if any, on the Securities, if, at the time of such deposit, the Trustee or such
paying agent, as the case may be, did not have the written notice provided for
in Section 13.5 of any event prohibiting the making of such deposit, or if, at
the time of such deposit (whether or not in trust) by the Issuer with the
Trustee or paying agent (other than the Issuer) such payment would not have
been prohibited by the provisions of this Article Thirteen, and the Trustee or
any paying agent shall not be affected by any notice to the contrary received
by it on or after such date.
SECTION 13.4 Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Issuer to make any payment on or under any Senior
Indebtedness, other than any Senior Indebtedness as to which the provisions of
this Section 13.4 shall have been waived by the Issuer in the instrument or
instruments by which the Issuer incurred, assumed, guaranteed or otherwise
created such Senior Indebtedness, shall not be deemed a default under Section
13.1 if (i) the Issuer shall be disputing its obligation to make such payment
or perform such obligation, and (ii) either (A) no final judgment relating to
such dispute shall have been issued against the Issuer which is in full force
and effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party may
seek further appeal or review, or (B) if a judgment that is subject to further
review or appeal has been issued, the Issuer shall in good faith be prosecuting
an appeal or other proceeding for review, and a stay of execution shall have
been obtained pending such appeal or review.
SECTION 13.5 Trustee Not Charged with Knowledge of Prohibition.
Anything in this Article Thirteen or elsewhere in this Indenture contained to
the contrary notwithstanding, the Trustee shall not at any time be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of moneys to or by the Trustee and shall be entitled to assume
conclusively that no such facts exists and that no event specified in clauses
(a) and (b) of Section 13.1 has happened unless and until the Trustee shall
have received an Officers' Certificate to the effect or notice in writing to
that effect signed by or on behalf of the holder or holders, or the
representatives, of Senior Indebtedness who shall have been certified by the
Issuer or otherwise established to the reasonable satisfaction of the Trustee
to be such holder or holders or representatives or from any trustee under any
indenture pursuant to which such Senior Indebtedness shall be outstanding;
provided, however, that, if the Trustee shall not have received the Officers'
Certificate or notice provided for in this Section 13.5 at least three Business
Days preceding the date upon which by the terms hereof any moneys become
payable for any purpose (including, without limitation, the payment of either
the principal of or interest, if any, on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such moneys and apply the same to the purpose for
which they were received and shall not be affected by any notice to the
contrary that may be received by it within three Business Days preceding such
date. The Issuer shall give prompt written notice to the Trustee and to each
paying agent of any
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facts that would prohibit any payment of moneys to or by the Trustee or any
paying agent, and the Trustee shall not be charged with knowledge of the curing
of any default or the elimination of any other fact or condition preventing
such payment or distribution unless and until the Trustee shall have received
an Officers' Certificate to such effect.
SECTION 13.6 Trustee to Effectuate Subordination. Each Holder of
Securities by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as between such Holder and holders of Senior Indebtedness as
provided in this Article Thirteen and appoints the Trustee its attorney-in-fact
for any and all such purposes.
SECTION 13.7 Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article
Thirteen with respect to any Senior Indebtedness which may at the time be held
by it, to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article Thirteen shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.6.
SECTION 13.8 Article Applicable to Paying Agents. In case at any
time any paying agent other than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term "Trustee" as used in this Article
Thirteen shall in such case (unless the context shall otherwise require) be
construed as extending to and including such paying agent within its meaning as
fully for all intents and purposes as if the paying agent were named in this
Article Thirteen in addition to or in place of the Trustee; provided, however,
that Sections 13.5 and 13.7 shall not apply to the Issuer if it acts as paying
agent.
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Issuer or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Issuer
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or be otherwise charged with.
The holders of Senior Indebtedness, may at any time or from time to time and in
their absolute direction, change the manner, place or terms of payment, change
or extend the time of payment of, or renew or alter, any such Senior
indebtedness, or amend or supplement any instrument pursuant to which any such
Senior Indebtedness is issued or by which it may be secured, or release any
security therefor, or exercise or refrain from exercising any other of their
rights under the Senior Indebtedness, including, without limitation, the waiver
of default thereunder, all without notice to or assent from the Holders of the
Securities or the Trustee and without affecting the obligations of the Issuer,
the Trustee or the Holders of Securities under this Article Thirteen.
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of the Senior Indebtedness, and shall not be liable to any such holders
if it shall mistakenly pay over or distribute money or assets to
Securityholders or the Issuer. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article Thirteen
and no implied covenants or obligations with respect to holders of Senior
Indebtedness shall be read into this Indenture against the Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, effective as of September 1, 1997.
SEAGULL ENERGY CORPORATION
By:
---------------------------------
Title:
---------------------------------
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------
Title:
---------------------------------
52
<PAGE> 1
EXHIBIT 5.1
VINSON & ELKINS
ATTORNEYS AT LAW
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
1001 FANNIN STREET
HOUSTON, TEXAS 77002-6760
TELEPHONE (713) 758-2222
FAX (713) 758-2346
WRITER'S TELEPHONE WRITER'S FAX
(713) 758-2222 (713) 758-2346
September 18, 1997
Seagull Energy Corporation
1001 Fannin
Suite 1700
Houston, Texas 77060
Re: Seagull Energy Corporation (the "Company"): Registration
Statement on Form S-3 No. 333-34841 (the "Registration
Statement") under the Securities Act of 1933 (the "Act")
Ladies and Gentlemen:
We have acted as counsel for the Company, a Texas corporation,
relating to the Company's (i) unsecured debt securities, in one or more series,
consisting of notes, debentures or other evidences of indebtedness (the "Debt
Securities"), (ii) shares of preferred stock, par value $1.00 per share, in one
or more series (the "Preferred Stock"), which may be issued in the form of
depositary shares evidenced by depositary receipts (the "Depositary Shares"),
(iii) shares of common stock, par value $.10 per share (the "Common Stock"),
accompanied by rights to purchase Junior Participating Preferred Stock (the
"Rights"), and (iv) Securities Warrants ("Securities Warrants") to purchase
Debt Securities, Preferred Stock, Depositary Shares or Common Stock to be
issued from time to time pursuant to Rule 415 under the Act for an aggregate
initial offering price not to exceed $100. Each capitalized term used
herein, unless otherwise defined herein, has the meaning ascribed to it in the
Registration Statement.
Before rendering our opinion, we examined certain corporate records of
the Company, including its Articles of Incorporation, its Bylaws, and certain
resolutions of the Board of Directors of the Company. We also examined the
Registration Statement, together with the exhibits thereto, and such
certificates of officers of the Company, other documents and records as we have
deemed necessary for the purposes of this opinion. As to matters of fact
relevant to the opinions expressed herein, and as to factual matters arising in
connection with our examination of corporate documents, records and other
documents and writings, we relied upon certificates and other communications of
corporate officers of the Company, without further investigation as to the
facts set forth therein.
<PAGE> 2
Seagull Energy Corporation
Page 2
September 18, 1997
In connection with this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post-effective
amendments), will have become effective; (ii) a Prospectus Supplement will have
been prepared and filed with the Securities and Exchange Commission (the
"Commission") describing the Securities offered thereby; (iii) all Securities
will be issued and sold in compliance with applicable federal and state
securities laws and in the manner stated in the Registration Statement and the
appropriate Prospectus Supplement; (iv) a definitive purchase, underwriting or
similar agreement with respect to any Securities offered will have been duly
authorized and validly executed and delivered by the Company and the other
parties thereto; and (v) any Securities issuable upon conversion, exchange or
exercise of any Security being offered will be duly authorized, created and,
if appropriate, reserved for issuance upon such conversion, exchange or
exercise.
Based upon the foregoing, we are of the opinion that:
(a) with respect to Debt Securities to be issued under either of
the Indentures, when (i) the Indentures have been duly
qualified under the Trust Indenture Act of 1939, as amended;
(ii) the Board (as hereinafter defined) has taken all
necessary corporate action to approve the issuance and terms
of such Debt Securities, the terms of the offering thereof and
related matters; and (iii) such Debt Securities have been duly
executed, authenticated, issued and delivered in accordance
with the provisions of the applicable Indenture and either (a)
in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon
payment of the consideration therefor provided for therein, or
(b) upon exercise of any other Security, in accordance with
the terms of such Security or the instrument governing such
Security providing for such exercise as approved by the Board,
for the consideration approved by the Board, such Debt
Securities will be legally issued and will constitute valid
and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as such
enforcement is subject to any applicable bankruptcy,
insolvency, reorganization or other law relating to or
affecting creditors' rights generally and general principles
of equity;
(b) with respect to shares of Preferred Stock, when (i) the Board
has taken all necessary corporate action to approve the
issuance and terms of the shares of Preferred Stock, the terms
of the offering thereof and related matters, including the
adoption of a statement establishing relative rights and
preferences relating to such Preferred Stock and the filing of
such statement with the Secretary of State of the State of
Texas; and (ii) certificates representing the shares of
Preferred Stock have been duly executed, countersigned,
registered and delivered either (a) in accordance with the
applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the
consideration therefor provided for therein, or (b) upon
exercise of any other Security, in accordance with the terms
of such Security or the instrument governing such Security
providing for such exercise as approved by the Board, for
<PAGE> 3
Seagull Energy Corporation
Page 3
September 18, 1997
the consideration approved by the Board, the shares of
Preferred Stock will be duly authorized, validly issued, fully
paid and nonassessable;
(c) with respect to the Depositary Shares, when the terms of the
Depositary Shares and of their issuance and sale have been
duly established in conformity with applicable law, the
Deposit Agreement relating to the Depositary Shares has been
duly executed and delivered, and the Preferred Stock that is
represented by Depositary Shares has been duly issued and
delivered to the depositary as contemplated in paragraph (b)
above, and Depositary Receipts evidencing the Depositary
Shares have been duly issued against the deposit of Preferred
Stock in accordance with the Deposit Agreement, the Depositary
Receipts will be validly issued;
(d) with respect to shares of Common Stock, when (i) the Board of
Directors of the Company or, to the extent permitted by
Article 2.13 of the Texas Business Corporation Act, a duly
constituted and acting committee thereof (such Board of
Directors or committee being referred to herein as the
"Board"), has taken all necessary corporate action to approve
the issuance of and the terms of the offering of the shares of
Common Stock and related matters; and (ii) certificates
representing the shares of Common Stock have been duly
executed, countersigned, registered and delivered either (a)
in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon
payment of the consideration therefor (not less than the par
value of the Common Stock) provided for therein, or (b) upon
conversion, exchange or exercise of any other Security in
accordance with the terms of such Security or the instrument
governing such Security providing for such conversion,
exchange or exercise as approved by the Board, for the
consideration approved by the Board (not less than the par
value of the Common Stock), (X) the shares of Common Stock
will be duly authorized, validly issued, fully paid and
nonassessable and (Y) the Rights, assuming that they are
issued prior to the Distribution Date (as defined in the
Rights Agreement) and prior to the redemption or termination
of the Rights, will be validly issued, fully paid,
nonassessable and the holders thereof will be entitled to the
benefits of the Rights Agreement; provided, however, that we
express no opinion as to the anti-dilution provision contained
in the Rights Agreement; and
(e) with respect to the Securities Warrants, when (i) the Board
has taken all necessary corporate action to approve the
creation of and the issuance and terms of the Securities
Warrants, the terms of the offering thereof and related
matters; (ii) the Securities Warrant Agreement and other
agreements relating to the Securities Warrants have been duly
authorized and validly executed and delivered by the Company
and the warrant agent appointed by the Company; and (iii) the
Securities Warrants or certificates representing the
Securities Warrants have been duly executed, countersigned,
registered and delivered in accordance with the appropriate
Securities
<PAGE> 4
Seagull Energy Corporation
Page 4
September 18, 1997
Warrant Agreement, any other agreements relating to the
Securities Warrants and the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon
payment of the consideration therefor provided for therein, the
Securities Warrants will be duly authorized and validly issued.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. By giving such consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission issued thereunder. For
purposes of this opinion, we assume that the securities to be issued pursuant
to the Registration Statement will be issued in compliance with all applicable
state securities or Blue Sky laws.
Very truly yours,
VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Seagull Energy Corporation:
We consent to the incorporation by reference in the registration
statement on Form S-3 (No. 333-34841) of Seagull Energy Corporation of our
report dated January 27, 1997, relating to the consolidated balance sheets of
Seagull Energy Corporation and Subsidiaries as of December 31, 1996 and 1995
and the related consolidated statements of operations, shareholders' equity and
cash flows for each of the years in the three-year period ended December 31,
1996, which report is incorporated by reference in the December 31, 1996 Annual
Report on Form 10-K of Seagull Energy Corporation and to the reference to our
firm under the heading "Experts" in the prospectus. Our report on the
consolidated financial statements refers to a change in the Company's method of
accounting for the impairment of long-lived assets and for long-lived assets to
be disposed of.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
September 17, 1997
