<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File Number 1-6446
KINDER MORGAN, INC.
-------------------
(Exact name of issuer as specified in its charter)
<TABLE>
<CAPTION>
Kansas
------ 48-0290000
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
1301 McKinney, Suite 3400, Houston, Texas 77010
----------------------------------------- -----
(Address of principal executive offices) (Zip Code)
</TABLE>
(713) 844-9500
--------------
Registrant's telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
Title of Each Class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, par value $5 per share New York Stock Exchange
Preferred share purchase rights New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Preferred Stock, Class A $5 cumulative series
---------------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulations S-K is not contained herein, and will not be contained
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by referenced in Part III of this Form 10-K or any
amendment to this Form 10-K.[ ].
The aggregate market value of the voting stock held by nonaffiliates
of the registrant was $2,168,755,111 as of March 10, 2000.
The number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date was: Common stock, $5 par
value; authorized 150,000,000 shares; outstanding 113,035,166 shares as of
March 10, 2000.
Documents Incorporated by Reference
-----------------------------------
Part III of this report incorporates by reference specific portions of the
Registrant's Proxy Statement relating to the 2000 Annual Meeting of
Stockholders.
<PAGE> 2
KINDER MORGAN, INC.
FORM 10-K/A
AMENDMENT NO. 1
This Report on Form 10-K/A (Amendment No. 1) is filed by Kinder
Morgan, Inc. (the "Registrant") for the purposes of (i) revising certain
sections of Item 14 to the Report on Form 10-K for the year ended December 31,
1999 previously filed by the Registrant, and (ii) filing certain exhibits
including exhibits which were previously incorporated by reference on the Form
10-K.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
Subsections (a)(1) and (a)(2) of Item 14 which were previously filed with the
Form 10-K are hereby incorporated by reference from the Form 10-K without any
changes or amendments.
The section of Item 14 entitled "Executive Compensation Plans and Arrangements"
is hereby amended and supplemented by replacing the current text of that
section in its entirety with the following:
Executive Compensation Plans and Arrangements
1987 Directors' Deferred Fee Plan As Amended and Form of
Participation Agreement regarding the Plan (Exhibit 10(h) to the
Annual Report on Form 10-K for the year ended December 31, 1995)
Kinder Morgan, Inc. Amended and Restated 1992 Stock Option Plan
for Nonemployee Directors (Appendix C to the Kinder Morgan, Inc. 2000
Proxy Statement on Schedule 14-A)
1994 Amended and Restated Kinder Morgan, Inc. Long-term Incentive
Plan (Appendix A to the Kinder Morgan, Inc. 2000 Proxy Statement on
Schedule 14A)
K N Energy, Inc. Nonqualified Deferred Compensation Plan*
Letter Agreement dated December 4, 1995 between K N Energy, Inc.
and Charles W. Battey (Exhibit 10(q) to the Annual Report on Form 10-K
for the year ended December 31, 1995)
Form of Incentive Stock Option Agreement (Exhibit 10(v) to the
Annual Report on Form 10-K for the year ended December 31, 1996)
Form of Restricted Stock Agreement (Exhibit 10(w) to the Annual
Report on Form 10-K for the year ended December 31, 1996)
Directors and Executives Deferred Compensation Plan effective
January 1, 1998 for executive officers and directors of K N Energy,
Inc. (Exhibit 10(aa) to the Annual Report on Form 10-K for the year
ended December 31, 1998)
Management Deferred Compensation Plan effective January 1, 1998
for senior management of K N Energy, Inc. (Exhibit 10(bb) to the
Annual Report on Form 10-K for the year ended December 31, 1998)
Confidentiality Agreement and General Release between Larry D.
Hall and KN Energy, Inc. dated October 4, 1999*
Employment Agreement dated October 7, 1999, between the Company
and Richard D. Kinder (incorporated by reference to Exhibit 99.D of
the Schedule 13D filed by Mr. Kinder on October 8, 1999)
Kinder Morgan, Inc. Amended and Restated 1999 Stock Option Plan
(Appendix B to the Kinder Morgan, Inc. 2000 Proxy Statement on
Schedule 14A)
-2-
<PAGE> 3
Kinder Morgan, Inc. Employees Stock Purchase Plan (Appendix E to
the Kinder Morgan, Inc. 2000 Proxy Statement on Schedule 14A)
2000 Annual Incentive Plan of Kinder Morgan, Inc. (Appendix D to
the Kinder Morgan, Inc. 2000 Proxy Statement on Schedule 14A)
*Filed herewith.
Subsection (b) of Item 14 entitled "Reports on Form 8-K" which was previously
filed with the Form 10-K is hereby amended and supplemented by adding the
following paragraph at the end of the subsection:
Current Report on Form 8-K dated April 5, 2000, was filed on April 20,
2000, pursuant to Item 2 and Item 7 of that form. Pursuant to Item 2
of that form, Kinder Morgan disclosed that Kinder Morgan and certain
of its subsidiaries had completed the disposition of certain assets to
ONEOK, Inc. pursuant to an agreement dated as of February 8, 2000 with
ONEOK, Inc., as amended on April 5, 2000. The agreement provided for
the sale to ONEOK, Inc. of (i) all of Kinder Morgan's natural gas
gathering and processing business in Oklahoma, Kansas and West Texas,
(ii) Kinder Morgan's marketing and trading business, and (iii) certain
of Kinder Morgan's storage and transmission pipelines in the
mid-continent region. According to the agreement, ONEOK (i) paid
approximately $108 million plus an amount equal to net working capital
at closing, (ii) assumed the operating lease associated with the
Bushton, Kansas gas processing plant and (iii) assumed long-term
capacity commitments on NGPL and on KMIGT. Also, Kinder Morgan
disclosed that on April 5, 2000, Kinder Morgan issued a press release.
Pursuant to Item 7 of that form, the amendment to the agreement with
ONEOK and the press release were filed as exhibits.
The Exhibit Index previously filed with the Form 10-K is hereby amended and
supplemented by replacing the current text in its entirety and substituting the
Exhibit Index filed herein.
-3-
<PAGE> 4
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
KINDER MORGAN, INC.
(Registrant)
Date: May 22, 2000
By: /s/ Joseph Listengart
--------------------------------------
Joseph Listengart
Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
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* Director
- --------------------------------------------
Edward H. Austin, Jr.
* Director
- --------------------------------------------
Charles W. Battey
* Director
- --------------------------------------------
Stewart A. Bliss
* Director
- --------------------------------------------
Ted A. Gardner
* Director
- --------------------------------------------
William J. Hybl
*
- -------------------------------------------- Chairman, Chief Executive Officer and
Richard D. Kinder and Director (Principal Executive Officer)
* Vice Chairman, President and Director
- --------------------------------------------
William V. Morgan
* Director
- --------------------------------------------
Edward Randall, III
* Director
- --------------------------------------------
Fayez Sarofim
*
- -------------------------------------------- Vice President and Chief Financial Officer
C. Park Shaper (Principal Financial and Accounting Officer)
* Director
- --------------------------------------------
H. A. True, III
*By: /s/ Joseph Listengart
------------------------------------------
Joseph Listengart
(Attorney-in-fact for persons indicated)
</TABLE>
-4-
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
List of Executive Compensation Plans and Arrangements.........2-3
Exhibit 2(a) - Agreement and Plan of Merger, dated as of July 8,
1999, by and among K N Energy, Inc., Rockies Merger Corp.,
and Kinder Morgan, Inc., (Annex A-1 of Registration Statement
on Form S-4 (File No. 333-85747))
Exhibit 2(b) - First Amendment to Agreement and Plan of Merger, dated
as of August 20, 1999, by and among K N Energy, Inc.,
Rockies Merger Corp., and Kinder Morgan, Inc., (Annex A-2 of
Registration Statement on Form S-4 (File No. 333-85747))
Exhibit 2(c) - Contribution Agreement, dated as of December 30, 1999,
by and among Kinder Morgan, Inc., Natural Gas Pipeline
Company of America, K N Gas Gathering, Inc., Kinder Morgan
G.P., Inc. and Kinder Morgan Energy Partners, L.P. (Exhibit
99.1 to Current Report on Form 8-K filed on January 14, 2000)
Exhibit 3(a) - Restated Articles of Incorporation of Kinder Morgan, Inc.*
Exhibit 3(b) - Certificate of Amendment to the Restated Articles of
Incorporation of Kinder Morgan, Inc. as filed on October 7,
1999, with the Secretary of State of Kansas (Exhibit 3.1 to
Kinder Morgan, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999)
Exhibit 3(c) - Bylaws of Kinder Morgan, Inc., as amended to October 7, 1999
(Exhibit 3.2 to Kinder Morgan, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended September 30, 1999)
Exhibit 4(a) - Indenture dated as of September 1, 1988, between K N Energy,
Inc. and Continental Illinois National Bank and Trust Company
of Chicago*
Exhibit 4(b) - First supplemental indenture dated as of January 15, 1992,
between K N Energy, Inc. and Continental Illinois National
Bank and Trust Company of Chicago (Exhibit 4.2, File No.
33-45091)
Exhibit 4(c) - Second supplemental indenture dated as of December 15, 1992,
between K N Energy, Inc. and Continental Bank, National
Association*
Exhibit 4(d) - Indenture dated as of November 20, 1993, between K N Energy,
Inc. and Continental Bank, National Association (Exhibit 4.1,
File No. 33-51115) Note - Copies of instruments relative to
long-term debt in authorized amounts that do not exceed 10
percent of the consolidated total assets of Kinder Morgan and
its subsidiaries have not been furnished. Kinder Morgan will
furnish such instruments to the Commission upon request.
Exhibit 4(e) - $600,000,000 364-Day Credit Agreement among K N Energy, Inc.,
certain banks listed therein and Morgan Guaranty Trust
Company of New York as Administrative Agent (Exhibit 4(e) to
the Annual Report on Form 10-K for the year ended December
31, 1997)
Exhibit 4(f) - $400,000,000 Five-Year Credit Agreement among K N Energy,
Inc., certain banks listed therein and Morgan Guaranty Trust
Company of New York as Administrative Agent (Exhibit 4(f) to
the Annual Report on Form 10-K for the year ended December
31, 1997)
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
Exhibit 4(g) - $2,100,000,000 364-Day Credit Agreement among K N Energy,
Inc., certain banks listed therein and Morgan Guaranty Trust
Company of New York as Administrative Agent (Exhibit 4(g) to
the Annual Report on Form 10-K for the year ended December
31, 1997)
Exhibit 4(h) - $1,394,846,122 Reimbursement Agreement among K N Energy, Inc.,
certain banks listed therein and Morgan Guaranty Trust
Company of New York as Administrative Agent (Exhibit 4(e) to
the Annual Report on Form 10-K for the year ended December
31, 1997)
Exhibit 4(i) - Purchase Contract Agreement dated as of November 25, 1998,
between K N Energy, Inc. and U.S. Bank Trust National
Association, as Purchase Contract Agent for the PEPS Units
(Exhibit 4.4 to the Current Report on Form 8-K dated November
24, 1998)
Exhibit 4(j) - Amendment No. 1 to Credit Agreements dated as of November 6,
1998, among K N Energy, Inc., certain banks listed therein
and Morgan Guaranty Trust Company of New York as
Administrative Agent (Exhibit 4(j) to the Annual Report on
Form 10-K for the year ended December 31, 1998)
Exhibit 4(k) - $600,000,000 364-Day Credit Agreement dated as of January 8,
1999, among K N Energy, Inc., certain banks listed therein
and Morgan Guaranty Trust Company of New York as
Administrative Agent (Exhibit 4(k) to the Annual Report on
Form 10-K for the year ended December 31, 1998)
Exhibit 4(l) - Amendment No. 2 to the $400,000,000 Five-Year Credit
Agreement, dated as of January 8, 1999, among K N Energy,
Inc., certain banks listed therein and Morgan Guaranty Trust
Company of New York as Administrative Agent (Exhibit 4(l) to
the Annual Report on Form 10-K for the year ended December
31, 1998)
Exhibit 4(m) - $550,000,000 364-day Credit Agreement, dated as of November
18, 1999, among Kinder Morgan, Inc., certain banks listed
therein and Bank of America, N.A., as Administrative Agent
(Exhibit 4(m) to the Annual Report on Form 10-K for the year
ended December 31, 1999)
Exhibit 4(n) - Rights Agreement between K N Energy, Inc. and the Bank of New
York, as Rights Agent, dated as of August 21, 1995 (Exhibit 1
on Form 8-A dated August 21, 1995)
Exhibit 4(o) - Amendment No. 1 to Rights Agreement between K N Energy, Inc.
and the Bank of New York, as Rights Agent, dated as of
September 8, 1998 (Exhibit 10(cc) to the Annual Report on
Form 10-K for the year ended December 31, 1998)
Exhibit 4(p) - Amendment No. 2 to Rights Agreement of Kinder Morgan, Inc.
dated July 8, 1999, between Kinder Morgan, Inc. and First
Chicago Trust Company of New York, as successor-in-interest
to the Bank of New York, as Rights Agent (Exhibit 4.1 to
Kinder Morgan, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999)
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
Exhibit 10(a) - 1987 Directors' Deferred Fee Plan As Amended and Form of
Participation Agreement regarding the Plan (Exhibit 10(h) to
the Annual Report on Form 10-K for the year ended December
31, 1995)
Exhibit 10(b) - Kinder Morgan, Inc. Amended and Restated 1992 Stock Option
Plan for Nonemployee Directors (Appendix C to the Kinder
Morgan, Inc. 2000 Proxy Statement on Schedule 14A)
Exhibit 10(c) - 1994 Amended and Restated Kinder Morgan, Inc. Long-term
Incentive Plan (Appendix A to the Kinder Morgan, Inc. 2000
Proxy Statement on Schedule 14A)
Exhibit 10(d) - K N Energy, Inc. Nonqualified Deferred Compensation Plan*
Exhibit 10(e) - Letter Agreement dated December 4, 1995 between K N Energy,
Inc. and Charles W. Battey (Exhibit 10(q) to the Annual
Report on Form 10-K for the year ended December 31, 1995)
Exhibit 10(f) - Kinder Morgan, Inc. Employees Stock Purchase Plan (Appendix E
to the Kinder Morgan, Inc. 2000 Proxy Statement on Schedule
14A)
Exhibit 10(g) - 2000 Annual Incentive Plan of Kinder Morgan, Inc. (Appendix D
to the Kinder Morgan, Inc. 2000 Proxy Statement on Schedule
14A)
Exhibit 10(h) - Confidentiality Agreement and General Release between
Larry D. Hall and K N Energy, Inc. dated October 4, 1999*
Exhibit 10(i) - Amended and Restated Basket Agreement dated as of June 30,
1990, by and between American Pipeline Company ("APC"), Cabot
and Cabot Transmission Corporation*
Exhibit 10(j) - First Amendment to Amended and Restated Omnibus Acquisition
Agreement and Amended and Restated Basket Agreement dated as
of March 31, 1992, by and among AOG, APC, Cabot and Cabot
Transmission*
Exhibit 10(k) - Form of Incentive Stock Option Agreement (Exhibit 10(v) to
the Annual Report on Form 10-K for the year ended December
31, 1996)
Exhibit 10(l) - Form of Restricted Stock Agreement (Exhibit 10(w) to the
Annual Report on Form 10-K for the year ended December 31,
1996)
Exhibit 10(m) - Intrastate Pipeline System Lease, dated December 31, 1996,
between MidCon Texas Pipeline, L.P. and MidCon Texas Pipeline
Operator, Inc. (Exhibit 10(y) to the Annual Report on Form
10-K for the year ended December 31, 1997)
Exhibit 10(n) - Amendment Number One To Intrastate Pipeline System Lease,
dated January 31, 1998, between MidCon Texas Pipeline, L.P.
and MidCon Texas Pipeline Operator, Inc. (Exhibit 10(z) to
the Annual Report on Form 10-K for the year ended December
31, 1997)
Exhibit 10(o) - Directors and Executives Deferred Compensation Plan effective
January 1, 1998 for executive officers and directors of K N
Energy, Inc. (Exhibit 10(aa) to the Annual Report on Form
10-K for the year ended December 31, 1998)
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C>
Exhibit 10(p) - Management Deferred Compensation Plan effective January 1,
1998 for senior management of K N Energy, Inc. (Exhibit
10(bb) to the Annual Report on Form 10-K for the year ended
December 31, 1998)
Exhibit 10(q) - Kinder Morgan, Inc. Amended and Restated 1999 Stock Option
Plan (Appendix B to the Kinder Morgan, Inc. 2000 Proxy
Statement on Schedule 14A)
Exhibit 10(r) - Stock Purchase Agreement, dated December 18, 1997, between
K N Energy, Inc. and Occidental Petroleum Corporation (Exhibit
2.1, File No. 333-44421)
Exhibit 10(s) - Amendment No. 1 to Stock Purchase Agreement, dated January
30,1998, between K N Energy, Inc. and Occidental Petroleum
Corporation (Exhibit 2(b) to the Annual Report on Form 10-K
for the year ended December 31, 1997)
Exhibit 10(t) - Governance Agreement dated October 7, 1999, between Kinder
Morgan, Inc. and Richard D. Kinder (Exhibit 99.C of the
Schedule 13D filed by Mr. Kinder on October 8, 1999)
Exhibit 10(u) - Governance Agreement dated October 7, 1999, between Kinder
Morgan, Inc. and Morgan Associates, Inc. (Exhibit 99.C of the
Schedule 13D filed by Morgan Associates, Inc. and William V.
Morgan on October 8, 1999)
Exhibit 10(v) - Employment Agreement dated October 7, 1999, between the
Company and Richard D. Kinder (Exhibit 99.D of the
Schedule 13D filed by Mr. Kinder on October 8, 1999)
Exhibit 10(w) - Receivables Purchase Agreement dated September 28, 1999,
among K N Receivables Corporation, as Seller, Falcon Asset
Securitization Corporation, International Securitization
Corporation and The Financial Institutions Party Hereto, as
Investors and Bank One, NA, as agent (Exhibit 10.4 to Kinder
Morgan, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999)
Exhibit 10(x) - Receivables Sale Agreement dated September 28, 1999, between
K N Energy, Inc., as the Originator, and other Originators
specified herein and K N Receivables Corporation, as Buyer
(Exhibit 10.5 to Kinder Morgan, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended September 30, 1999)
Exhibit 13 - 1999 Annual Report to Shareholders (Exhibit 13 to the Annual
Report on Form 10-K for the year ended December 31, 1999)
Exhibit 21 - Subsidiaries of the Registrant (Exhibit 21 to the Annual
Report on Form 10-K for the year ended December 31, 1999)
Exhibit 23.1 - Consent of Independent Accountants (Exhibit 23.1 to the
Annual Report on Form 10-K for the year ended December 31,
1999)
Exhibit 23.2 - Consent of Independent Public Accountants (Exhibit 23.2 to
the Annual Report on Form 10-K for the year ended December
31, 1999)
Exhibit 24.1 - Power of Attorney*
Exhibit 27 - Financial Data Schedule (Exhibit 27 to the Annual Report on
Form 10-K for the year ended December 31, 1999)
</TABLE>
* Filed herewith.
<PAGE> 1
EXHIBIT 3(a)
CERTIFICATE OF RESTATEMENT OF ARTICLES OF INCORPORATION
OF
K N ENERGY, INC.
STATE OF KANSAS )
) Section
COUNTY OF PHILLIPS )
We, Larry D. Hall, President and William S. Garner, Jr., Secretary of
K N Energy, Inc., a Kansas corporation (herein called the "Corporation"), whose
registered office is in Phillipsburg, Phillips County, Kansas, DO HEREBY
CERTIFY:
That the Board of Directors of the Corporation, at a regular meeting
duly held on the 23rd of May, 1989, adopted a resolution setting forth Restated
Articles of Incorporation of the Corporation, and declared their advisability.
Said Restated Articles of Incorporation were amended with approval of the
Corporation's Shareholders on July 13, 1994, and are as follows, namely:
K N, ENERGY, INC.
--------------------
RESTATED ARTICLES OF INCORPORATION
--------------------
The following are the Restated Articles of Incorporation of K N
Energy, Inc., which corporation was originally incorporated under the name of
Kansas Pipe Line & Gas Company in Articles filed with the Secretary of State of
Kansas on May 18, 1927. These Restated Articles were duly adopted by the Board
of Directors of the Company at their regular meeting on August 16, 1988 in
accordance with the provisions of Section 17-6605 of the
<PAGE> 2
Kansas Statutes Annotated.
FIRST
The name of the Corporation shall be K N ENERGY, INC.
SECOND
The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the Kansas General Corporation Code.
THIRD
The location of the principal place of business of the Corporation and
its registered office in this state is 205 "F" Street, City of Phillipsburg,
Phillips County, Kansas. The Corporation shall be its own Resident Agent and
for such purpose its business office shall be its registered office.
FOURTH
That the term for which the Corporation is to exist is perpetual.
FIFTH
SECTION 1
Except as otherwise provided in Article Sixth, the number of directors
which shall constitute the whole Board of Directors of the Corporation shall be
the number from time to time fixed by the By-laws of the Corporation; provided
that such number of directors shall not be less than nine, nor more than
fifteen, each of whom shall be a stockholder of the Corporation; and
2
<PAGE> 3
provided, further, that any change in such minimum or maximum number of
directors shall be made only by amendment of this Article Fifth. Nominees for
directorships receiving the highest number of votes shall be elected. The Board
of Directors shall be divided into three classes: Class I, Class II, and Class
III. Such classes shall be as nearly equal in number as possible. The term of
office of the initial Class I directors shall expire at the annual meeting of
the stockholders in 1976; the term of office of the initial Class II directors
shall expire at the annual meeting of stockholders in 1977; and the term of
office of the initial Class III directors shall expire at the annual meeting of
stockholders in 1978, or thereafter in each case when their respective
successors are elected and qualified. At each annual election held thereafter,
the directors chosen to succeed those whose terms have expired shall be
identified as being of the same class as the directors that they succeed and
shall be elected for a term expiring at the third succeeding annual meeting of
stockholders or thereafter in each case when their respective successors are
elected and qualified. When the number of directors is changed any increase or
decrease in the number of directorships shall be apportioned among the classes
so as to make all classes as nearly equal in number as possible.
SECTION 2
No director of the Corporation shall be removed from his office as a
director unless all other directors constituting the Board of Directors at the
time unanimously vote in favor of such
3
<PAGE> 4
removal, in which event his removal shall be considered accomplished. No
director of the Corporation shall be removed from his office as a director by
vote or other action of stockholders or otherwise unless the director to be
removed has been convicted of a felony by a court of competent jurisdiction and
such conviction has become no longer subject to direct appeal or unless the
director to be removed has been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation by a court of
competent jurisdiction and such adjudication has become no longer subject to
direct appeal. In the event of such conviction, or finding of negligence or
misconduct a director may be removed by the stockholders in the manner provided
in the By-laws of the Corporation.
SIXTH
SECTION 1
The minimum amount of capital with which the Corporation will commence
business is $l,000.00.
SECTION 2
1. That the total number of shares of all classes of stock which the
Corporation shall have authority to issue shall be 27,200,000.
2. That the number of shares which are to have a par value shall be
50,000,000 of the par value of $5 each, all of which shares shall be one class
of common stock (hereinafter referred to as the "Common Stock").
3. That the number of shares that are to be without par
4
<PAGE> 5
value shall be 2,200,000, of which 200,000 shall be Class A Preferred Stock
(hereinafter referred to as the "Class A Preferred Stock"), and of which
2,000,000 shall be Class B Preferred Stock (hereinafter referred to as the
"Class B Preferred Stock").
5
<PAGE> 6
SECTION 3
1. Definitions. As used in this Article Sixth or in any resolution
adopted by the Board of Directors providing for the issue of any particular
series of Class A Preferred Stock or Class B Preferred Stock authorized by
these Articles of Incorporation or any amendment thereto, the following terms
shall have the following meanings, respectively:
(a) The term "arrearages", whenever used in connection with
dividends on any share of Class A Preferred Stock or Class B Preferred
Stock, shall refer to the condition that exists as to dividends, to
the extent that they are cumulative (either unconditionally, or
conditionally to the extent that the conditions have been fulfilled),
on such shares which shall not have been paid or declared and set
apart for payment to the date or for the period indicated; but the
term shall not refer to the condition that exists as to dividends, to
the extent that they are non-cumulative, on such shares which shall
not have been paid or declared and set apart for payment.
(b) The term "stock junior to the Class A Preferred Stock",
whenever used with reference to the Class A Preferred Stock, shall
mean the Class B Preferred Stock, Common Stock and any other stock of
the Corporation over which the Class A Preferred Stock has preference
or priority in the payment of dividends and in the distribution of
assets on any dissolution, liquidation or winding up of the
Corporation.
6
<PAGE> 7
(c) The term "stock junior to the Class B Preferred Stock",
whenever used with reference to the Class B Preferred Stock, shall
mean the Common Stock and any other stock of the Corporation over
which the Class B Preferred Stock has preference or priority in the
payment of dividends and in the distribution of assets on any
dissolution, liquidation or winding up of the Corporation.
(d) The term "subsidiary" means any corporation of which at
least a majority of the outstanding stock having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation, irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency, is, at the
time of determination thereof, directly or indirectly owned by the
Corporation, or by one or more subsidiaries of the Corporation, or by
the Corporation and one or more subsidiaries. As used in this
definition, the term "corporation" shall include comparable types of
business organizations authorized under the laws of any state,
territory or possession of the United States or any foreign country
however designated.
SECTION 4
That the voting powers (full or limited, or without voting powers)
designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations
7
<PAGE> 8
or restrictions thereof, of the shares of Class A Preferred Stock, Class B
Preferred Stock and Common Stock and the authority of the Board of Directors of
the Corporation to fix by resolution such of the voting powers, designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof (sometimes hereinafter
referred to in this Article Sixth as "powers, preferences and rights"), are as
follows:
A. CLASS A PREFERRED STOCK
1. Authority of the Board of Directors of the Corporation to issue
Class A Preferred Stock in Series. The Class A Preferred Stock consists of (i)
shares constituting a series designated and hereinafter referred to as "Class A
$5 Cumulative Preferred Stock", shares of which have heretofore been issued and
designated as "$5 Cumulative Preferred Stock", (ii) shares constituting a
series designated and hereinafter referred to as "Class A $5.65 Cumulative
Preferred Stock", shares of which have heretofore been issued and designated as
"$5.65 Cumulative Preferred Stock", and (iii) additional authorized shares the
issuance of which may be provided for by the Board of Directors of the
Corporation as set forth in this Subdivision A of Section 4. The voting powers
(full or limited, or without voting powers), designations, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions, not inconsistent with the provisions of this
Article Sixth, of the Class A $5 Cumulative Preferred Stock and of the Class A
$5.65 Cumulative Preferred
8
<PAGE> 9
Stock are respectively fixed by and set forth in paragraph 9 of this
Subdivision A of Section 4 and in the Certificate of Resolutions adopted by the
Board of Directors of the Corporation providing for the issuance of shares of
the Class A $5.65 Cumulative Preferred Stock filed in the office of the
Secretary of State of Kansas on September 28, 1953.
The Class A Preferred Stock may be issued from time to time in one or
more series. Subject to the provisions of these Articles of Incorporation or
any amendment thereto, authority is expressly granted to the Board of Directors
of the Corporation to authorize the issue of one or more series of Class A
Preferred Stock, and to fix by resolutions providing for the issue of each such
series the powers, preferences and rights thereof, to the full extent now or
hereafter permitted by law, including but not be limited to the following:
(a) The number of shares of such series (which may
subsequently be increased by resolutions of the Board of Directors of
the Corporation) and the distinctive designation thereof;
(b) The dividend rate of such series and any limitations,
restrictions or conditions on the payment of such dividends;
(c) The terms and conditions, if any, on which, and the price
or prices at which, the shares of such series may be redeemed;
(d) The terms of any purchase, retirement or sinking fund to
be provided for the shares of such series;
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<PAGE> 10
(e) Restrictions upon the declaration or payment of dividends
or other distributions on, or the acquisition or retirement by the
Corporation of, the Common Stock to take effect upon the occurrence of
any default in the provisions for a sinking fund, if any, for the
particular series and to remain in effect so long as such default
continues; and provisions extending for the benefit of the particular
series for so long as any shares thereof remain outstanding, similar
restrictions with respect to the stock of the Corporation imposed by
the terms of any of its funded indebtedness then outstanding;
(f) The terms and conditions, if any, upon which the shares of
such series shall be convertible into or exchangeable for shares of
any other class or classes, or of any other series of the same or any
class or classes of stock of the Corporation;
(g) The voting powers, if any, of such series in addition to
the voting powers provided in paragraphs 5 and 8 of Subdivision A of
Section 4; and
(h) Any other variance in the relative powers, preferences and
rights as between different series not inconsistent with these
Articles of Incorporation or any amendments thereto, to the full
extent now or hereafter allowed by law.
The Class A Preferred Stock of each series shall rank on a parity with
the Class A Preferred Stock of every other series in
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<PAGE> 11
priority of payment of dividends and in the distribution of assets in the event
of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, to the extent of the preferential amounts to which
the Class A Preferred Stock of the respective series shall be entitled under
the provisions of these Articles of Incorporation or any amendment thereto or
the resolutions of the Board of Directors of the Corporation providing for the
issue of such series. All shares of any one series of Class A Preferred Stock
shall be identical except as to the dates of issue and the dates from which
dividends on shares of the series issued on different dates shall accumulate
(if cumulative).
2. Dividend rights.
(a) The holders of shares of Class A Preferred Stock of each
series shall be entitled to receive, when and as declared by the Board
of Directors of the Corporation, preferential dividends, from the date
fixed by the resolutions of the Board of Directors of the Corporation
authorizing the issuance thereof, in cash payable at such rate, from
such date, and on such quarterly dividend payment dates and, if
cumulative, cumulative from such date or dates, as may be fixed by the
provisions of these Articles of Incorporation or any amendment thereto
or by the resolutions of the Board of Directors of the Corporation
providing for the issue of such series. The holders of shares of Class
A Preferred Stock shall not be entitled to receive any dividends
thereon other than those specifically provided for by these Articles
of Incorporation
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<PAGE> 12
or any amendment thereto, or such resolutions of the Board of
Directors of the Corporation, nor shall any arrearages in dividends on
the Class A Preferred Stock bear any interest.
(b) So long as any of the Class A Preferred Stock is
outstanding, no dividends (other than dividends payable in stock
junior to the Class A Preferred Stock and cash in lieu of fractional
shares in connection with any such dividend) shall be paid or declared
in cash or otherwise, nor shall any other distribution be made, on any
stock junior to the Class A Preferred Stock, unless
(i) there shall be no arrearages in dividends on the Class
A Preferred Stock for any past quarterly dividend period, and
dividends in full for the current quarterly dividend period
shall have been paid or declared on all of the Class A
Preferred Stock (cumulative and non-cumulative); and
(ii) the Corporation shall have paid or set aside all
amounts, if any, then or theretofore required to be paid or
set aside for all sinking funds, if any, for the Class A
Preferred Stock of any series; and
(iii) the Corporation shall not be in default on any of
its obligations to redeem any of the Class A Preferred Stock.
(c) So long as any of the Class A Preferred Stock is
outstanding, no shares of any stock junior to the Class A Preferred
Stock shall be purchased, redeemed or otherwise
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<PAGE> 13
acquired by the Corporation or by any subsidiary except (i) in
connection with a reclassification or exchange of any stock junior to
the Class A Preferred Stock through the issuance of other stock junior
to the Class A Preferred Stock at the time outstanding, or (ii) in
connection with the purchase, redemption or other acquisition of any
stock junior to the Class A Preferred Stock with proceeds of a
reasonably contemporaneous sale of other stock junior to the Class A
Preferred Stock at the time outstanding or (iii) payments in cash in
lieu of fractional shares upon the conversion of any convertible stock
junior to the Class A Preferred Stock, nor shall any funds be set
aside or made available for any sinking fund for the purchase or
redemption of any stock junior to the Class A Preferred Stock, unless
(i) there shall be no arrearages in dividends on
Class A Preferred Stock for any past quarterly dividend
period, and dividends in full for the current quarterly
dividend period shall have been paid or declared on all of the
Class A Preferred Stock (cumulative and non-cumulative); and
(ii) the Corporation shall have paid or set aside all
amounts, if any, then or theretofore required to be paid or
set aside for all sinking funds, if any, for the Class A
Preferred Stock of any series; and
(iii) the Corporation shall not be in default on any
of its obligations to redeem any of the Class A Preferred
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<PAGE> 14
Stock.
(d) Subject to the foregoing provisions and not otherwise,
such dividends (payable in cash, property or stock junior to the Class
A Preferred Stock) as may be determined by the Board of Directors of
the Corporation may be declared and paid on the shares of any stock
junior to the Class A Preferred Stock from time to time, and in the
event of the declaration and payment of any such dividends, the
holders of shares of such junior stock shall be entitled, to the
exclusion of holders of shares of Class A Preferred Stock, to share
ratably therein according to their respective interests.
(e) Dividends in full shall not be declared or paid or set
apart for payment on any series of Class A Preferred Stock, unless
there shall be no arrearages in dividends on any Class A Preferred
Stock for any past quarterly dividend period and dividends in full for
the current quarterly dividend period shall have been paid or declared
on all Class A Preferred Stock to the extent that such dividends are
cumulative, and any dividends paid or declared when dividends are not
so paid or declared in full shall be shared ratably by the holders of
all series of Class A Preferred Stock in proportion to such respective
arrearages and unpaid and undeclared current quarterly dividends.
3. Liquidation rights.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or
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<PAGE> 15
involuntary, the holders of shares of Class A Preferred Stock of each
series shall be entitled to receive in full out of the Corporation's
assets the sum of One Hundred Dollars ($100) for each share of Class A
Preferred Stock held by them, plus any arrearages in dividends thereon
to the date fixed for the payment in liquidation, before any
distribution shall be made to the holders of shares of any stock
junior to the Class A Preferred Stock. After such payment in full to
the holders of shares of the Class A Preferred Stock, the remaining
assets of the Corporation shall then be distributable exclusively
among the holders of shares of any stock junior to the Class A
Preferred Stock, according to their respective interests.
(b) If the assets of the Corporation are insufficient to
permit the payment of the full preferential amounts payable to the
holders of shares of Class A Preferred Stock of the respective series
in the event of a liquidation, dissolution or winding up, then the
assets available for distribution to holders of shares of Class A
Preferred Stock shall be distributed ratably to such holders in
proportion to the full preferential amounts payable on the respective
shares.
(c) A consolidation or merger of the Corporation with or into
one or more other corporations or a sale of all or substantially all
of the assets of the Corporation shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of
the Corporation.
4. Redemption.
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<PAGE> 16
(a) The Corporation may, at the option of the Board of
Directors, redeem the whole or any part of the Class A Preferred
Stock, or of any series thereof, at any time or from time to time
within the period during which such stock is, according to these
Articles of Incorporation or any amendment thereto, or the resolutions
of the Board of Directors of the Corporation providing for the issue
thereof, redeemable at the option of the Board of Directors, by paying
such redemption price thereof as shall have been fixed by these
Articles of Incorporation or any amendment thereto or by the
resolutions of the Board of Directors of the Corporation providing for
the issue of the Class A Preferred Stock to be redeemed, including an
amount in the case of each share so to be redeemed equal to any
arrearages in dividends thereon to the date fixed for redemption (the
total amount so to be paid being hereinafter referred to as the
"redemption price"). The Class A $5 cumulative Preferred Stock and the
Class A $5.65 Cumulative Preferred Stock shall be redeemable at any
time at the option of the Board of Directors of the Corporation.
(b) Unless expressly provided otherwise in the resolutions of
the Board of Directors of the Corporation providing for the issue of
the Class A Preferred Stock to be redeemed, (i) notice of each such
redemption shall be mailed not less than thirty days nor more than
ninety days prior to the date fixed for redemption to each holder of
record of shares of the Class A Preferred Stock to be redeemed, at his
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<PAGE> 17
address as the same may appear on the books of the Corporation, and
(ii) in case of a redemption of a part only of any series of the Class
A Preferred Stock, the shares of such series to be redeemed shall be
selected pro rata or by lot or in such other equitable manner as the
Board of Directors of the Corporation may determine. The Board of
Directors of the Corporation shall have full power and authority,
subject to the limitations and provisions contained in these Articles
of Incorporation or any amendment thereto or in the resolutions of the
Board of Directors of the Corporation providing for the issue of the
Class A Preferred Stock to be redeemed, to prescribe the manner in
which and the terms and conditions upon which the Class A Preferred
Stock may be redeemed from time to time.
(c) If any such notice of redemption shall have been duly
given, then on and after the date fixed in such notice of redemption
(unless default shall be made by the Corporation in the payment or
deposit of the redemption price pursuant to such notice) all
arrearages in dividends, if any, on the shares of Class A Preferred
Stock so called for redemption shall cease to accumulate, and on such
date all rights of the holders of shares of Class A Preferred Stock so
called for redemption shall cease and terminate except the right to
receive the redemption price upon surrender of their certificates for
redemption and such rights, if any, of conversion or exchange as may
exist with respect to such
17
<PAGE> 18
Class A Preferred Stock under the provisions of these Articles of
Incorporation or any amendment thereto or in the resolutions of the
Board of Directors of the Corporation providing for the issue of such
Class A Preferred Stock.
(d) If, before the redemption date specified in any notice of
the redemption of any Class A Preferred Stock, the Corporation shall
deposit the redemption price with a bank or trust company in the
continental United States having a capital and surplus of at least
$5,000,000 according to its last published statement of condition, in
trust for payment on the redemption date to the holders of shares of
Class A Preferred Stock to be redeemed, from and after the date of
such deposit all rights of the holders of shares of Class A Preferred
Stock so called for redemption shall cease and terminate except the
right to receive the redemption price upon surrender of their
certificates for redemption and such rights, if any, of conversion or
exchange as may exist with respect to such Class A Preferred Stock
under the provisions of these Articles of Incorporation or any
amendment thereto or in the resolutions of the Board of Directors of
the Corporation providing for the issue of such Class A Preferred
Stock. Any funds so deposited which are not required for such
redemption because of the exercise of any such right of conversion or
exchange subsequent to the date of such deposit shall be returned to
the Corporation forthwith. The Corporation shall be entitled to
receive from the depositary,
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<PAGE> 19
from time to time, the interest, if any, allowed on such funds
deposited with it, and the holders of the shares so redeemed shall
have no claim to any interest. Any funds so deposited and remaining
unclaimed at the end of six years from the redemption date shall, if
thereafter requested by the Board of Directors of the Corporation, be
repaid to the Corporation.
(e) Shares of Class A Preferred Stock of any series may also
be subject to redemption, in the manner hereinabove prescribed under
this paragraph 4 of Subdivision A of Section 4, through operation of
any sinking fund created therefor, at the redemption prices and under
the terms and provisions contained in the resolutions of the Board of
Directors of the Corporation providing for the issue of such series.
(f) The Corporation shall not be required to register a
transfer of any share of Class A Preferred Stock (i) within fifteen
days preceding a selection for redemption of shares of the series of
Class A Preferred Stock of which such share is a part or (ii) which
has been selected for redemption.
(g) During the continuance of any arrearages in dividends for
any past quarterly dividend period or a failure in fulfillment of any
sinking fund or redemption obligation on any series of Class A
Preferred Stock, the Corporation shall not purchase or redeem less
than all of the shares of Class A Preferred Stock or of any other
stock ranking on a parity with the Class A Preferred Stock as to
dividends and upon
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<PAGE> 20
liquidation, nor permit any subsidiary to do so without the consent
given in writing or affirmative vote given in person or by proxy at a
meeting called for the purpose, by the holders of at least fifty per-
cent (50%) of all the shares of Class A Preferred Stock then
outstanding; provided that (i) to meet the requirements of any
purchase, retirement or sinking fund provisions with respect to any
series, the Corporation may use shares of such series acquired by it
prior to such arrearages in dividends or failure of payment and then
held by it as treasury stock, valued at the redemption price, and (ii)
the Corporation may complete the purchase or redemption of shares of
Class A Preferred Stock or of any other stock ranking on a parity with
the Class A Preferred Stock as to dividends and upon liquidation for
which a purchase contract was entered into for any purchase,
retirement or sinking fund purposes, or the notice of redemption of
which was initially mailed, prior to such arrearages in dividends or
failure of payment.
(h) If any obligation to retire shares of Class A Preferred
Stock is not paid in full on all series as to which such obligation
exists, the number of shares of each such series to be retired
pursuant to any such obligation shall be in proportion to the
respective amounts which would be payable if all amounts payable for
the retirement of such series were discharged in full.
5. Restrictions on certain action affecting Class A
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<PAGE> 21
Preferred Stock. The Corporation will not, without the consent given in
writing or affirmative vote given in person or by proxy at a meeting held for
the purpose,
(a) by the holders of at least fifty percent (50%) of the
shares of Class A Preferred Stock then outstanding,
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<PAGE> 22
(i) amend, alter or repeal any of the provisions of
these Articles of Incorporation, or any amendment thereto, or
By-laws of the Corporation, so as to affect adversely the
voting powers, rights or preferences of the holders of shares
of Class A Preferred Stock or to reduce the time for any
notice to which the holders of shares of Class A Preferred
Stock may be entitled; provided, however, that the amendment
of the provisions of these Articles of Incorporation, as
amended, so as to increase the authorized amount of Common
Stock, Class B Preferred Stock, Class A Preferred Stock, any
other class of stock junior to the Class A Preferred Stock or
any stock of any class ranking on a parity with the Class A
Preferred Stock shall not be deemed to affect adversely the
powers, rights or preferences of the holders of shares of
Class A Preferred Stock;
(ii) create any other class or classes of stock or any
security convertible into, or exchangeable for or evidencing
the right to purchase any stock of a class ranking on a parity
with the Class A Preferred Stock, either as to dividends or
upon liquidation;
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<PAGE> 23
(iii) increase the authorized amount of or create any
class or classes of stock ranking prior to the Class A
Preferred Stock; or
(iv) merge or consolidate with or into any other
corporation, unless the corporation resulting from such merger
or consolidation will have after such merger or consolidation
no class of stock either authorized or outstanding ranking
prior to the Class A Preferred Stock, and no securities either
authorized or outstanding which are convertible or
exchangeable into stock ranking prior to the Class A Preferred
Stock except the same number of shares of prior stock and the
same amount of such convertible securities with the same
rights and preferences as the prior stock and such convertible
securities of the Corporation, respectively, authorized and
outstanding immediately preceding such merger or
consolidation, and unless each holder of shares of Class A
Preferred Stock, immediately preceding such a merger or
consolidation shall receive the same number of shares, with
substantially the same rights and preferences, of the
resulting corporation;
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<PAGE> 24
provided, however, that no such consent of the holders of shares of
Class A Preferred Stock then outstanding shall be required if, at or
prior to the taking effect of the event which would otherwise require
such consent, provision shall be made for the redemption of all shares
of Class A Preferred Stock.
(b) by the holders of at least fifty percent (50%) of the
shares of any series of Class A Preferred Stock then outstanding,
amend, alter or repeal any of the provisions of these Articles of
Incorporation or any amendment thereto or of the resolutions of the
Board of Directors of the Corporation providing for the issue of such
series so as to affect adversely the powers, preferences or rights of
the holders of shares of Class A Preferred Stock of such series;
provided, however, that no such consent of the holders of shares of
any series of Class A Preferred Stock shall be required if, at or
prior to the taking effect of the event which would otherwise require
such consent, provision shall have been made for the redemption of all
shares of such series.
6. Status of Class A Preferred Stock purchased, redeemed or converted.
Shares of Class A Preferred Stock purchased, redeemed or converted into or
exchanged for shares of any other class or series shall be deemed to be
authorized but unissued shares of Class A Preferred Stock undesignated as to
series.
7. Voting Rights. On all matters upon which the holders of shares of
Common Stock of the Corporation are entitled to vote,
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<PAGE> 25
unless otherwise provided in these Articles of Incorporation or any amendment
thereto or the resolutions of the Board of Directors of the Corporation
providing for the issuance of shares of one or more series of Class A Preferred
Stock, each holder of shares of Class A Preferred Stock shall have the right to
vote upon a share-for-share basis with the holders of shares of Common Stock.
8. Election of Directors by holders of shares of Class A Preferred
Stock in event of Nondeclaration of Dividends.
(a) The provisions of this paragraph 8 shall apply only to the
Class A $5 Cumulative Preferred Stock, Class A $5.65 Cumulative
Preferred Stock and to those other series of Class A Preferred Stock
to which such provisions are expressly made applicable by these
Articles of Incorporation or any amendment thereto or resolutions of
the Board of Directors of the Corporation providing for the issue of
such series (hereinafter referred to as the applicable Class A
Preferred Stock). (b) If 30 days prior to the date of any annual
meeting of the stockholders declarations of dividends (including
non-cumulative dividends) on the shares of any series of applicable
Class A Preferred Stock shall be omitted (i) in an aggregate amount
equal to 3 (but less than 6) full quarterly dividends, the number of
authorized directorships shall be increased by six if twelve
directorships are authorized immediately prior to such meeting, or by
that number of full directorships which will represent at least
one-third of the total number of directorships giving effect
25
<PAGE> 26
to the increase (but no more) if other than twelve directorships are
authorized immediately prior to such meeting, and the holders of
shares of applicable Class A Preferred Stock shall have the exclusive
and special right, voting separately as a class and without regard to
series, to elect at such annual meeting of stockholders or special
meeting held in place thereof, directors to fill such vacancies so
created, which directors shall not be included in the classes created
by Article Fifth or (ii) in an aggregate amount equal to 6 full
quarterly dividends, the number of authorized directorships shall be
increased by the number of authorized directorships in existence
immediately prior to such meeting plus one additional directorship,
and the holders of shares of applicable Class A Preferred Stock shall
have the exclusive and special right, voting separately as a class and
without regard to series, to elect at such annual meeting of
stockholders or special meeting held in place thereof, directors to
fill such vacancies so created, which directors shall not be included
in the classes created by Article Fifth, in each case until four
consecutive quarterly dividends shall have been paid on or declared
and set apart for payment on the shares of such series, if the shares
of such series are non-cumulative, or until all arrearages in
dividends and dividends in full for the current quarterly period shall
have been paid on or declared and set apart for payment on the shares
of such series, if the shares of such series are cumulative, whereupon
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all voting rights as a class of the holders of shares of applicable
Class A Preferred Stock provided for under this paragraph 8
Subdivision A of Section 4 shall be divested from the holders of
shares of applicable Class A Preferred Stock (subject, however, to
being at any time or from time to time similarly revived if
declarations of dividends for subsequent quarterly periods shall be
omitted).
(c) At any meeting at which the holders of shares of
applicable Class A Preferred Stock shall be entitled to vote as a
class for the election of directors as above provided, the holders of
a majority of the shares of applicable Class A Preferred Stock then
outstanding present in person or by proxy shall constitute a quorum
for the election of such directors and for no other purpose, and the
vote of the holders of a majority of the shares of applicable Class A
Preferred Stock so present at any such meeting at which there shall be
such a quorum shall be sufficient to elect such directors. The persons
so elected as directors by the holders of shares of applicable Class A
Preferred Stock shall hold office until (i) their successors shall
have been elected by such holders or (ii) until the annual meeting
next following the divestiture of the right of the holders of shares
of applicable Class A Preferred Stock to vote as a class in the
election of directors as provided in subparagraph (b) of this
paragraph 8 of Subdivision A of Section 4. If a vacancy occurs in a
directorship elected by the holders of shares of applicable
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Class A Preferred Stock voting as a class, a successor may be
appointed by the remaining director or directors so elected by the
holders of shares of applicable Class A Preferred Stock. Directors
elected pursuant to this paragraph 8 of Subdivision A of Section 4
shall not be removed otherwise than as provided in Article Fifth.
(d) At any such meeting or any adjournment thereof, (i)the
absence of a quorum of the holders of shares of applicable Class A
Preferred Stock shall not prevent the election of the directors other
than those to be elected by holders of shares of applicable Class A
Preferred Stock voting as a class, and the absence of a quorum of
holders of the shares entitled to vote for directors other than those
to be elected by the holders of shares of applicable Class A Preferred
Stock voting as a class shall not prevent the election of the
directors to be elected by the holders of shares of applicable Class A
Preferred Stock voting as a class, and (ii) in the absence of a quorum
of the holders of shares of applicable Class A Preferred Stock, the
holders of a majority of the shares of applicable Class A Preferred
Stock present in person or by proxy shall have power to adjourn from
time to time the meeting for the election of the directors which they
are entitled to elect voting as a class, without notice other than
announcement at the meeting until a quorum shall be present.
9. Class A $5 Cumulative Preferred Stock. The preferences
28
<PAGE> 29
and relative, participating, optional and other special rights, and
qualifications, limitations or restrictions of said shares of the Class A $5
Cumulative Preferred Stock shall be as hereinafter set forth, namely:
(a) The annual dividend rate upon the Class A $5 Cumulative
Preferred Stock shall be $5;
(b) The quarterly dividend payment dates of the Class A $5
Cumulative Preferred Stock shall be the first days of January, April,
July and October in each year;
(c) The Class A $5 Cumulative Preferred Stock may be redeemed at
the price of $l05 per share, plus accrued and unpaid dividends.
B. CLASS B PREFERRED STOCK
1. Authority of the Board of Directors of the Corporation to issue
Class B Preferred Stock in Series. The Class B Preferred Stock may be issued
from time to time in one or more series. Subject to the provisions of these
Articles of Incorporation or any amendment thereto, authority is expressly
granted to the Board of Directors of the Corporation to authorize the issue of
one or more series of Class B Preferred Stock, and to fix by resolutions
providing for the issue of each such series the powers, preferences and rights
thereof, to the full extent now or hereafter permitted by law, including but
not limited to the following:
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<PAGE> 30
(a) The number of shares of such series (which may
subsequently be increased by resolutions of the Board of Directors of
the Corporation) and the distinctive designation thereof.
(b) The dividend rate of such series and any limitations,
restrictions or conditions on the payment of such dividends;
(c) The terms and conditions, if any, on which, and the price
or prices at which, the shares of such series may be redeemed;
(d) The amounts which the holders of the shares of such series
are entitled to receive upon any liquidation, dissolution or winding
up of the Corporation;
(e) The terms of any purchase, retirement or sinking fund to
be provided for the shares of such series;
(f) Restrictions upon the declaration or payment of dividends
or other distributions on, or the acquisition or retirement by the
Corporation of, the Common Stock, to take effect upon the occurrence
of any default in the provisions for a sinking fund, if any, for the
particular series and to remain in effect so long as such default
continues; and provisions extending for the benefit of the particular
series for so long as any shares thereof remain outstanding, similar
restrictions with respect to the stock of the Corporation imposed by
the terms of any of its funded indebtedness then outstanding;
(g) The terms and conditions, if any, upon which the
30
<PAGE> 31
shares of such series shall be convertible into or exchangeable for
shares of any other class or classes, or of any other series of the
same or any other class or classes of stock of the Corporation;
(h) The voting powers, if any, of such series in addition to
the voting powers provided in paragraphs 5 and 8 of this subdivision B
of Section 4; and
(i) Any other variance in the relative powers, preferences and
rights as between different series not inconsistent with these
Articles of Incorporation or any amendments thereto, to the full
extent now or hereafter allowed by law.
The Class B Preferred Stock of each series shall rank on a parity with
the Class B Preferred Stock of every other series in priority of payment of
dividends and in the distribution of assets in the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
to the extent of the preferential amounts to which the Class B Preferred Stock
of the respective series shall be entitled under the provisions of these
Articles of Incorporation or any amendment thereto or the resolutions of the
Board of Directors of the Corporation providing for the issue of such series.
All shares of any one series of Class B Preferred Stock shall be identical
except as to the dates of issue and the dates from which dividends on shares of
the series issued on different dates shall accumulate (if cumulative).
2. Dividend rights.
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(a) The holders of shares of Class B Preferred Stock of each
series shall be entitled to receive, when and as declared by the Board
of Directors of the Corporation, preferential dividends, from the date
fixed by the resolutions of the Board of Directors of the Corporation
authorizing the issuance thereof, in cash payable at such rate, from
such date, and on such quarterly dividend payment dates and, if
cumulative, cumulative from such date or dates, as may be fixed by the
provisions of these Articles of Incorporation or any amendment thereto
or by the resolutions of the Board of Directors of the Corporation
providing for the issue of such series. The holders of shares of Class
B Preferred Stock shall not be entitled to receive any dividends
thereon other than those specifically provided for by these Articles
of Incorporation or any amendment thereto, or such resolutions of the
Board of Directors of the Corporation, nor shall any arrearages in
dividends on the Class B Preferred Stock bear any interest.
(b) So long as any of the Class B Preferred Stock is outstanding,
no dividends (other than dividends payable in stock junior to the
Class B Preferred Stock and cash in lieu of fractional shares in
connection with any such dividend) shall be paid or declared in cash
or otherwise, nor shall any other distribution be made, on any stock
junior to the Class B Preferred Stock, unless
(i) there shall be no arrearages in dividends on the
Class B Preferred Stock for any past quarterly
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dividend period, and dividends in full for the current
quarterly dividend period shall have been paid or declared on
all of the Class B Preferred Stock (cumulative and
non-cumulative) and
(ii) the Corporation shall have paid or set aside all
amounts, if any, then or theretofore required to be paid or
set aside for all sinking funds, if any, for the Class B
Preferred Stock of any series; and
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(iii) the Corporation shall not be in default on any
of its obligations to redeem any of the Class B Preferred
Stock.
(c) So long as any of the Class B Preferred Stock is
outstanding, no shares of any stock junior to the Class B Preferred
Stock shall be purchased, redeemed or otherwise acquired by the
Corporation or by any subsidiary except (i) in connection with a
reclassification or exchange of any stock junior to the Class B
Preferred Stock through the issuance of other stock junior to the
Class B Preferred Stock at the time outstanding, or (ii) in connection
with the purchase, redemption or other acquisition of any stock junior
to the Class B Preferred Stock with proceeds of a reasonably
contemporaneous sale of other stock junior to the Class B Preferred
Stock at the time outstanding, or (iii) payments in cash in lieu of
fractional shares upon the conversions of any convertible stock junior
to the Class A Preferred Stock, nor shall any funds be set aside or
made available for any sinking fund for the purchase or redemption of
any stock junior to the Class B Preferred Stock, unless
(i) there shall be no arrearages in dividends on
Class B Preferred Stock for any past quarterly dividend
period, and dividends in full for the current dividend period
shall have been paid or declared on all of the Class B
Preferred Stock (cumulative and non-cumulative); and
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(ii) the Corporation shall have paid or set aside all
amounts, if any, then or theretofore required to be paid or
set aside for all sinking funds, if any, for the Class B
Preferred Stock of any series; and
(iii) the Corporation shall not be in default on any
of its obligations to redeem any of the Class B Preferred
Stock.
(d) Subject to the foregoing provisions and not otherwise,
such dividends (payable in cash, property or stock junior to the Class
B Preferred Stock) as may be determined by the Board of Directors of
the Corporation may be declared and paid on the shares of any stock
junior to the Class B Preferred Stock from time to time, and in the
event of the declaration and payment of any such dividends, the
holders of shares of such junior stock shall be entitled, to the
exclusion of holders of shares of Class B Preferred Stock, to share
ratably therein according to their respective interests.
(e) Dividends in full shall not be declared or paid or set
apart for payment on any series of Class B Preferred Stock, unless
there shall be no arrearages in dividends on any Class B Preferred
Stock for any past quarterly dividend period and dividends in full for
the current quarterly dividend period shall have been paid or declared
on all Class B Preferred Stock to the extent that such dividends are
cumulative and any dividends paid or declared when dividends
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<PAGE> 36
are not so paid or declared in full shall be shared ratably by the
holders of shares of all series of Class B Preferred Stock in
proportion to such respective arrearages and unpaid and undeclared
current quarterly dividends.
(f) Dividends shall not be declared or paid or set apart for
payment on any series of Class B Preferred Stock, unless there shall
be no arrearages in dividends on any series of Class A Preferred Stock
entitled to cumulative dividends for any past quarterly dividend
period and dividends in full for the current dividend period shall
have been paid or declared or set apart for payment on all Class A
Preferred Stock.
3. Liquidation rights.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of
shares of Class B Preferred Stock of each series shall be entitled to
receive, subject to the prior rights of the holders of shares of Class
A Preferred Stock set forth in paragraph 3 of Subdivision A of Section
4, the full preferential amount fixed by these Articles of
Incorporation or any amendment thereto, or by the resolutions of the
Board of Directors of the Corporation providing for the issue of such
series, including any arrearages in dividends thereon to the date
fixed for the payment in liquidation, before any distribution shall be
made to the holders of shares of any stock junior to the Class B
Preferred Stock. After such payment in full to the holders of shares
of the Class B
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Preferred Stock, the remaining assets of the Corporation shall then be
distributable exclusively among the holders of shares of any stock
junior to the Class B Preferred Stock, according to their respective
interests.
(b) If the assets of the Corporation are insufficient to
permit the payment of the full preferential amounts payable to the
holders of shares of Class B Preferred Stock of the respective series
in the event of a liquidation, dissolution or winding up, then the
assets available for distribution to holders of shares of Class B
Preferred Stock shall be distributed ratably to such holders in
proportion to the full preferential amounts payable on the respective
shares.
(c) A consolidation or merger of the Corporation with or into
one or more other corporations or a sale of all or substantially all
of the assets of the Corporation shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of
the Corporation.
4. Redemption.
(a) The Corporation may, at the option of the Board of
Directors, redeem the whole or any part of the Class B Preferred
Stock, or of any series thereof, at any time or from time to time
within the period during which such stock is, according to the
resolutions of the Board of Directors of the Corporation providing for
the issue thereof, redeemable at the option of the Board of Directors
of the Corporation, by paying such redemption price thereof, as shall
have been fixed
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by these Articles of Incorporation or any amendment thereto or by the
resolutions of the Board of Directors of the Corporation providing for
the issue of the Class B Preferred Stock to be redeemed, including an
amount in the case of each share so to be redeemed equal to any
arrearages in dividends thereon to the date fixed for redemption (the
total amount so to be paid being hereinafter referred to as the
"redemption price").
(b) Unless expressly provided otherwise in the resolutions of
the Board of Directors of the Corporation providing for the issue of
the Class B Preferred Stock to be redeemed, (i) notice of each such
redemption shall be mailed not less than thirty days nor more than
ninety days prior to the date fixed for redemption to each holder of
record of shares of the Class B Preferred Stock to be redeemed, at his
address as the same may appear on the books of the Corporation, and
(ii) in case of a redemption of a part only of any series of the Class
B Preferred Stock, the shares of such series to be redeemed shall be
selected pro rata or by lot or in such other equitable manner as the
Board of Directors of the Corporation may determine. The Board of
Directors of the Corporation shall have full power and authority,
subject to the limitations and provisions contained in these Articles
of Incorporation or any amendment thereto or in the resolutions of the
Board of Directors of the Corporation providing for the issue of the
Class B Preferred Stock to be redeemed, to prescribe the manner in
which and the
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terms and conditions upon which the Class B Preferred Stock may be
redeemed from time to time.
(c) If any such notice of redemption shall have been duly
given, then on and after the date fixed in such notice of redemption
(unless default shall be made by the Corporation in the payment or
deposit of the redemption price pursuant to such notice) all
arrearages in dividends, if any, on the shares of Class B Preferred
Stock so called for redemption shall cease to accumulate, and on such
date all rights of the holders of shares of the Class B Preferred
Stock so called for redemption shall cease and terminate except the
right to receive the redemption price upon surrender of their
certificates for redemption and such rights, if any, of conversion or
exchange as may exist with respect to such Class B Preferred Stock
under the provisions of these Articles of Incorporation or any
amendment thereto or in the resolutions of the Board of Directors of
the Corporation providing for the issue of such Class B Preferred
Stock.
(d) If, before the redemption date specified in any notice of
the redemption of any Class B Preferred Stock, the Corporation shall
deposit the redemption price with a bank or trust company in the
continental United States, having a capital and surplus of at least
$5,000,000 according to its last published statement of condition, in
trust for payment on the redemption date to holders of shares of Class
B Preferred Stock to be redeemed, from and after the date of such
deposit
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all rights of the holders of shares of Class B Preferred Stock so
called for redemption shall cease and terminate except the right to
receive the redemption price upon surrender of their certificates for
redemption and such rights, if any, of conversion or exchange as may
exist with respect to such Class B Preferred Stock under the
provisions of these Articles of Incorporation or any amendment thereto
or in the resolutions of the Board of Directors of the Corporation
providing for the issue of such Class B Preferred Stock. Any funds so
deposited which are not required for such redemption because of the
exercise of any such right of conversion or exchange subsequent to the
date of such deposit shall be returned to the Corporation forthwith.
The Corporation shall be entitled to receive from the depositary, from
time to time, the interest, if any, allowed on such funds deposited
with it, and the holders of the shares so redeemed shall have no claim
to any interest. Any funds so deposited and remain unclaimed at the
end of six years from the redemption date shall, if thereafter
requested by the Board of Directors of the Corporation, be repaid to
the Corporation.
(e) Shares of Class B Preferred Stock of any series may also
be subject to redemption, in the manner hereinabove prescribed under
this paragraph 4 of Subdivision B of Section 4, through operation of
any sinking fund created therefor, at the redemption prices and under
the terms and provisions contained in the resolutions of the Board of
Directors of the
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Corporation providing for the issue of such series.
(f) The Corporation shall not be required to register a
transfer of any share of Class B Preferred Stock (i) within fifteen
days preceding a selection for redemption of shares of the series of
Class B Preferred Stock of which such share is a part or (ii) which
has been selected for redemption.
(g) During the continuance of any arrearages in dividends for
any past quarterly dividend period or a failure in fulfillment of any
sinking fund or redemption obligation on any series of Class B
Preferred Stock, the Corporation shall not purchase or redeem less
than all of the shares of Class B Preferred Stock or of any other
stock ranking on a parity with the Class B Preferred Stock as to
dividends and upon liquidation, nor permit any subsidiary to do so
without the consent given in writing or affirmative vote given in
person or by proxy at a meeting called for the purpose, by the holders
of at least fifty per cent (50%) of all the shares of Class B
Preferred Stock then outstanding; provided that (i) to meet the
requirements of any purchase, retirement or sinking fund provisions
with respect to any series, the Corporation may use shares of such
series acquired by it prior to such arrearages in dividends or failure
of payment and then held by it as treasury stock, valued at the
redemption price, and (ii) the Corporation may complete the purchase
or redemption of shares of Class B Preferred Stock or any other stock
ranking on a parity with the Class B Preferred Stock as to dividends
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and upon liquidation for which a purchase contract was entered into
for any purchase, retirement or sinking fund purposes, or the notice
of redemption of which was initially mailed, prior to such arrearages
in dividends or failure of payment.
(h) If any obligation to retire shares of Class B Preferred
Stock is not paid in full on all series as to which such obligation
exists, the number of shares of each such series to be retired
pursuant to any such obligation shall be in proportion to the
respective amounts which would be payable
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if all amounts payable for the retirement of such series were
discharged in full.
5. Restrictions on certain actions affecting Class B Preferred Stock.
The Corporation will not, without the consent given in writing or affirmative
vote given in person or by proxy at a meeting held for the purpose,
(a) by the holders of at least fifty per cent (50%) of the
shares of Class B Preferred Stock then outstanding,
(i) amend, alter or repeal any of the provisions of
these Articles of Incorporation, or any amendment thereto, or
By-laws of the Corporation, so as to affect adversely the
voting powers, rights or preferences of the holders of shares
of Class B Preferred Stock or reduce the time for any notice
to which the holders of shares of Class B Preferred Stock may
be entitled; provided, however, that the amendment of the
provisions of these Articles of Incorporation, as amended, so
as to increase the authorized amount of Common Stock, Class B
Preferred Stock, any other class of stock junior to the Class
B Preferred Stock, any stock of any class ranking on a parity
with the Class B Preferred Stock or the Class A Preferred
Stock shall not be deemed to affect adversely the powers,
rights or preferences of the holder of shares of Class B
Preferred Stock;
(ii) create any other class or classes of stock
or any security convertible into, or exchangeable for or
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evidencing the right to purchase any stock of a class ranking
on a parity with the Class B Preferred Stock, either as to
dividends or upon liquidation;
(iii) create any class or classes of stock ranking
prior to the Class B Preferred Stock; or (iv) merge or
consolidate with or into any other corporation, unless the
corporation resulting from such merger or consolidation will
have after such merger or consolidation no class of stock
either authorized or outstanding ranking prior to the Class B
Preferred Stock, and no securities either authorized or
outstanding which are convertible into or exchangeable for
stock ranking prior to the Class B Preferred Stock except the
same number of shares of prior stock and the same amount of
such convertible securities with the same rights and
preferences as the prior stock and such convertible securities
of the Corporation, respectively, authorized and outstanding
immediately preceding such merger or consolidation, and unless
each holder of shares of Class B Preferred Stock immediately
preceding such a merger or consolidation shall receive the
same number of shares, with substantially the same rights and
preferences, of the resulting corporation;
provided, however, that no such consent of the holders of shares of
Class B Preferred Stock then outstanding shall be required if, at or
prior to the taking effect of the event
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<PAGE> 45
which would otherwise require such consent, provision shall be made
for the redemption of all shares of Class B Preferred Stock.
(b) by the holders of at least fifty per cent (50%) of the
shares of any series of Class B Preferred Stock then outstanding,
amend, alter or repeal any of the provisions of these Articles of
Incorporation or any amendment thereto or of the resolutions of the
Board of Directors of the Corporation providing for the issue of such
series so as to affect adversely the powers, preferences or rights of
the holders of shares of Class B Preferred Stock of such series;
provided, however, that no such consent of the holders of shares of
any series of Class B Preferred Stock shall be required if, at or
prior to the taking effect of the event which would otherwise require
such consent, provision shall have been made for the redemption of all
shares of such series.
6. Status of Class B Preferred Stock purchased, redeemed or converted.
Shares of Class B Preferred Stock purchased, redeemed or converted into or
exchanged for shares of any other class or series shall be deemed to be
authorized but unissued shares of Class B Preferred Stock undesignated as to
series.
7. Voting Rights. On all matters upon which the holders of shares of
Common Stock of the Corporation are entitled to vote, unless otherwise provided
in these Articles of Incorporation or any amendment thereto or the resolutions
of the Board of Directors providing for the issuance of shares of one or more
series of Class
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B Preferred Stock, each holder of shares of Class B Preferred Stock shall have
the right to vote upon a share-for-share basis with the holders of shares of
Common Stock.
8. Election of Directors by holders of shares of Class B Preferred
Stock in event of Nondeclaration of Dividends.
(a) The provisions of this paragraph 8 of Subdivision B of
Section 4 shall apply only to those series of Class B Preferred Stock
to which such provisions are expressly made applicable by these
Articles of Incorporation or any amendment thereto or resolutions of
the Board of Directors of the Corporation providing for the issue of
such series (hereinafter referred to as the applicable Class B
Preferred Stock), subject to the rights of the holders of Class A
Preferred Stock.
(b) If 30 days prior to the date of any annual meeting of the
stockholders, holders of shares of Class A Preferred Stock are not
entitled to exclusive and special voting rights in the election of
directors pursuant to paragraph 8 of Subdivision A of Section 4 and
declarations of dividends (including non-cumulative dividends) on the
shares of any series of applicable Class B Preferred Stock shall be
omitted (i) in an aggregate amount equal to 3 (but less than 6) full
quarterly dividends, the number of authorized directorships shall be
increased by six, if twelve directorships are authorized immediately
prior to such meeting, or by the number of full directorships which
will represent at least one-third
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of the total number of directorships giving effect to the increase
(but no more) if other than twelve directorships are authorized
immediately prior to such meeting, and the holders of shares of
applicable Class B Preferred Stock shall have the exclusive and
special right, voting separately as a class and without regard to
series, to elect at such annual meeting of stockholders or special
meeting held in place thereof, directors to fill such vacancies so
created, which directors shall not be included in the classes created
by Article Fifth or (ii) in an aggregate amount equal to 6 full
quarterly dividends, the number of authorized directorships shall be
increased by the number of authorized directorships in existence
immediately prior to such meeting plus one additional directorship,
and the holders of shares of applicable Class B Preferred Stock shall
have the exclusive and special right, voting separately as a class and
without regard to series, to elect at such annual meeting of
stockholders or special meeting held in place thereof, directors to
fill such vacancies so created, which directors shall not be included
in the classes created by Article Fifth, in each case until four
consecutive quarterly dividends shall have been paid on or declared
and set apart for payment on the shares of such series, if the shares
of such series are non-cumulative, or until all arrearages in
dividends and dividends in full for the current quarterly period shall
have been paid on or declared and set apart for payment on the shares
of such
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series, if the shares of such series are cumulative whereupon all
voting rights as a class of the holders of shares of applicable Class
B Preferred Stock provided for under this paragraph 8 Subdivision B of
Section 4 shall be divested from the holders of shares of applicable
Class B Preferred Stock (subject, however, to being at any time or
from time to time similarly revived if declarations of dividends for
subsequent quarterly periods shall be omitted).
(c) At any meeting at which the holders of shares of
applicable Class B Preferred Stock shall be entitled to vote as a
class for the election of such directors as above provided, the
holders of a majority of the shares of applicable Class B Preferred
Stock then outstanding present in person or by proxy shall constitute
a quorum for the election of such directors and for no other purpose,
and the vote of the holders of a majority of the shares of applicable
Class B Preferred Stock so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect such directors.
The persons so elected as directors by the holders of shares of
applicable Class B Preferred Stock shall hold office until (i) their
successors shall have been elected by such holders or (ii) until the
annual meeting next following the divestiture of the right of the
holders of shares of applicable Class B Preferred Stock to vote as a
class in the election of directors as provided in subparagraph (b) of
this paragraph 8 of Subdivision B of Section 4. If a vacancy
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occurs in a directorship elected by the holders of shares of
applicable Class B Preferred Stock voting as a class, a successor may
be appointed by the remaining director or directors so elected by the
holders of shares of applicable Class B Preferred Stock. Directors
elected pursuant to this paragraph 8 of Subdivision B of Section 4
shall not be removed otherwise than as provided in Article Fifth.
(d) At any such meeting or any adjournment thereof, (i) the
absence of a quorum of the holders of shares of applicable Class B
Preferred Stock shall not prevent the election of the directors other
than those to be elected by holders of shares of applicable Class B
Preferred Stock voting as a class, and the absence of a quorum of
holders of the shares entitled to vote for directors other than those
to be elected by the holders of shares of applicable Class B Preferred
Stock voting as a class shall not prevent the election of the
directors to be elected by the holders of shares of applicable Class B
Preferred Stock voting as a class, and (ii) in the absence of a quorum
of the holders of shares of applicable Class B Preferred Stock, the
holders of a majority of the shares of applicable Class B Preferred
Stock present in person or by proxy shall have power to adjourn from
time to time the meeting for the election of the directors which they
are entitled to elect voting as a class, without notice other than
announcement at the meeting until a quorum shall be present.
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C. COMMON STOCK
1. Dividends rights. Subject to provisions of law and the preferences
of the Class A Preferred Stock and the Class B Preferred Stock, the holders of
shares of the Common Stock of the Corporation shall be entitled to receive
dividends at such time and in such amounts as may be determined by the Board of
Directors of the Corporation.
2. Voting rights. The holders of shares of the Common Stock of the
Corporation shall have one vote for each share on each matter submitted to a
vote of the stockholders of the Corporation.
3. Liquidation rights. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, after payment
or provision for payment of the debts and other liabilities of the Corporation
and the preferential amounts to which the holders of shares of Class A
Preferred Stock and Class B Preferred Stock shall be entitled, the holders of
shares of the Common Stock shall be entitled to share ratably in the remaining
assets of the Corporation.
D. GENERAL PROVISIONS
1. Authority to authorize additional shares. The authorized number of
shares of the Common Stock, Class A Preferred Stock and Class B Preferred Stock
of the Corporation may be increased at any time and from time to time upon
affirmative vote of the holders of a majority of all the shares of stock of the
Corporation at the time outstanding.
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2. Authority for issuance of shares. The Board of Directors of the
Corporation shall have authority to authorize the issuance, from time to time
without any vote or other action by the holders of shares of stock of the
Corporation, of shares of Common Stock, Class A Preferred Stock and Class B
Preferred Stock and any authorized shares of Common Stock into which such
shares of stock are convertible to such persons and for such consideration and
on such terms as the Board of Directors of the Corporation from time to time in
its discretion lawfully may determine. Shares of Common Stock, Class A
Preferred Stock and Class B Preferred Stock so issued, for which the
consideration has been paid to the Corporation, shall be full paid stock, and
the holders of shares of such stock shall not be liable to any further call or
assessments thereon. Authorized shares of Common Stock issued upon the
conversion of any other stock of the Corporation shall be full paid stock, and
the holders of such stock shall not be liable to any further call or
assessments thereon.
3. Abandonment of dividends and distributions. Anything herein
contained to the contrary notwithstanding any and all right, title, interest,
and claim in or to any dividends declared, or other distributions made, by the
Corporation, whether in cash, stock or otherwise, on the Stock of the
Corporation which are unclaimed by the stockholder entitled thereto for a
period of six years after the close of business on the payment date, shall be
and be deemed to be extinguished and abandoned; and such unclaimed dividends or
other distributions in the possession of the
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Corporation, its transfer agents or other agents or depositaries, shall at such
time become the absolute property of the Corporation free and clear of any and
all claims of any persons whatsoever.
4. No stockholder of this Corporation and no holder of any other
security issued by this Corporation shall, by reason of his holding any of its
shares of stock or other securities have any preemptive or preferential right
to purchase or subscribe for any shares of stock of this Corporation, now or
hereafter to be authorized, or any notes, debentures, bonds or other securities
convertible into or carrying options or warrants to purchase any of its shares
of stock now or hereafter to be authorized, whether or not the issuance of any
such shares, or such notes, debentures, bonds or other securities would
adversely affect the dividend, voting or other rights of such stockholder or
other security holders, other than such rights, if any, as the Board of
Directors, in its discretion from time to time may grant, and at such price as
the Board of Directors in its discretion may fix and the Board of Directors may
issue shares of stock of this Corporation, or any notes, debentures, bonds, or
other securities convertible into or carrying options or warrants to purchase
any of its shares of stock without offering any such shares, either in whole or
in part, to existing stockholders of the Corporation.
SEVENTH
SECTION 1
For the purposes of this Article Seventh: (i) the term "Person" shall
include any individual, corporation, partnership,
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trust, unincorporated organization or other entity, any syndicate or group or
any two or more of the foregoing that have any agreement or understanding (or,
with or without an agreement or understanding, act in concert) with respect to
acquiring, holding, voting or disposing of securities of the Corporation, and
shall include also any "affiliate" or "associate" (as those terms are defined
in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934 as in effect on January 1, 1975) of any Person: (ii) any
Person shall be deemed to be the beneficial owner of any securities of the
Corporation which such Person has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options, or
otherwise; (iii) the term "Substantial Part" shall mean any assets having a
then fair market value, in the aggregate, of more than $5,000,000; (iv) the
term "Subsidiary" shall mean any corporation in which the Corporation owns,
directly or indirectly, more than 50% of the voting securities; (v) the term
"Substantial Amount" shall mean any securities of the Corporation having a then
fair market value of more than $5,000,000; (vi) the outstanding securities of
any class of the Corporation shall include securities deemed owned through
application of the preceding clauses of this Section 2 of this Article Seventh,
but shall not include any other securities which may be issuable pursuant to
any agreement or upon exercise of conversion rights, warrants or options, or
otherwise; and (vii) a "Required Vote" shall mean the affirmative vote of at
least the holders of two-thirds (2/3) of all of the securities of the
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Corporation then entitled to vote at a meeting of stockholders, considered for
the purposes of this Article Seventh as one class.
SECTION 2
Except as set forth in Section 4 of this Article Seventh, a Required
Vote shall be necessary (i) for the adoption of any agreement for the merger or
consolidation of the Corporation with or into any other Person, or (ii) to
authorize any sale, lease, exchange, mortgage, pledge or other disposition of
all, or substantially all, or any Substantial Part of the assets of the
Corporation or any Subsidiary to any other Person, or (iii) to authorize the
issuance or transfer by the Corporation of any Substantial Amount of securities
of the Corporation in exchange for the securities or assets of any other
Person, if, in any such case, as of the record date for the determination of
security holders entitled to notice thereof and to vote thereon, such other
Person is the beneficial owner, directly or indirectly, of more than 5% of the
outstanding securities of the Corporation then entitled to vote at a meeting of
stockholders, considered for the purposes of this Article Seventh as one class.
The Required Vote shall be in lieu of any lesser vote of the holders of the
voting securities of the Corporation voting as one class otherwise required by
law or by agreement, but shall be in addition to any class vote or other vote
otherwise required by law, these Articles of Incorporation or by any agreement
or contract to which the Corporation is a party.
SECTION 3
The Board of Directors of the Corporation shall have the power
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and duty to determine for the purposes of this Article Seventh, on the basis of
information known to the Corporation, whether this Article Seventh applies to
any transaction, including but not limited to whether (i) such transaction
involves a Substantial Part of the assets of the Corporation and its
subsidiaries, (ii) one or more Persons are to be deemed to be a single Person,
(iii) a Person is an "affiliate" or "associate" (as defined above) of another,
(iv) any Person beneficially owns more than 5% of the outstanding securities of
the Corporation then entitled to vote at a meeting of stockholders, (v) a Person
has an agreement or understanding, or is acting in concert, with respect to
acquiring, holding, voting or disposing of securities of the Corporation, and
(vi) the memorandum of understanding referred to in Section 4 of this Article
Seventh is substantially consistent with the transaction covered thereby.
Determinations of the Board of Directors of the Corporation shall be conclusive
and binding for all purposes of this Article Seventh.
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SECTION 4
The provisions of this Article Seventh shall not be applicable to (i)
any agreement or transaction referred to in Section 2 of this Article Seventh,
if the Board of Directors of the Corporation shall by resolution have approved
a memorandum of understanding with the other Person who is a party to such
agreement or transaction with respect to, and substantially consistent with,
such transaction and such resolution shall have been approved either (A) prior
to the time that such Person shall have become a holder of more than 5% of the
outstanding securities of the Corporation then entitled to vote at a meeting of
stockholders, or (B) by sufficient members of the Board of Directors who were
directors prior to the time that such Person shall have become a holder of more
than 5% of the outstanding securities of the Corporation then entitled to vote
at a meeting of stockholders, to constitute a majority of the total number of
directorships (including vacant directorships), or (ii) any merger or
consolidation of the Corporation with or into any Person, or any sale, lease or
exchange of any of the assets of any Person to the Corporation or any
subsidiary thereof if a majority of the outstanding shares of all classes of
stock then entitled to vote at
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a meeting of stockholders of such Person is owned by the Corporation and its
Subsidiaries.
EIGHTH
The power to make, alter or repeal the By-laws of the Corporation
shall be vested exclusively in the Board of Directors of the Corporation.
NINTH
SECTION 1
The Corporation shall indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of the Corporation, by
reason of the fact that he is or was a director or officer of the Corporation,
or, while a director or officer of the Corporation, is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding,
including attorneys' fees, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo
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contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe, that his conduct was unlawful.
SECTION 2
The Corporation shall indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director or officer of the
Corporation, or, while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit including attorneys' fees if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
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entitled to indemnity for such expenses which the court shall deem proper.
SECTION 3
The Board of Directors of the Corporation shall have the power, in its
discretion, to cause the Corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding referred to in Sections 1 or 2 of this
Article Ninth by reason of the fact that (although not a director or officer of
the Corporation) he is or was an employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust, or other
enterprise to the extent that any such person would have been entitled to be
indemnified under Sections 1 and 2 had he at all times been a director or
officer of the Corporation.
SECTION 4
To the extent that a person who is or was a director or officer of the
Corporation, or, while a director or officer of the Corporation, of any other
corporation, partnership, joint venture, trust or other enterprise with which
he is or was serving in such capacity at the request of the Corporation, has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by
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him in connection therewith, including attorneys' fees.
SECTION 5
Any indemnification under Sections 1, 2 or 3 of this Article Ninth,
unless ordered by a court, shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in Sections 1 or 2. Such
determination shall be made (i) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or even if obtainable,
a quorum of disinterested directors so directs, by independent legal counsel in
a written opinion, or (iii) by the stockholders.
SECTION 6
Expenses incurred by a director or officer in defending a civil,
criminal, administrative or investigative action, suit or proceeding, or threat
thereof, may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of the director or officer to repay such amount if it shall ultimately be
determined that he shall not be entitled to be indemnified by the Corporation
as authorized by this Article Ninth. Such expenses incurred by other employees
and agents may be so paid upon such term and condition, if any, as the Board of
Directors deems appropriate.
SECTION 7
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The indemnification and advancement of expenses provided by, or
granted pursuant to, the other sections of this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-law, agreement, vote of
stockholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue unless otherwise provided when authorized or
ratified, as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
SECTION 8
For purposes of this Article, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under this Article with respect to the resulting or
surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
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SECTION 9
For purposes of this Article, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
SECTION 10
The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article Ninth.
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TENTH
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them, secured or unsecured, or
between this Corporation and its stockholders, or any class of them, any court,
state or federal, of competent jurisdiction with the state of Kansas may on the
application in a summary way of this Corporation, or of any creditor, secured
or unsecured, or stockholders thereof, or on the application of trustees in
dissolution, or on the application of any receiver or receivers appointed for
this Corporation by any Court, state or federal, of competent jurisdiction,
order a meeting of the creditors or class of creditors, secured or unsecured,
or of the stockholders or class of stockholders of this Corporation, as the
case may be, to be summoned in such manner as said court directs. If a majority
in number representing three-fourths in value of the creditors or class of
creditors, or of the stockholders or class of stockholders of this Corporation,
as the case may be, agree to any compromise or arrangement and to any
reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
ELEVENTH
The Corporation may voluntarily liquidate and dissolve only if
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the proposed liquidation and dissolution is approved by the affirmative vote of
at least the holders of two-thirds (2/3) of all of the securities of the
Corporation then entitled to vote at a meeting of stockholders, considered for
the purposes of this Article Eleventh as one class.
TWELFTH
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in any manner now
or hereafter prescribed by statute; provided that no amendment to these
Articles of Incorporation shall amend, alter, change or repeal any of the
provisions of Article Fifth, Article Seventh, Article Eighth, Article Eleventh
or this Article Twelfth; unless the amendment effectuating such amendment,
alteration, change or repeal shall have received the affirmative vote of the
holders of at least two-thirds (2/3) of all the securities of the Corporation
then entitled to vote on such amendment, alteration, change or repeal,
considered as one class. Such two-thirds (2/3) affirmative vote shall be in
addition to any vote of the holders of securities of the Corporation otherwise
required by law, these Articles of Incorporation, or any agreement or contract
to which the Corporation is a party.
THIRTEENTH
SECTION 1
For the purpose of this Article Thirteenth: (i) the term "Person"
shall include any individual, corporation, partnership, trust, unincorporated
organization or other entity, any syndicate
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or group of any two or more of the foregoing that have any agreement or
understanding (or, with or without an agreement or understanding, act in
concert) with respect to acquiring, holding, voting or disposing of voting
securities of the Corporation, and shall include also any affiliate or
associate of any Person; (ii) any Person shall be deemed to be the beneficial
owner of any voting securities of the Corporation (a) which such Person
beneficially owns, as determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Securities Exchange Act of l934 as in effect on
January 1, l985, and (b) which such Person has the right to acquire pursuant to
any agreement or upon exercise of conversion rights, warrants or options, or
otherwise; (iii) the term "Substantial Part" shall mean any assets having a
then fair market value, in the aggregate, of more than $5,000,000; (iv) the
term "Subsidiary" shall mean any corporation in which the Corporation owns,
directly or indirectly, more than 50% of the voting securities; (v) the term
"Substantial Amount" shall mean any voting securities of the Corporation having
a then fair market value of more than $5,000,000; (vi) the outstanding voting
securities of any class of the Corporation shall include voting securities
deemed owned through application of the preceding clauses of this Section 1 of
this Article Thirteenth, but shall not include any other voting securities
which may be issuable pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise; (vii) the term "Related Person"
shall mean and include any Person which is the beneficial owner, directly or
indirectly,
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of 10% or more of the outstanding voting securities of the Corporation
(considered for the purposes of this Article Thirteenth as one class); (viii)
the term "Related Person Director" shall mean and include each director of the
Corporation who is himself or herself a Related Person or an affiliate or
associate of a Related Person or an officer, director, employee or agent of a
Related Person or of an affiliate or associate of a Related Person; (ix) the
term "Interested Related Person" shall mean and include a Related Person that
is a party to, or is an affiliate or associate of a party to, or will
experience an increase in its proportionate interest in the outstanding voting
securities of any class of the Corporation as a result of, an agreement,
authorization or transaction referred to in Section 2 of this Article
Thirteenth; (x) the term "Required Vote" shall mean the affirmative vote or
consent of the holders of 80% of the outstanding voting securities of all
classes of the Corporation entitled to vote in elections of directors
(considered for the purposes of this Article Thirteenth as one class); (xi) the
terms "affiliate" and "associate" shall have the meanings ascribed to them in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934 as in effect on January 1, 1985; and (xii) the term "Fair Market
Price" of any voting security of any class shall mean the highest sale price
reported during the 30-day period immediately preceding the date in question of
such security (a) on the Composite Tape of the New York Stock Exchange-Listed
Stocks, or (b) if such voting security is not quoted on such Composite Tape, on
the New York
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Stock Exchange, or (c) if such voting security is not listed on such Exchange,
on the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such voting security is listed, or (d)
if such voting security is not listed on any such exchange, the highest asked
quotation for such voting security reported during the 30-day period preceding
the date in question on the National Association of Securities Dealers, Inc.
Automated Quotations Systems or any system then in use. If no such quotations
are available, the "Fair Market Price" of any voting security of any class
shall mean the fair value on the date in question of such voting security as
determined by a majority of the directors who are not Related Person Directors.
SECTION 2
Except as set forth in Section 4 of this Article Thirteenth, a
Required Vote shall be necessary (i) for the adoption of any agreement for the
merger or consolidation of the Corporation or any of its subsidiaries with or
into any Related Person; or (ii) to authorize any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of all, or substantially all,
or any Substantial Part of the assets of the Corporation or of any Subsidiary
to any Related Person; or (iii) to authorize the issuance or transfer by the
Corporation and its subsidiaries of any Substantial Amount of voting securities
of the Corporation in exchange for the securities or assets of any Related
Person; or (iv) to authorize any recapitalization of the Corporation or any
Subsidiary, or merger or consolidation of the Corporation with any Subsidiary,
which has the
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effect, directly or indirectly, of increasing the proportionate interest of any
Related Person in the outstanding voting securities of any class of the
Corporation or any Subsidiary. The Required Vote shall be in lieu of any lesser
vote of the holders of the voting securities of the Corporation voting as one
class otherwise required by law or by agreement, but shall be in addition to
any class vote or other vote otherwise required by law, these Articles of
Incorporation or by any agreement or contract to which the Corporation is a
party.
SECTION 3
The Board of Directors of the Corporation, acting by resolution
adopted by a majority of those members of the Board of Directors who are not
themselves Related Person Directors, shall have the power and duty to determine
for the purposes of this Article Thirteenth on the basis of information known
to the Corporation, whether this Article Thirteenth applies to any transaction,
including but not limited to whether (i) such transaction involves a
Substantial Part of the assets of the Corporation or any Subsidiary, (ii) such
transaction involves a Substantial Amount of the voting securities of the
Corporation, (iii) one or more Persons are to be deemed to be a single Person,
(iv) a Person is an affiliate or associate of another, (v) any Person
beneficially owns more than 10% of the outstanding voting securities of the
Corporation, (vi) any Person has the right to acquire voting securities of the
Corporation, (vii) any Person has any agreement or understanding with respect
to acquiring,
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holding, voting or disposing of voting securities of the Corporation, (viii)
any Person is acting in concert with any Person, (ix) an amount equals or
exceeds the highest per share price paid or payable by an Interested Related
Person for voting securities of the Corporation or (x) an amount equals or
exceeds the Fair Market Price of the voting securities of the Corporation, (xi)
a form of consideration other than cash is the same form as that used by an
Interested Related Person to acquire the largest number of voting securities of
the Corporation previously acquired by an Interested Related Person, (xii) an
investment banking firm is a major investment banking firm of national
reputation, (xiii) a fee to be paid by investment banking firm is reasonable,
or (xiv) an investment banking firm has been previously associated with an
Interested Related Person within the three years immediately preceding its
selection. Determinations of the Board of Directors
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of the Corporation shall be conclusive and binding for all purposes of this
Article Thirteenth.
SECTION 4
The provisions of this Article Thirteenth shall not be applicable to
any agreement or transaction referred to in Section 2 of this Article
Thirteenth if either:
(i) such agreement or transaction shall have been
approved by a resolution adopted by three-fourths of those
members of the Board of Directors of the Corporation holding
office at the time such resolution is adopted who are not
themselves Related Person Directors; or
(ii) all of the following conditions have been met:
(a) the aggregate amount of the cash and the fair market value
(as determined by the investment banking firm referred to in
clause (d) below) of consideration other than cash to be
received per voting security in the transaction by holders of
voting securities of the Corporation is not less than the
higher of (1) the highest price per voting security (including
any brokerage commissions, transfer taxes, soliciting dealer's
fees, dealer-management compensation and similar expenses)
paid or payable by any Interested Related Person in connection
with the acquisition of beneficial ownership of any voting
securities within the three-year period immediately prior to
the record date for the
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determination of stockholders of the Corporation entitled to
vote on or consent to the transaction, and (2) the Fair Market
Price per voting security on such record date; (b) the
consideration to be received by holders of voting securities
of the Corporation other than any Interested Related Person
shall be either in cash or in the form used by any Interested
Related Person in connection with the acquisition of the
largest number of voting securities of the Corporation
previously acquired by any interested Related Person; (c) at
the record date for the determination of stockholders of the
Corporation entitled to vote on the proposed transaction,
there shall be one or more directors of the Corporation who
are not Related Person Directors; and (d) a proxy or
information statement describing the proposed transaction and
complying with the requirements of the Securities Exchange Act
of l934 and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to the holders of outstanding
voting securities of the Corporation entitled to vote in
elections of directors as of the record date for the
determination of stockholders of the Corporation entitled to
vote on such proposed transaction, at least 30 days prior to
the consummation of such transaction (whether or not such
proxy or information statement is required to be mailed
pursuant
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to such Act or subsequent provisions), and such proxy or
information statement shall contain in a prominent place (1)
any recommendations as to the advisability (or inadvisability)
of the proposed transaction that those members of the Board of
Directors who are not Related Person Directors of the
Corporation may choose to state, and (2) if deemed advisable
by a majority of the directors of the Corporation who are not
Related Person Directors, the opinion of an investment banking
firm as to both (A) the fair market value of any consideration
other than cash to be received in the proposed transaction by
holders of voting securities of the Corporation (as required
by clause (a) above), and (B) the fairness (or not) of the
terms of the proposed transaction from the point of view of
the financial interests of the holders of voting securities of
the Corporation other than Interested Related Persons. Such
investment banking firm shall be engaged solely on behalf of
the holders of voting securities of the Corporation other than
Interested Related Person Directors, shall be paid a
reasonable fee for its services by the Corporation upon
receipt of such opinion and shall be a major investment
banking firm of national reputation that has not been
associated with any Interested Related Person during the three
year period immediately preceding its selection for this
purpose.
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For purposes of clause (a) above, the term "consideration
other than cash to be received" shall include voting
securities of the Corporation retained by its stockholders in
the event of a transaction in which the Corporation is the
surviving corporation.
SECTION 5
In addition to any other requirements for amendments to these Articles
of Incorporation, no amendment to these Articles of Incorporation shall amend,
alter, change or repeal any of the provisions of this Article Thirteenth unless
the amendment effectuating such amendment, alteration, change or repeal shall
have received the affirmative vote of the holders of 80% of the outstanding
voting securities of all classes of the Corporation entitled to vote in
elections of directors (considered for the purposes of this Article Thirteenth
as one class), provided that this Section 5 of Article Thirteenth shall not
apply to any amendment to these Articles of Incorporation approved by a
resolution adopted by three-fourths (3/4) of those members of the Board of
Directors of the Corporation holding office at the time such resolution is
adopted who are not themselves Related Person Directors.
FOURTEENTH
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or
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its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under the
provisions of K.S.A. 17-6424 and amendments thereto, or (iv) for any
transaction from which the director derived any improper personal benefit. If
the Kansas General Corporation Code is amended, after approval by the
stockholders of this article, to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Kansas General Corporation Code, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
FIFTEENTH
In the election of directors of the Corporation, the principle of
cumulative voting shall not apply. Every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected
and for whose election he has a right to vote.
K N ENERGY, INC.
BY: /s/ Larry D. Hall
Larry D. Hall, President
BY: /s/ William S. Garner, Jr.
William S. Garner, Jr., Secretary
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EXHIBIT 4(a)
================================================================================
K N ENERGY, INC.
TO
CONTINENTAL ILLINOIS NATIONAL BANK
AND TRUST COMPANY OF CHICAGO,
TRUSTEE
-------------
INDENTURE
DATED AS OF SEPTEMBER 1, 1988
-------------
================================================================================
<PAGE> 2
K N ENERGY, INC.
CROSS-REFERENCE TABLE
(This Cross Reference Sheet shows the location in the
Indenture of the provisions inserted pursuant
to the Trust Indenture Act of 1939)
<TABLE>
<CAPTION>
TIA Indenture
Section Section
--------- ---------
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08, 7.10, 10.02
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 10.01, 10.02
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 10.03
(d) 7.06
314(a) 4.08, 10.04
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 14.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05, 10.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1) (A) 6.05
(a)(1) (B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 4.03
318(a) 14.01
</TABLE>
- ------------
N.A. means Not Applicable.
This cross-reference table shall not, for any purpose, be deemed a part of this
Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE ONE. DEFINITIONS AND INCORPORATION BY REFERENCE...........................................................1
Section 1.01. Definitions...................................................................1
Section 1.02. Rules of Construction........................................................10
ARTICLE TWO. THE SECURITIES......................................................................................11
Section 2.01. Amount Unlimited; Issuable in Series.........................................11
Section 2.02. Execution, Authentication, Delivery and Dating...............................13
Section 2.03. Denominations................................................................15
Section 2.04. Registration, Registration of Transfer and Exchange..........................16
Section 2.05. Mutilated, Destroyed, Lost and Stolen Securities.............................17
Section 2.06. Payment of Interest; Interest Rights Preserved...............................18
Section 2.07. Persons Deemed Owners........................................................20
Section 2.08. Cancellation.................................................................20
Section 2.09. Computation of Interest......................................................21
Section 2.10. Temporary Securities.........................................................21
Section 2.11. Payment to be in Proper Currency.............................................21
ARTICLE THREE. REDEMPTION........................................................................................22
Section 3.01. Applicability of Article.....................................................22
Section 3.02. Election to Redeem; Notices to Trustee.......................................22
Section 3.03. Selection of Securities to be Redeemed.......................................23
Section 3.04. Notice of Redemption.........................................................23
Section 3.05. Effect of Notice of Redemption...............................................24
Section 3.06. Deposit of Redemption Price..................................................25
Section 3.07. Securities Redeemed in Part..................................................25
ARTICLE FOUR. COVENANTS..........................................................................................25
Section 4.01. Payment of Securities........................................................25
Section 4.02. Maintenance of Office or Agency..............................................25
Section 4.03. Money for Securities Payments to be Held in Trust............................26
Section 4.04. Corporate Existence..........................................................28
Section 4.05. Maintenance of Properties....................................................28
</TABLE>
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<TABLE>
<S> <C>
Section 4.06. Payment of Taxes and Other Claims............................................28
Section 4.07. Limitation on Liens..........................................................28
Section 4.08. Compliance Certificate.......................................................36
Section 4.09. No Lien Created..............................................................37
Section 4.10. No Conflict..................................................................37
Section 4.11. Availability of Information..................................................37
Section 4.12. Waiver of Certain Covenants..................................................37
ARTICLE FIVE. SUCCESSOR COMPANY..................................................................................38
Section 5.01. When Company May Merge, etc..................................................38
Section 5.02. When Securities Must be Secured..............................................38
Section 5.03. Successor Substituted........................................................39
ARTICLE SIX. DEFAULTS AND REMEDIES...............................................................................39
Section 6.01. Events of Default............................................................39
Section 6.02. Acceleration.................................................................41
Section 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee..............43
Section 6.04. Waiver of Past Defaults......................................................44
Section 6.05. Control by Majority..........................................................45
Section 6.06. Limitation on Suits..........................................................45
Section 6.07. Rights of Holders to Receive Payment.........................................46
Section 6.08. Trustee May Enforce Claims Without Possession of Securities..................46
Section 6.09. Trustee May File Proofs of Claim.............................................47
Section 6.10. Priorities...................................................................48
Section 6.11. Undertaking for Costs........................................................48
ARTICLE SEVEN. TRUSTEE...........................................................................................49
Section 7.01. Duties of Trustee............................................................49
Section 7.02. Rights of Trustee............................................................50
Section 7.03. Individual Rights of Trustee.................................................52
Section 7.04. Trustee's Disclaimer.........................................................52
Section 7.05. Notice of Default............................................................52
Section 7.06. Reports by Trustee to Holders................................................53
Section 7.07. Compensation and Indemnity...................................................53
Section 7.08. Replacement of Trustee.......................................................54
Section 7.09. Successor Trustee by Merger, etc.............................................56
Section 7.10. Eligibility..................................................................56
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<S> <C>
Section 7.11. Preferential Claims Against Company..........................................57
Section 7.12. Conflicts of Interest........................................................62
Section 7.13. Acceptance of Appointment by Successor.......................................69
Section 7.14. Appointment of Authenticating Agent..........................................71
ARTICLE EIGHT. DISCHARGE OF INDENTURE............................................................................73
Section 8.01. Satisfaction and Discharge of Indenture......................................73
Section 8.02. Termination of Company's Obligations.........................................74
Section 8.03. Certain Obligations Survive..................................................76
Section 8.04. Condition to Discharge.......................................................76
Section 8.05. Application of Trust Money...................................................76
ARTICLE NINE. SUPPLEMENTAL INDENTURES............................................................................76
Section 9.01. Supplemental Indentures Without Consent of Holders...........................76
Section 9.02. Supplemental Indentures With Consent of Holders..............................78
Section 9.03. Execution of Supplemental Indentures.........................................80
Section 9.04. Effect of Supplemental Indentures............................................80
Section 9.05. Conformity with Trust Indenture Act..........................................80
Section 9.06. Reference in Securities to Supplemental Indentures...........................80
ARTICLE TEN. HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY...................................................81
Section 10.01. Company to Furnish Trustee Names and Addresses of Holders....................81
Section 10.02. Preservation of Information; Communications to Holders.......................81
Section 10.03. Reports by Trustee...........................................................83
Section 10.04. Reports by Company...........................................................84
ARTICLE ELEVEN. SECURITY FORMS...................................................................................85
Section 11.01. Forms Generally..............................................................85
Section 11.02. Form of Face of Security.....................................................86
Section 11.03. Form of Reverse of Security..................................................89
Section 11.04. Form of Trustee's Certificate of Authentication..............................94
</TABLE>
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<TABLE>
<S> <C>
ARTICLE TWELVE. SINKING FUNDS....................................................................................94
Section 12.01. Applicability of Article.....................................................94
Section 12.02. Satisfaction of Sinking Fund Payments with Securities........................95
Section 12.03. Redemption of Securities for Sinking Fund....................................95
ARTICLE THIRTEEN. MEETINGS OF HOLDERS OF SECURITIES..............................................................96
Section 13.01. Purposes of Meetings.........................................................96
Section 13.02. Call, Notice and Place of Meetings...........................................96
Section 13.03. Persons Entitled to Vote at Meetings.........................................97
Section 13.04. Quorum; Action...............................................................97
Section 13.05. Determination of Voting Rights; Conduct and Adjournment of Meetings..........99
Section 13.06. Counting Votes and Recording Action of Meetings.............................100
Section 13.07. Written Consent in Lieu of Meeting of Holders...............................100
ARTICLE FOURTEEN. MISCELLANEOUS.................................................................................101
Section 14.01. Trust Indenture Act Controls................................................101
Section 14.02. Notices.....................................................................101
Section 14.03. No Recourse to Certain Persons..............................................102
Section 14.04. Certificate and Opinion as to Conditions Precedent..........................103
Section 14.05. Statements Required in Certificate or Opinion...............................103
Section 14.06. Form of Documents Delivered to Trustee......................................104
Section 14.07. Acts of Holders.............................................................104
Section 14.08. Governing Law...............................................................105
Section 14.09. No Adverse Interpretation of Other Agreements...............................106
Section 14.10. Effect of Headings and Table of Contents....................................106
Section 14.11. Legal Holidays..............................................................106
Section 14.12. Severability Clause.........................................................106
Section 14.13. Benefits of Indenture.......................................................106
Section 14.14. Successors..................................................................107
Section 14.15. Duplicate Originals.........................................................107
</TABLE>
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<PAGE> 7
INDENTURE, dated as of September 1, 1988, between K N Energy, Inc., a
Kansas corporation (the "Company"), and Continental Illinois National Bank and
Trust Company of Chicago, a national banking association (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE ONE. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"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.
"Agent" means any Registrar or Paying Agent.
"Authenticating Agent" means any Trust Officer or other Person
authorized by the Trustee to act on behalf of the Trustee to authenticate
Securities.
"Board of Directors" means either the Board of Directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors
<PAGE> 8
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934 or,
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the TIA, then the
body performing such duties at such time.
"Company" means the party named as such in the first paragraph of this
instrument until a successor replaces it pursuant to the applicable provisions
of this Indenture, and thereafter "Company" means the successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by an Officer, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of assets
appearing on a consolidated balance sheet of the Company and its Subsidiaries
less, without duplication, the following:
(a) all current liabilities (excluding any thereof which are
extendible or renewable by their terms or replaceable or refundable
pursuant to enforceable commitments at the option of the obligor
thereon without requiring the consent of the obligee to a time more
than 12 months after the time as of which the amount thereof is being
computed and excluding current maturities of long-term indebtedness and
preferred stock);
(b) all reserves for depreciation and other asset valuation
reserves but excluding any reserves for deferred Federal income taxes
arising from accelerated depreciation or otherwise;
(c) all goodwill, trademarks, trade names, patents,
unamortized debt discount and expense and other
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<PAGE> 9
like intangible assets carried as an asset on said balance sheet; and
(d) all appropriate adjustments on account of minority
interests of other persons holding common stock in any Subsidiary.
Consolidated Net Tangible Assets shall be determined in accordance with
generally accepted accounting principles and as of a date not more than 90 days
prior to the happening of the event for which such determination is being made.
"Corporate Trust Office" means the principal office of the Trustee in
Chicago, Illinois, at which at any particular time its corporate trust business
shall be administered which office at the date of original execution of this
Indenture is located at 30 North LaSalle Street, Chicago, Illinois 60697.
"corporation" includes corporations, associations, companies and
business trusts.
"Default" means any event which is, or after notice or passage of time
or both would become, an Event of Default with respect to Securities of a
series.
"Event of Default" has the meaning specified in section 6.01.
"Funded Indebtedness" means any Indebtedness maturing by its terms
(whether pursuant to a sinking fund, mandatory redemption or otherwise) more
than one year from the date of determination.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Security Register.
"Indebtedness" of the Company or a Subsidiary means all items of
indebtedness for borrowed funds (other than unamortized debt discount and
premium), whether or not secured, which would be included in determining the
total liabilities of such Person and would be classified as a liability on the
balance sheet of such Person as of the date as of which Indebtedness is to be
determined, and shall include, without limitation, (a) indebtedness secured by
any mortgage, pledge or other lien or encumbrance of or upon, or any security
interest in, any properties or assets owned by such Person
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<PAGE> 10
and upon which indebtedness such Person customarily pays interest, whether or
not the indebtedness secured thereby shall have been assumed, (b) indebtedness
incurred by other Persons which is guaranteed as to payment of principal by such
Person and (c) indebtedness which is in effect guaranteed by such Person through
a contingent agreement to purchase such indebtedness; provided that the term
"Indebtedness" of any Person shall not include
(i) any indebtedness evidence of which is held in treasury
(but the subsequent resale of such indebtedness shall be deemed to
constitute the creation thereof), or
(ii) any particular indebtedness if, upon or prior to the
maturity thereof, there shall have been deposited with a depositary (or
set aside and segregated, if permitted by the instrument creating such
indebtedness as permitted by the instrument creating such
indebtedness), in trust, money (or evidence of such indebtedness as
permitted by the instrument creating such indebtedness) in the
necessary amount to pay, redeem or satisfy such indebtedness, or
(iii) any obligation, whether or not secured, which is
payable, with respect to principal, premium, if any, and interest,
solely from the proceeds of sales of gas, oil or other hydrocarbons or
minerals to be produced, sold and delivered by the Company or a
Subsidiary, or
(iv) except as provided in clause (c) above, any contingent
obligation of such Person in respect of indebtedness incurred by other
Persons, including, without limitation, agreements to advance or supply
funds to or invest in such other Persons, or
(v) any guarantees with respect to lease or other similar
periodic payments to be made by other Persons, or
(vi) any indebtedness incurred to finance oil, gas,
hydrocarbon or other mineral exploration or development to the extent
that the issuer thereof has outstanding advances to finance oil, gas,
hydrocarbon or other mineral exploration or development but only to the
extent that such advances are not in default;
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<PAGE> 11
provided, however, that, notwithstanding the foregoing, any liability or
obligation described in clause (v) above incurred in connection with the
issuance of debt securities the interest on which is excludable from gross
income of the holder of such security pursuant to Section 103 of the Internal
Revenue Code of 1986, or any successor section, shall be Indebtedness for the
purpose of this Indenture.
"Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 2.01.
"Interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the Vice Chairman, the
President, any Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer (other than the Secretary) and an Assistant Treasurer or Assistant
Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee, and who may be an employee of or counsel to the
Company or the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount
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<PAGE> 12
thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.02.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption, money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 2.05
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder,
(a) the principal amount of an Original Issue Discount
Security that may be counted in making such determination or
calculation and that may be deemed to be Outstanding for such purpose
shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity
thereof pursuant to Section 6.02;
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<PAGE> 13
(b) the principal amount of a Security denominated in a
foreign currency or currencies or currencies as composite currencies
shall be the U.S. dollar equivalent, determined by the Company on the
date of original issuance of such Security and set forth in an
Officers' Certificate, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent determined
by the Company on the date of original issuance of such security and
set forth in an Officers' Certificate of the amount determined as
provided in (a) above) of the Security; and
(c) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be outstanding, except that in
determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be
so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect
to such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
contemplated by Section 2.01.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and,
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<PAGE> 14
for the purposes of this definition, any Security authenticated and delivered
under Section 2.05 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture, as contemplated by Section 2.01.
"Redemption Price," when used with respect to any security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture, as contemplated by Section 2.01.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 2.01.
"Responsible Officer," when used with respect to the Trustee, means the
Chairman or any Vice Chairman of the Board of Directors, the Chairman or any
Vice Chairman of the Executive Committee of the Board of Directors, the Chairman
of the Trust Committee, the President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, the Cashier, any Assistant Cashier, any Senior Trust Officer,
Trust~Officer or Assistant Trust Officer, the Controller or any Assistant
Controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 2.04.
"Special Record Date" for the payment of any Defaulted
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<PAGE> 15
Interest means a date fixed by the Trustee pursuant to Section 2.06.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subordinated Indebtedness" means indebtedness which by its terms is
inferior in right of payment to the Securities in that, among other terms,
payment on account of principal of, premium, if any, or interest on, such
indebtedness is prohibited (i) unless full payment of amounts then due for
principal of, premium, if any, and interest on, the Securities has been made or
duly provided for, (ii) if there shall have occurred and be continuing an Event
of Default, or (iii) upon (x) any acceleration of payment of principal due on
such indebtedness or (y) any payment or distribution of assets of the Company
upon any dissolution, total or partial liquidation or reorganization of the
Company, unless full payment of amounts then due for principal of, premium, if
any, and interest on, the Securities shall first be made or duly provided for.
"Subsidiary" means a corporation of which 80% or more of the
outstanding shares of stock (other than directors' qualifying shares, if any)
entitled to vote in the election of directors are owned directly or indirectly
by the Company or by one or more of its other Subsidiaries or by the Company in
conjunction with one or more of its other Subsidiaries; provided, however, that,
notwithstanding the foregoing, such term shall not include any corporation, the
principal business of which consists of finance, banking, credit, leasing,
insurance, financial services or other similar operations, or any combination
thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture, except as required by
Section 9.05.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if
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<PAGE> 16
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
Securities of that series.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"United States" means the United States of America, including its
territories and possessions.
"U.S. Government Obligations" shall mean securities which are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged; or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America. In either case such
securities shall not be callable or redeemable at the option of the issuer
thereof, and such securities may also include depository receipts issued by a
bank or trust company as custodian with respect to any such U.S. Government
Obligations or specific payments of interest on or principal of any such U.S.
Government Obligations held by such custodian for the account of the holder of
such depository receipts; provided, however, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of any such depository receipt from any amount received by the
custodian in respect of the U.S. Government obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
Section 1.02. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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<PAGE> 17
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance
with generally accepted accounting principles;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in
the plural include the singular;
(6) the words "herein," "hereof" and "hereunder" and words of
similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision; and
(7) provisions apply to successive events and transactions.
ARTICLE TWO. THE SECURITIES
Section 2.01. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limitation upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in
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<PAGE> 18
lieu of, other Securities of the series pursuant to Section 2.04, 2.05,
2.10, 3.07 or 9.06);
(3) the date or dates on which the principal of the Securities
of the series is payable;
(4) the rate or rates, or method by which the rate or rates
are determined, at which the Securities of the series shall bear
interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be
payable and the Regular Record Date for the interest payable on any
Interest Payment Date;
(5) the place or places where the principal of (and premium,
if any) and interest on Securities of the series shall be payable;
(6) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
(7) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and terms
and conditions upon which Securities of the series shall be redeemed or
purchased, 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 declaration of acceleration of the Maturity thereof pursuant to
Section 6.02;
(10) the currency or currencies, including composite
currencies, in which payment of the principal of and any premium and
interest on the Securities of the
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<PAGE> 19
series shall be payable if other than the currency of the United States
of America;
(11) if the amount of payments of principal of and any premium
and interest on the Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined; and
(12) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture) including any
additional covenant or Event of Default with respect to the series.
All Securities of any one series shall be substantially identical
except as to denomination, interest rate and Maturity and except as may
otherwise be provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 2.02. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board of Directors, its Vice Chairman, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
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<PAGE> 20
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities; provided,
however, that, with respect to Securities of a series constituting a medium term
note program, the Trustee shall authenticate and deliver Securities of such
series for original issue from time to time in the aggregate principal amount
established for such series pursuant to such procedures acceptable to the
Trustee and to such recipients as may be specified from time to time by a
Company Order. The maturity date, original issue date, interest rate and any
other terms of the Securities of such series shall be determined by or pursuant
to such Company Order and procedures. If provided for in such procedures, such
Company Order may authorize authentication and delivery pursuant to oral
instructions from the Company or its duly authorized agent, which instructions
shall be promptly confirmed in writing; provided, further, notwithstanding the
provisions of Section 2.01 and of this Section, if all Securities of a series
are not to be originally issued at one time, it shall not be necessary to
deliver, the Officers' Certificate otherwise required pursuant to Section 2.01,
or the Company Order and Opinion of Counsel otherwise required pursuant to this
Section at or prior to the time of authentication of each Security of such
series if such documents are delivered at or prior to the time of authentication
upon original issuance of the first Security of such series. If the form or
terms of the Securities of the series have been established in or pursuant to
one or more Board Resolutions as permitted by Sections 2.01 and 11.01, in
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an opinion of counsel stating
(a) if the form of such Securities has been established by or
pursuant to a Board Resolution as permitted by Section 11.01, that such
form has been established in conformity with the provisions of this
Indenture;
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<PAGE> 21
(b) if the terms of such Securities have been established by
or pursuant to a Board Resolution as permitted by Section 2.01, that
such terms have been established in conformity with the provisions of
this Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such opinion of Counsel, will constitute valid
and legally binding obligations of the Company, enforceable against the
Company, subject to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting the enforcement
of creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
Section 2.03. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 11.01. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
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<PAGE> 22
Section 2.04. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfer of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for
Securities of that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series and of like tenor, of
any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series and of like tenor, of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to
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the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 2.05, 3.07 or 9.06 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
or exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on the date of the relevant mailing
of notice of redemption, or (ii) to register the transfer or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
Section 2.05. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss, or theft of any Security and
(ii) such security of indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable,
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the Company in its discretion may, instead of issuing a new Security, pay such
Security.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
contractual obligation of the Company, 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 this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 2.06. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor securities) is registered
at the close of business on the Regular Record Date for such interest. Unless
otherwise provided as contemplated by Section 2.01 with respect to any series of
Securities, at the option of the Company, payment of interest on any Security
may be, made by check mailed on or before the due date to the address of the
Person entitled thereto as such address shall appear in the Security Register or
by wire transfer to an account designated by such Person.
Any interest on any Security of any series which is payable, but is not
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of
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business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid to each
Holder of Securities of such series at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
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Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.07. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payments of principal of (and premium, if
any) and (subject to Section 2.06) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 2.08. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities shall be destroyed by the Trustee
and the Trustee shall deliver a certificate of such destruction to the Company
unless by a Company Order, the Company shall direct that cancelled Securities be
returned to it.
If the Company 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 for cancellation.
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Section 2.09. Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year of twelve 30-day months.
Section 2.10. Temporary Securities.
Until definitive Securities of any series are ready for delivery, the
Company may prepare and execute and upon Company Order the Trustee shall
authenticate and deliver temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series and of like tenor upon surrender of the temporary
Securities of such series at the office or agency of the Company in a Place of
Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series of
authorized denominations. Until so exchanged, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
Section 2.11. Payment to be in Proper Currency.
In the case of any Securities denominated in any currency (the
"Required Currency") other than U.S. dollars, except as otherwise provided
therein, the obligation of the Company to make any payment of the principal,
premium or interest thereon shall not be discharged or satisfied by any
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tender by the Company, or recovery by the Trustee, in any currency other than
the Required Currency, except to the extent that such tender or recovery shall
result in the Trustee timely holding the full amount of the Required Currency
then due and payable. If any such tender or recovery is in a currency other than
the Required Currency, the Trustee may take such actions as it considers
appropriate to exchange such currency for the Required Currency. The costs and
risks of such exchange, including without limitation the risks of delay and
exchange rate fluctuation, shall be borne by the Company, the Company shall
remain fully liable for any shortfall or delinquency in the full amount of
Required currency then due and payable, and in no circumstances shall the
Trustee be liable therefor except in the case of its negligence of willful
misconduct. The Company hereby waives any defense of payment based upon any such
tender or recovery which is not in the Required Currency, or which, when
exchanged for the Required Currency by the Trustee, is less than the full amount
of Required Currency then due and payable.
ARTICLE THREE. REDEMPTION
Section 3.01. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 2.01 for Securities of any
series) in accordance with this Article.
Section 3.02. Election to Redeem; Notices to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by an Officers' Certificate. In case of any redemption at the election of the
Company of less than all the Securities of any series, the Company shall, at
least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
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Officers' Certificate evidencing compliance with such restriction.
Section 3.03. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
Trustee shall select not more than 45 days prior to the Redemption Date from the
Outstanding Securities of such series not previously called for redemption the
Securities to be redeemed by a method the Trustee considers fair and appropriate
and may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 3.04. Notice of Redemption.
At least 30 days but not more than 45 days before a Redemption Date, a
notice of redemption shall be mailed by first-class mail, postage prepaid, to
each Holder of Securities to be redeemed at this address appearing in the
Security Register.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
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(4) that the redemption is for a sinking fund, if such is the
case;
(5) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and
after the Redemption Date; and
(6) if less than all the Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed.
Notice of redemption of securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, the
Trustee shall give the notice of redemption in the Company's name and at the
expense of the Company.
Section 3.05. Effect of Notice of Redemption.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
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Section 3.06. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 4.03) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
Section 3.07. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE FOUR. COVENANTS
Section 4.01. Payment of Securities.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of such series of the Securities and this Indenture.
Section 4.02. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and
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demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
Section 4.03. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent
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is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of Securities
(other than the Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of
any payment of principal of (and premium, if any) or interest on the
Securities of that series; and
(c) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for three
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
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shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
Section 4.04. Corporate Existence.
Subject to Article Five, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
Section 4.05. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
Section 4.06. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax or charge for which the amount, applicability or
validity is being contested in good faith by appropriate proceedings.
Section 4.07. Limitation on Liens.
Except as hereinafter in this Section 4.07 expressly permitted, so long
as any of the Securities remain outstanding,
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the Company shall not at any time directly or indirectly create, assume or
suffer to exist, and shall not cause, suffer or permit any Subsidiary to create,
assume or suffer to exist, otherwise than in favor of the Company, any mortgage,
pledge or other lien or encumbrance of or upon any of its properties or assets,
real, personal or mixed, whether owned at the date of this Indenture or
thereafter acquired, or of or upon any income or profits therefrom, without
making effective provision, and the Company covenants that in any such case it
shall make or cause to be made effective provision, whereby the Securities then
outstanding and any other indebtedness of the Company then entitled thereto
shall be secured by such mortgage, pledge, lien or encumbrance equally and
ratably with any and all other obligations and indebtedness thereby secured, so
long as any such other obligations or indebtedness shall be so secured.
Nothing in this Section 4.07 shall be construed to prevent the Company
or any Subsidiary from creating, assuming or suffering to exist mortgages,
pledges, liens, or encumbrances evidencing or securing obligations or leases of
the following character to which the provisions of the preceding paragraph shall
not be applicable:
(a) Any mortgage, pledge, lien or encumbrance:
(i) existing on the date of this Indenture; or
(ii) existing on any property of a Subsidiary at the
time it becomes a Subsidiary; or
(iii) existing on any property at the time of the
acquisition thereof by the Company or a Subsidiary, whether or
not assumed by the Company or such Subsidiary; or
(iv) on any property acquired or constructed by the
Company or a Subsidiary and created by the Company or such
Subsidiary not later than 12 months after the date of such
acquisition or the completion of such construction; or
(v) arising by reason of deposits with or the giving
of any form of security to any governmental agency or any
other governmental body created or
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approved by law or governmental regulation for any purpose at
any time in connection with the financing of the acquisition
or construction of property to be used in the business of the
Company or a Subsidiary; or
(vi) created or assumed by the Company or a
Subsidiary in connection with the issuance of debt securities
the interest on which is excludable from gross income of the
holder of such security pursuant to Section 103 of the
Internal Revenue Code of 1986 or any successor section, for
the purpose of financing, in whole or in part, the acquisition
or construction of property to be used by the Company or a
Subsidiary; or
(vii) created or assumed by the Company or a
Subsidiary on any contract for the sale of any product or
service or any rights thereunder or any proceeds therefrom,
including accounts and other receivables, related to the
operation or use of any property acquired by the Company or a
Subsidiary and created not later than 12 months after (x) the
date of such acquisition or (y) commencement of full operation
of such property, whichever is later; or
(viii) created or assumed by the Company or a
Subsidiary on oil, gas, hydrocarbon or mineral properties
owned or leased by the Company or such Subsidiary to secure
loans to the Company or such Subsidiary for the purpose of
developing such properties, irrespective of whether the
Company or a Subsidiary shall assume or guarantee such loans
or otherwise be liable in respect thereof; or
(ix) created to effect payments, both with respect to
principal, premium, if any, and interest, solely out of the
proceeds of gas, oil, hydrocarbons or other minerals to be
produced from the property subject thereto and to be sold or
delivered by the Company or a Subsidiary; or
(x) created by the Company or a Subsidiary on any
contract (or any rights thereunder or proceeds therefrom)
providing for advance by the Company or
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such Subsidiary to finance oil, gas, hydrocarbon or other
mineral exploration and development, which mortgage, pledge or
encumbrance is created to secure indebtedness incurred to
finance such advances;
provided, however, that (A) any mortgage, pledge, lien or encumbrance
referred to in clause (iii) or (iv) above shall be limited to the
property described therein and any replacements thereof or improvements
thereon, and (B) that the principal amount of the indebtedness secured
by any mortgage, pledge, lien or encumbrance referred to in clauses
(iii), (iv), (v) , (vi) and (vii) above, together with all other
indebtedness secured by a lien on the property described therein, shall
not exceed the purchase price (or the cost of construction, as the case
may be) of the property acquired or constructed and any related
financing costs;
(b) Any refunding or extension of maturity, in whole or in
part, of any mortgage, pledge, lien or encumbrance created or assumed
in accordance with the provisions of clauses (i), (ii), (iii), (iv),
(v), (vi), (vii), (viii) and (x) of subdivision (a) above, provided
that the principal amount of the indebtedness so secured shall not
exceed the principal amount of the indebtedness to be refunded or
extended outstanding at the time of such refunding or extension (except
that, where an additional principal amount of indebtedness is incurred
to provide funds for the completion of a specific project on such
property, such additional principal amount, and any related financing
costs, may be so secured), and that such refunding or extended
mortgage, pledge, lien or encumbrance shall be limited in lien to the
same property that secured the mortgage, pledge, lien or encumbrance so
refunded or extended;
(c) Leases (excluding leases arising out of sale and leaseback
arrangements) now or hereafter existing and any renewals or extension
thereof;
(d) Any lease now or hereafter existing and any renewals or
extensions thereof which arise out of the sale and leaseback of
property if:
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(i) the term of such lease is for a temporary period
(not exceeding 36 months) by the end of which it is intended
that the use of such property by the lessee will be
discontinued; or
(ii) such lease is in connection with the issuance of
debt securities, the interest on which is excludable from
gross income of the holder of such security pursuant to
Section 103 of the Internal Revenue Code of 1986 or any
successor section for the purpose of financing, in whole or in
part, the acquisition or construction of property to be used
by or for the Company or a Subsidiary; or
(iii) the net proceeds of such sale are at least
equal to the fair value (as determined by the Board of
Directors of the Company) of such property, and (A) the
Company promptly gives notice of such sale to the Trustee, and
(B) the Company shall, within 120 days after such sale, apply
or cause a Subsidiary to apply an amount equivalent to the net
proceeds of such sale (to the greatest extent possible) to the
redemption of Securities in accordance with the provisions of
Article Three and at the applicable Redemption Price, or to
the repayment of other Funded Indebtedness of the Company
(other than Subordinated Indebtedness), or in part to such
redemption and in part to such repayment; provided that in
lieu of applying an amount equivalent to all or any part of
such net proceeds to such redemption, the Company may, within
75 days after such sale, deliver to the Trustee Securities for
cancellation and thereby reduce the amount to be applied to
any redemption of Securities by an amount equivalent to the
aggregate principal amount of the Securities so delivered; or
(iv) such lease arises out of a sale or transfer by a
Subsidiary to the Company or to another Subsidiary;
(e) Liens reserved in leases for rent and for compliance with
the terms of the lease in the case of leasehold estates;
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(f) Liens arising by reason of deposits with or the giving of
any form of security to any governmental agency or any other
governmental body created or approved by law or governmental regulation
for any purpose at any time as required by law or governmental
regulation as a condition to the transaction of any business or the
exercise of any privilege or license, or to enable the Company or a
Subsidiary to maintain self-insurance or to participate in any fund for
liability on any insurance risks or in connection with workmen's
compensation, unemployment insurance, old age pensions or other social
security or to share in the privileges or benefits required for
companies participating in such arrangements;
(g) Mechanics' or materialmen's liens or any lien or charge
arising by reason of pledges or deposits to secure payment of workmen's
compensation or other insurance, good faith deposits in connection with
tenders or leases of real estate, bids or contracts (other than
contracts for the payment of money), deposits to secure public or
statutory obligations, deposits to secure or in lieu of surety, stay or
appeal bonds and deposits as security for the payment of taxes or
assessments or other similar charges;
(h) Liens of taxes and assessments which are not at the time
delinquent or which are being contested in good faith by appropriate
proceedings by the Company or a Subsidiary;
(i) Liens of any uninsured judgments in an aggregate amount
not in excess of $500,000, or the lien of any uninsured judgment the
execution of which has been stayed or which has been appealed and
secured, if necessary, by the filing of an appeal bond;
(j) Any obligations or duties, affecting the property of the
Company or a Subsidiary, to any municipality or public authority with
respect to any franchise, grant, license or permit;
(k) Rights reserved to or vested in any municipality or
governmental or other public authority or railroad by the terms of any
right, power, franchise,
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grant, license, permit or by any provision of law, to terminate or to
require annual or other periodic payments as a condition to the
continuance of such right, power, franchise, grant, license or permit.
(l) Rights reserved to or vested in any municipality or
public authority to control or regulate any property of the Company or
a Subsidiary, or to use such property in any manner which does not
materially impair the use of such property for the purposes for which
it is held by the Company or such Subsidiary;
(m) Liens upon rights-of-way for pipeline purposes and
undetermined liens and charges incidental to construction or
maintenance;
(n) Any irregularities in or deficiencies of title to any
right-of-way or pipelines, telephone lines, power lines, water lines
and/or appurtenances thereto or other improvements thereon, and to any
real estate used or to be used primarily for right-of-way purposes,
provided that the Company or a Subsidiary shall have obtained from the
apparent owner of the lands or estates therein covered by any such
right-of way a sufficient right, by the terms of the instrument
granting such right-of-way, to the use thereof for the construction,
operation or maintenance of such liens, appurtenances or improvements
for which the same are or are to be used, or the Company or such
Subsidiary has power under eminent domain or similar statutes to remove
such irregularities or deficiencies;
(o)(i) Zoning laws and ordinances and (ii) minor defects and
irregularities in the titles to any property and liens securing
indebtedness neither assumed nor guaranteed by the Company or a
Subsidiary nor on which it customarily pays interest existing upon real
estate or rights in or relating to real estate (including rights-
of-way and easements) acquired by the Company or a Subsidiary for
pipeline, metering station or right-of-way purposes, which defects,
irregularities and liens do not materially impair the use of the
property affected thereby for the purposes for which it is held by the
Company or such Subsidiary;
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(p) Easements, exceptions or reservations in any property of
the Company or a Subsidiary granted or reserved for the purpose of
pipelines, roads, streets, alleys, highways, railroad purposes, and the
removal of oil, gas, hydrocarbon, coal or other minerals, and other
like purposes, or for the use of real property or interests therein,
facilities and equipment, which do not materially impair the use
thereof for the purposes for which it is held by the Company or such
Subsidiary, and any and all rents, royalties, reservations, liens,
encumbrances, and rights or interests of third parties arising by
virtue of any lease or any exploration, development, drilling,
unitization, communitization or operating agreement relating to or
affecting any oil, gas, hydrocarbon, coal or other mineral properties
in which the Company or any Subsidiary has an interest; and
(q) Any mortgage, pledge, lien or encumbrance not permitted by
clauses (a) through (p) above if at the time of, and after giving
effect to, the creation or assumption of any such mortgage, pledge,
lien or encumbrance, the sum of (i) all liabilities included on the
consolidated balance sheet of the Company and its Subsidiaries
representing capitalized lease obligations applicable to leases.
arising from sale and leaseback transactions not permuted by clause
(d), and (ii) the aggregate of all obligations of the Company and its
Subsidiaries secured by any mortgages, pledges, liens or encumbrances
not permitted by all other clauses of this Section 4.07 does not exceed
5% of Consolidated Net Tangible Assets.
As used in this Section 4.07, the term "mortgage" or "lien" shall
include any security interest, and the term "encumbrance" shall include any type
of lease.
If at any time the Company takes any action or a Subsidiary shall take
any action to which the covenant in the first paragraph of this Section 4.07 is
applicable, the Company shall promptly deliver to the Trustee an Officers'
Certificate, stating that such covenant has been complied with, and an opinion
of Counsel, stating that in his opinion such covenant has been complied with and
that any instruments executed by the Company or a Subsidiary in the performance
of such covenant complied with the requirements thereof.
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In the event that the Company or a Subsidiary shall hereafter secure
the Securities equally and ratably with any other obligation or indebtedness
pursuant to the provisions of this Section 4.07, the Trustee is hereby
authorized to enter into an indenture supplemental hereto and to take such
action, if any, as it may deem advisable to enable it to enforce effectively the
rights of the holders of the Securities so secured, equally and ratably with
such other obligation or indebtedness.
Subject to the provisions of Section 7.01, the Trustee may receive an
Opinion of Counsel as conclusive evidence that any such supplemental indenture
or steps to secure the securities equally and ratably comply with the provisions
of this Section 4.07.
Section 4.08. Compliance Certificate.
Annually, within 120 days after the close of each fiscal year beginning
with the fiscal year ending December 31, 1988, the Company shall deliver to the
Trustee a certificate (which shall not be deemed to be an Officers' Certificate
within the meaning of this Indenture and need not conform to the provisions of
Section 15.05) of an officer (other than the Secretary) and the Secretary or an
Assistant Secretary, stating that a review of the activities of the Company and
of its Subsidiaries during such year has been made under their supervision with
a view to determining whether to the best knowledge of such officers the Company
has kept, observed, performed and fulfilled all its covenants, agreements and
obligations under Article Four of this Indenture, and that to the best of their
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant, agreement and obligation on its part under Article Four of this
Indenture and that to the best of their knowledge neither the Company nor any
Paying Agent of the Company is in Default in the performance, observance or
fulfillment of any of the terms, provisions and conditions hereof, and that no
Default exists or, if the Company or any Paying Agent shall be so in Default or
if any Default exists, specifying all such Defaults, and the nature thereof, of
which they may have knowledge.
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Section 4.09. No Lien Created.
This Indenture and the Securities do not create a lien, charge or
encumbrance on the property of the Company or any Subsidiary.
Section 4.10. No Conflict.
The delivery and performance of this Indenture and the issuance of the
Securities do not conflict with or violate any provisions of the Company's
Articles of Incorporation, Bylaws or any other constituent document or agreement
to which the Company is a party.
Section 4.11. Availability of Information.
From time to time, whenever reasonably requested by the Trustee, the
Company will furnish or make available to the Trustee such information as may be
necessary to permit the Trustee to carry out its duties hereunder in addition to
any information which the Company is specifically required to furnish pursuant
to this Indenture.
Section 4.12. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 4.01 to 4.11, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least 66 2/3% in aggregate principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
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ARTICLE FIVE. SUCCESSOR COMPANY
Section 5.01. When Company May Merge, etc.
The Company may consolidate with or merge into, or transfer all or
substantially all of its assets to, one or more other entities if:
(1) the corporation or other successor entity formed by or
surviving such transaction, in the case of a consolidation or
merger, and the transferee, in the case of a transfer, assumes
by supplemental indenture all the obligations of the Company
under all of the Securities and this Indenture;
(2) immediately after giving effect to the transaction,
no Default would occur and be continuing;
(3) the corporation or other successor entity formed by or
surviving such transaction, in the case of a consolidation or
merger, and the transferee, in the case of a transfer, is
organized under the laws of the United States or any state
thereof; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental
indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction
have been complied with.
Subject to the provision of Section 7.01, the Trustee may receive such opinion
of Counsel and Officers' Certificate as conclusive evidence with respect to the
matters therein set forth.
Section 5.02. When Securities Must be Secured.
If upon any consolidation, merger or transfer, any properties or assets
of the Company would become subject to any mortgages, pledges, liens or
encumbrances (other than mortgages, pledges, liens or encumbrances of the types
which such other corporation would have been permitted to create or assume under
any subdivisions (a)(v), (a)(vi), (a)(viii), (a) (x) and (c) to (p), inclusive,
of Section 4.07), the
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Company by supplemental indenture shall secure the Securities equally and
ratably with any other indebtedness of the Company entitled thereto by a direct
lien on all such properties and assets of the Company prior to all liens other
than theretofore existing thereon prior to such consolidation, merger or
transfer.
Section 5.03. Successor Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other corporation or other entity or any transfer of the assets of the
Company substantially as an entirety in accordance with Section 5.01, the
successor corporation or other entity formed by such consolidation or into which
the Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation or other
entity had been named as the Company herein, and thereafter the predecessor
shall be relieved of all obligations and covenants under this Indenture and the
Securities and may liquidate and dissolve.
ARTICLE SIX. DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
"Event of Default," whenever used herein with respect to Securities of
any series, means any one of the following events:
(1) default in the payment of any interest on any Security of that
series when the same becomes due and payable, and the default
continues for a period of 30 days; or
(2) default in the payment of the principal of, or premium, if
any, on, any Security of that series at its Maturity, upon
redemption or otherwise; or
(3) default in the payment of any sinking fund payment, when and
as due by the terms of a Security of that series; or
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(4) the Company fails to observe and perform any other of the
covenants or agreements on the part of the Company in respect
of the Securities of that series in this Indenture for a
period of 90 days after the date on which written notice
specifying such failure, stating that such notice is a "Notice
of Default" hereunder and demanding that the Company remedy
the same, shall have been given to the Company by the Trustee,
or to the Company and the Trustee by the Holders of not less
than 25% in aggregate principal amount of the Securities of
that series at the time Outstanding; or
(5) an event of default, as defined in any mortgage, indenture or
instrument under which there is or may be issued Funded
Indebtedness of the Company or any Subsidiary in a principal
amount exceeding $2,000,000, shall occur with the result that
such Funded Indebtedness shall have been declared due and
payable prior to the date on which it would otherwise become
due and payable or the Company or any Subsidiary shall fail to
pay or refund any Funded Indebtedness in a principal amount in
excess of $2,000,000 within 60 days after the maturity or
extended maturity of such Funded Indebtedness, but if any such
default or failure is cured by the Company or such Subsidiary
or is waived by the specified percentage of holders of such
mortgage, indenture or instrument entitled to so waive, then
the Event of Default under this Indenture by reason of such
default shall be deemed to have been cured; or
(6) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in
an involuntary case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any
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substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order
unstayed and in effect for a period of 90 consecutive days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated bankrupt or
insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of
any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the, admission
by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the
Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities
of that series.
Section 6.02. Acceleration.
If an Event of Default described in clause (1), (2), (3), (4) or (8) of
Section 6.01 with respect to Securities of any series at the time outstanding
occurs and is continuing, then in every such case, the Trustee by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount of such
Securities (or, if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms thereof) and accrued interest, if any,
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on all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) and
accrued interest, if any, shall become immediately due and payable. If an Event
of Default described in clause (5), (6) or (7) of Section 6.01 occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in aggregate principal amount of all the securities then Outstanding
(treated as one class) may declare the principal amount (or, if any such
Securities are original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms thereof) of and accrued interest, if
any, or, all of the Securities to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the Holders) and upon any
such declaration such principal amount (or specified portion thereof) and
accrued interest, if any, shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Securities of that series (or of all the Securities, as the case may be) then
Outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series (or of all the Securities, as the case may be);
(B) the principal of (and premium, if any, on) any
securities of that series (or of all the Securities, as the
case may be) which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities;
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest
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at the rate or rates prescribed therefor in such
Securities; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities of that series which have become due solely by
such declaration of acceleration, have been cured or waived as provided
in Section 6.04.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 6.03. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any of
the Securities of any series when such interest becomes due and payable
and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) the Securities of such series at the Maturity
thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of the Securities of such series, the whole amount then due and payable
on all Securities of such series for principal (and premium, if any) or
interest, as the case may be, and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium, if
any) and on any overdue interest, at the rate or rates prescribed therefor in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such securities and collect the
money adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
Section 6.04. Waiver of Past Defaults.
Prior to the declaration of acceleration of the Securities of any
series as provided in Section 6.02, the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of such series may on
behalf of the Holders of all the Securities of such series waive any past
default or Event of Default described in clause (1), (2), (3), (4) or (8) of
Section 6.01 (or, in the case of an Event of Default specified in clause (5),
(6) or (7) of Section 6.01, the Holders of Securities of a majority in principal
amount of all the Securities then Outstanding (treated as one class) may waive
any such default or Event of Default), and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
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Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the
outstanding Securities of all series affected (treated as one class) 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 it with respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 6.06. Limitation on Suits.
No Holder of any Security of any series shall have the right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in aggregate principal
amount of the Securities of that series (or, in the case of any
proceeding relating to or arising under clause (5), (6) or (7) of
Section 6.01, 25% in aggregate principal amount of all Securities)
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses
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and liabilities to be incurred in compliance with such request;
(4) the Trustee for 90 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 90-day period pursuant to Section
6.05;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to Section
2.06) interest on such Security on the Stated Maturity or Maturities expressed
in such Security, (or, in the case of redemption, on the Redemption Date) and to
bring suit for the enforcement of any such payment, and such rights shall not be
impaired or affected without the consent of such Holder.
Section 6.08. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be
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for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
Section 6.09. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor of their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the
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rights of any Holder thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in the case of the distribution of such money on account of principal, or
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: to the payment of all amounts due the Trustee under
Section 7.07;
SECOND: to the payment of the amounts then due and
unpaid for principal of, premium, if any, and
interest on the Securities in respect of which
or for the benefit of which such money has
been collected, ratably, without preference or
priority of any kind, according to the amounts
due and payable on such Securities for
principal, premium, if any, and interest,
respectively; and
THIRD: to the payment of the remainder, if any, to
the Company, its successors or assigns, or whomsoever
may lawfully be entitled thereto, or as a court of
competent jurisdiction may determine.
The Trustee may fix a record date for any such payment to Holders of
any Security.
Section 6.11. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed that 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, suffered or omitted by it as Trustee, a court
in its discretion may require the filing by any party litigant in the suit,
other than the Trustee, of an undertaking to pay the costs of the suit, and the
court in
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its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section does not apply to any suit instituted by the Company, any suit
instituted by the Trustee, any suit instituted by a Holder pursuant to Section
6.07 or any suit instituted by Holders of more than 25% in aggregate principal
amount of Securities of any series (or, in the case of any suit relating to or
arising under clause (5), (6) or (7) of Section 6.01, 25% in aggregate principal
amount of all Securities) Outstanding.
ARTICLE SEVEN. TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default with respect to Securities of any series has
occurred and is continuing, the Trustee shall with respect to the Securities of
such series exercise such of its 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.
(b) Except during the continuance of an Event of Default with respect
to Securities of any series:
(1) The Trustee undertakes to perform only such duties as are
specifically set forth in this Indentures, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall be under a duty to examine
the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent
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action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph (c) does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series, determined as provided in Section
6.05 or exercising any trust or power conferred upon the Trustee, under
this Indenture with respect to the Securities of such series.
(4) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
Section 7.02. Rights of Trustee.
Subject to the provisions of Section 7.01:
(a) the Trustee may relay and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice,
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request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
right or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note other evidence of indebtedness or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not
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be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
Section 7.03. Individual Rights of Trustee.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any agent of the Company, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to Sections 7.11 and
7.12, may otherwise deal with the Company or an Affiliate with the same rights
it would have if it were not Trustee.
Section 7.04. Trustee's Disclaimer.
The recitals contained herein and in the Securities, except in the
Trustee's certificates of authentication, shall be taken as the statement of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness. The Trustee makes no representation as to the validity or
sufficiency of this Indenture or of the securities. The Trustee or any
Authenticating Agent shall not be accountable for the Company's use or
application of the proceeds from the Securities.
Section 7.05. Notice of Default.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the Holders of Securities of such series;
and provided, further, that in the case of any default of the character
specified in clause (4) of Section 6.01 with respect to Securities of such
series, no such notice to
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Holders shall be given until at least 30 days after the occurrence thereof.
Section 7.06. Reports by Trustee to Holders.
The Trustee shall prepare and forward reports to all Holders as
provided in Section 10.03.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a Trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture. Such expenses
may include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel.
Except as otherwise provided in this Section 7.07, the Company shall
indemnify the Trustee against any loss, liability or expense arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement without its consent.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities, on all money or property held
or collected by the Trustee, except that held in trust to pay the principal of,
premium, if any, and interest on, particular Securities.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, such expenses and
compensation of the Trustee for such services are intended to constitute
expenses of administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 7.13.
(b) The Trustee may resign at any time with respect to the securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee require by Section 7.13 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 7.12 (a)
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 7.10
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
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control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to section 6.11, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 7.13. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 7.13, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 7.13, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
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(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
If at the time a successor to the Trustee succeeds to the trusts
created by this Indenture any of the Securities shall have been authenticated
but not delivered, the successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee and deliver the Securities so
authenticated. If at that time any of the Securities shall not have been
authenticated, any successor to the Trustee may authenticate the Securities
either in the name of any predecessor Trustee hereunder or in the name of the
successor Trustee. In all such cases the certificate of authentication shall
have the same force and effect which the provisions of the Securities or this
Indenture provide that certificates of authentication of the Trustee shall have,
except that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 7.09. Successor Trustee by Merger, etc.
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 the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
Section 7.10. Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the
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laws of the United States of America, any State thereof 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 subject to supervision or
examination by Federal or State authority and having its Corporate Trust Office
in the United States. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said 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 set forth in its most recent report of condition so published. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.11. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within four months prior to a default as defined in Subsection (c) of
this Section, 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
Subsection (c) of this Section:
(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 four months' period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this Subsection, 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 Company
upon the date of such default; and
(2) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in
satisfaction or composition
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thereof, or otherwise, after the beginning of such four months' period,
or an amount equal to the proceeds of any such property, if disposed
of, subject, however, to the rights, if any, of the Company 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 Company) who is liable
thereon, and (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
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act 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 four months' 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 four months' 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 no reasonable cause to believe
that a default, as defined in Subsection (c) of this Section, would
occur within four 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 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 four months' period for property held as security at
the time of such
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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 pre- existing
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 among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders 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 Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act 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 Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act 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
proceedings for reorganization pursuant to the Federal Bankruptcy Act 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 proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders 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 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
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distributions to be made to the Trustee and the Holders 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 which has resigned or been removed after the beginning of
such four months' period shall be subject to the provisions of this Subsection
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this Subsection 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 four months'
period; and
(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section 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 Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the Holders at
the time and in the manner provided in this Indenture;
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(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) 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 Company; and
(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) of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable;
(2) the term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account;
(3) the term "cash transaction" means 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
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orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, 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 Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation;
(5) the term "Company" means any obligor upon the Securities;
and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act
of Title 11 of the United States Code.
Section 7.12. Conflicts of Interest.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign with respect to the Securities of
that series in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit by mail to all Holders of Securities of that series, as
their names and addresses appear in the Security Register, notice of such
failure.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to the Securities of any series if
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(1) the Trustee is trustee under this Indenture with respect
to the outstanding Securities of any series other than that series or
is trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of
the Company 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 the Indenture between the
Company and Continental Illinois National dank and Trust Company of
Chicago, as trustee, dated as of February 1, 1948, as supplemented by
Supplemental Indentures dated as of January 1, 1975, January 1, 1976,
April 1, 1978, and April 1, 1980, pursuant to which the Company issued
its 9 7/8%, 9%, 8 1/2% and 12% Sinking Fund Debentures due January 1,
1995, January 1, 1996, April 1, 1998 and April 1, 2000, and the
Indenture between the Company and Continental Illinois National Bank
and Trust Company of Chicago, as trustee, dated as of October 1, 1982,
pursuant to which the company issued its 13% Sinking Fund Debentures
due October 1, 2002, or any other indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or
indentures are wholly unsecured and such other indenture or
indentures are hereafter qualified under the TIA, unless the
Commission shall have found and declared by order pursuant to
Section 305 (b) or Section 307(c) of the TIA that differences
exist between the provisions of this Indenture with respect to
Securities of that series and one or sore other series or 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 the Securities of that series
and such other series or under such other indenture or
indentures, or
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and after opportunity for hearing thereon, that trusteeship
under this Indenture with respect to the Securities of that
series and such other series or 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 the
Securities of that series and such other series or under such
other indenture or indentures;
(2) the Trustee or any of its directors or executive officers
is an obligor upon the Securities or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee or representative
of the Company, or of an underwriter (other than the Trustee itself)
for the Company who is currently engaged in the business of
underwriting, except that (i) one individual may be a director or an
executive office, or both, of the Trustee and a director or an
executive officer, or both, of the Company but may not be at the same
time an executive officer of both the Trustee and the Company; (ii) 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 Company; and
(iii) the Trustee may be designated by the Company or by any
underwriter for the Company 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 paragraph (1) of this Subsection, to act as trustee,
whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner,
or executive officer thereof,
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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 Company or by any director, partner or executive
officer thereof, or is beneficially owned, collectively, by any two or
more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), (i) 5% or more of the voting
securities, or 10% or more of any other class of security, of the
Company not including the Securities issued under this Indenture and
securities issued under any other indenture under which the Trustee is
also trustee, or (ii) 10% or more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 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 Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 10% or more of any class of
security of any person who, to the knowledge of the Trustee, owns 50%
or more of the voting securities of the Company; or
(9) the Trustee owns, on May 15 in any calendar year, 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 paragraph (6), (7) or (8) 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
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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 May 15 in each
calendar year, the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such May 15.
If the Company fails to make payment in full of the principal of (or
premium, if any) 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 (6), (7) and (8) of this Subsection.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this Subsection 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
paragraph (3) or (7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) 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; (ii) 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 (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this
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Indenture irrespective of any default hereunder, or (C) any security which it
holds as agent for collection, or as custodian, escrow agent or depositary, or
in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter", when used with reference to the
Company, means every person who, within three years prior to the time
as of which the determination is made, has purchased from the Company
with a view to, or has offered or sold for the Company in connection
with, the distribution of any security of the Company outstanding at
such time, or has participated or has had a direct or indirect
participation in any such undertaking, or has participated or has had a
participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest
was limited to a commission from a underwriter or dealer not in excess
of the usual and customary distributors' or sellers' commission.
(2) The term "director" means any director of a corporation or
any individual performing similar functions with respect to any
organization, whether incorporate or unincorporated.
(3) The term "person" means 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.
(4) The term "voting security" means 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.
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(5) The term "Company" means any obligor upon the Securities.
(6) The term "executive officer" means 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 shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
(each of whom is referred to 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.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(3) 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.
(4) 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:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
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(ii) securities of an issuer 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:
(iii) 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
(iv) securities held in escrow if placed in escrow by
the issuer thereof;
provided, however, 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.
(5) 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,
however, 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 7.13. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such
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retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those
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series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept is appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 7.14. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 2.05, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any state thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
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provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 7.07.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's
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certificate of authentication, an alternate certificate of authentication in the
following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY
OF CHICAGO,
as Trustee
By
--------------------------------------
as Authenticating Agent
By
--------------------------------------
Authorized Officer
ARTICLE EIGHT. DISCHARGE OF INDENTURE
Section 8.01. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.05 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 4.03) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
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(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.07, the obligations of
the Trustee to any Authenticating Agent under Section 7.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 8.05 and the last
paragraph of Section 4.03 shall survive.
Section 8.02. Termination of Company's Obligations.
Subject to Sections 8.03 and 8.04, the Company may terminate all of its
obligations under this Indenture and the Securities with respect to the
Securities of any series if
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the Company irrevocably deposits in trust with the Trustee money or U.S.
Government Obligations the principal of and interest on which are sufficient
(without reinvestment and assuming no tax liability will be imposed on the
Trustee) to pay principal (and premium, if any) and interest on the Securities
to Maturity or redemption, as the case may be.
However, such termination shall not become effective until the later of
the ninety-first day following such deposit or the first day on which there is
not a continuing Event of Default described in Section 6.01(6) or 6.01(7)
(without giving effect to the period of time set forth therein). Moreover, such
termination shall not relieve the Company of its obligations under such
Securities and this Indenture to pay when due the principal of (and premium, if
any) and interest on the Securities if such Securities are not paid or not
considered paid when due from the money or U.S. Government Obligations so
deposited (and the proceeds thereof).
The Company will make any necessary arrangements for the redemption of
the Securities at a future date in accordance with Article Eleven.
After a deposit is made in accordance with this Section 8.02 with
respect to any series and the termination of obligations with respect to that
series becomes effective:
(a) the Trustee (with respect to that series only) and each
Holder of the Securities of that series shall no longer be entitled to
the benefit of and security under this Indenture except as provided in
Section 8.03; and
(b) the Trustee shall:
(1) acknowledge in writing the termination of the
Company's obligations with respect to the Securities of that
series except for the surviving obligations provided in
Section 8.03; and
(2) execute, deliver and file any instrument
necessary or appropriate to effect such termination and
release of such obligations of the Company.
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Section 8.03. Certain Obligations Survive.
The Company's obligations in Sections 2.03, 2.05, 2.06, 4.01, 4.02,
4.03, 7.07, 7.08, 7.09, 7.10 and Article Twelve shall survive until the
Securities are no longer Outstanding. Thereafter, the Company's obligation in
Section 7.07 shall survive.
Section 8.04. Condition to Discharge.
The Company shall not be entitled to deposit cash or U.S. Government
Obligations with the Trustee and terminate its obligations with respect to any
Securities in accordance with Section 8.02, unless the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that (i) the
Holders of such Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and termination and (ii) such
Holders (and future Holders of such Securities) will be subject to tax in the
same manner as if such deposit and termination had not occurred.
Section 8.05. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 4.03, the
Trustee shall hold in trust all money or U.S. Government Obligations deposited
with it pursuant to this Article Eight. The Trustee shall apply the deposited
money and the money from U.S. Government Obligations either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) and in
accordance with this Indenture to the payment to the Persons entitled thereto of
the principal of, premium, if any, and interest on, for whose payment such money
has been deposited with the Trustee. The Trustee and each Paying Agent shall
promptly pay to the Company upon Company Request any excess money or U.S.
Government Obligations held by them at any time.
ARTICLE NINE. SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more
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indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Defaults; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there are no Securities outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities pursuant to the requirements of
Section 4.07 or 5.02 or otherwise; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 11.01 and 2.01; or
(8) 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 7.13(b); or
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(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities of any
series in any material respect; or
(10) to provide for the issuance under this Indenture of
Securities of any series payable as to principal or premium, if any, or
interest in any foreign currency or currencies (including without
limitation European Currency Units), to provide for the payment for
Securities of any series with any such currency or currencies and, if
the currency for which Securities of any series may be purchased, or in
which the principal of or any interest thereon may be payable, is at
the purchaser's election, then to provide for the manner in which any
such election may be made, and to make all appropriate changes for any
such purpose.
Section 9.02. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than 66 2/3% in aggregate
principal amount of the Outstanding Securities of all series affected by such
supplemental indenture (treated as one class), by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of each such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an original Issue Discount Security that
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would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.02, or change any Place of
Payment where, or the coin or currency or composite currency in which,
any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the redemption Date), or
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series or of all series (treated as one
class), as the case may be, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in the Indenture; or
(3) modify any of the provisions of this Section, Section 4.12
or Section 6.04, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section
and Section 4.12, or the deletion of this proviso, in accordance with
the requirements of Sections 7.13(b) and 9.01(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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Section 9.03. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.01) shall be fully protected in relying upon, an
opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect.
Section 9.06. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series and of like tenor.
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ARTICLE TEN. HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
Section 10.01. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not later than January 15 and July 15 of each year,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of the preceding January 1 or July 1, as the case
may be, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than, 15 days prior to the time such list
is furnished;
provided that if and so long as the Trustee shall be the Security Registrar,
such list need not be furnished.
Section 10.02. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 10.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 10.01 upon receipt of a new list so furnished.
(b) If three or more Holders (herein 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 with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants proposed to transmit,
then the Trustee shall, within five business
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days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 10.02(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 10.02(a), and as
to the approximate cost of mailing to such Holders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 10.02(a) 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 interest of the Holders
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 to declaring, the Trustee shall mail
copies of such material to all such Holders 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) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee
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that neither the Company nor the Trustee nor any agent of either of them shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders in accordance with Section 10.02(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 10.02(b).
Section 10.03. Reports by Trustee.
(a) On or before August 1 in each year following the date hereof, the
Trustee shall transmit by mail to all Holders, as their names and addresses
appear in the Security Register, a brief report dated as of the next preceding
June 1 with respect to:
(1) its eligibility under Section 7.10 and its qualifications
under Section 7.12, or in lieu thereof, if to the best of its knowledge
it has continued to be eligible and qualified under said Sections, a
written statement to such effect;
(2) 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, 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 the Securities Outstanding on the date of
such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (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 an indebtedness based upon a
creditor relationship arising in any manner described in Section
7.13(b)(2), (3), (4) or (6);
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(4) the property and funds, if any, physically in
the possession of the Trustee as such on the date of such
report;
(5) any additional issue of Securities which the Trustee has
not previously reported; and
(6) any action taken by the Trustee in the performance of its
duties hereunder 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 the Trustee
in accordance with Section 7.02.
(b) The Trustee shall transmit by mail to all Holders, as their names
and addresses appear in the Security Register, 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 Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee and which it has not previously reported
pursuant to this Subsection, 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 the Securities Outstanding at
such time, such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 10.04. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission,
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copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections,
then it shall file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission
ARTICLE ELEVEN. SECURITY FORMS
Section 11.01. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed
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thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form of
Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
2.02 for the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.
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 11.02. Form of Face of Security.
[If the Security is an Original Issue Discount Security, insert -- FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS % OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS , 19 . THE YIELD TO MATURITY IS %. THE METHOD USED
TO DETERMINE THE YIELD IS THE METHOD AND THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT APPLICABLE TO THE SHORT ACCRUAL PERIOD FROM THE DATE OF ISSUANCE OF
THIS SECURITY TO , 19 IS % OF THE PRINCIPAL
AMOUNT OF THIS SECURITY.]
K N ENERGY, INC.
[Insert Title of Securities]
No. $
K N Energy, Inc., a corporation duly organized and existing under the
laws of Kansas (herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to , or registered assigns, the principal sum of
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Dollars on [if the Security is to bear interest prior to Maturity,
insert -- , and to pay interest thereon from or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, [semi-annually in arrears on and in each year]
[annually in arrears on in each year], commencing ,
at the rate of % per annum, until the principal hereof is paid or made
available for payment [if applicable, insert -- , and (to the extent that the
payment of such interest shall be legally enforceable) at the rate of % per
annum on any overdue principal and premium, if any, and on any overdue
installment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be [ or ] (whether or not a Business
Day) [,as the case may be,] next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
maturity and in such case the overdue principal of this Security shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on
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any overdue principal that is not so paid on demand shall bear interest at the
rate of % per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided for,
and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and if applicable
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in _______________, [insert
place of payment and, if applicable, also insert -- or, at the option of the
holder hereof, at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, State of New York] in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts [if applicable, insert
- -- ; provided however, that at the option of the Company payment of interest may
be made by check mailed on or before the due date to the address of the Person
entitled thereto as such address shall appear in the Security Register or by
wire transfer to an account designated by such person.]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
K N ENERGY, INC.
By
----------------------------------
ATTEST:
- --------------------------------
Secretary
Section 11.03. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of September 1, 1988 (herein called the
"Indenture"), between the Company and Continental Illinois National Bank and
Trust Company of Chicago, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [, limited in
aggregate principal amount to $ ].
[If applicable, insert -- The Securities of this series are not
redeemable, in whole or in part, prior to the Stated Maturity thereof.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on in any year commencing with the year and ending with
the year through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after , 19 ], as a whole or in part, at the election of the
Company, at the
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following Redemption Prices (expressed as percentages of the principal amount):
If redeemed [on or before , %, and if redeemed] during the
12-month period beginning of the years indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on in any year
commencing with the year and ending with the year through operation
of the sinking fund for this series at the Redemption Prices for redemption
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below, and (2) at any time [on or after ],
as a whole or in part, at the election of the Company, at the Redemption Prices
for redemption otherwise than through operation of the sinking fund(expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning of the years indicated,
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Redemption Price Redemption Price
For Redemption For Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
- ---- ------------------- ------------------------
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to ,
redeem any Securities of this series as contemplated by [Clause (2) of] the
preceding paragraph as a part of any refunding operation by the application of
the proceeds of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than % per annum.)
[The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending with the
year of [not less than] $ [("mandatory sinking fund") and not more
than $ ] aggregate principal amount of Securities of this series. [Securities
of this series acquired or redeemed by the Company otherwise than through
(mandatory) sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made.]
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like
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tenor for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
[If the Security is not an Original Issue Discount Security. -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of and accrued interest on the securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.]
[If the Security is an Original Issue Discount Security. -- If an
Event of Default with respect to securities of this series shall occur and be
continuing, an amount of principal of and accrued interest on the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to -- insert formula for
determining the amount.] Upon payment (i) of the amount of principal and accrued
interest, if any, so declared due and payable and (ii) of interest on any
overdue principal and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and interest, if any,
on the Securities of this series shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of all series to be affected (treated as one class). The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series (or, in some
cases, of all of the Securities) at the time Outstanding, on behalf of the
Holders of all Securities of such series (or of all of the securities, as the
case may be), to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in
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lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $_______________ and any integral multiple
thereof [except as such amounts may be adjusted following a partial redemption
and related selections under Article Three of the Indenture]. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of Securities
of this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and
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neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Section 11.04. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY
OF CHICAGO,
as Trustee
By
----------------------------
Authorized Officer
ARTICLE TWELVE. SINKING FUNDS
Section 12.01. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 2.01 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum-amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 12.02. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
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Section 12.02. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
Series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 12.03. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee a Company Order
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, if the portion thereof, if any, which is
to be satisfied by payment of cash and the portion thereof, if any, which is to
be satisfied by delivering and crediting Securities of that series pursuant to
Section 12.02 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.03 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.04. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.06 and 3.07.
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ARTICLE THIRTEEN. MEETINGS OF HOLDERS OF SECURITIES
Section 13.01. Purposes of Meetings.
A meeting of Holders of Securities of any or all series, as the case
may be, may be called at any time and from time to time pursuant to the terms of
this Article Thirteen for any of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of any
default hereunder and its consequences, or to take any other action
authorized to be taken by Holders of Securities of any or all series,
as the case may be, pursuant to the provisions of Article Six;
(2) to remove the Trustee and appoint a successor trustee
pursuant to the provisions of Article Seven;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of a percentage in aggregate principal amount of
the Securities of any or all series, as the case may be, under any
other provisions of this Indenture or under applicable law.
Section 13.02. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Securities
of any or all series, as the case may be, for any purpose specified in Section
13.01, to be held at such time and at such place in the United States as the
Trustee shall determine. Notice of every meeting of Holders of Securities of any
or all series, as the case may be, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 14.02, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
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(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the Outstanding Securities of
any or all series, as the case may be, shall have requested the Trustee to call
a meeting of the Holders of such Securities for any purpose specified in Section
13.01, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have mailed the notice of
such meeting within 21 days after receipt of such request, then the Company or
the Holders of such Securities in the amount above specified, as the case may
be, may determine the time and the place in the United States for such meeting
and may call such meeting for such purposes by giving notice thereof as provided
in subsection (a) of this Section.
Section 13.03. Persons Entitled to Vote at Meetings.
To the entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
the series with respect to which the meeting is called or, should the meeting be
called with respect to the Securities of all series, a Holder of one or more
Securities of any series, or (2) a Person appointed by an instrument in writing
as proxy for a Holder or Holders of one or more such Outstanding Securities. The
only Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 13.04. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Securities of a series (or of all the Securities, as the case may be)
Outstanding shall constitute a quorum for a meeting of Holders of Securities of
such series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than 66 2/3% in principal
amount of the Securities of a series (or of all the Securities, as the case may
be) Outstanding, the Persons entitled to vote 66 2/3% in principal amount of the
Securities of such series (or of all the Securities, as the case may be)
Outstanding shall constitute a quorum. In the absence of a quorum within
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30 minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of such Securities, be dissolved. In any
other case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 13.02(a), except that such notice need be given
only once not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the Securities of such series (or of all the Securities, as the case may be)
Outstanding which shall constitute a quorum.
Except as limited by the proviso to Section 9.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the Holders
of a majority in principal amount of the Securities of that series (or of all
the Securities, as the case may be) Outstanding: provided, however, that, except
as limited by the proviso to Section 9.02, any resolution with respect to any
consent or waiver which this Indenture expressly provides may be given by the
Holders of not less than 66 2/3% in principal amount of the Securities of a
series (or of all the Securities, as the case may be) Outstanding may be adopted
at a meeting or an adjourned meeting duly convened and at which a quorum is
present as aforesaid only by the affirmative vote of the Holders of 66 2/3% in
principal amount of such Outstanding securities; and provided, further, that,
except as limited by the proviso to Section 9.02, any resolution with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Securities of a series (or of all the Securities, as the
case may be) Outstanding may be adopted at a meeting or an adjourned meeting
duly reconvened and at which a quorum is present as aforesaid by the affirmative
vote of the Holders of such specified percentage in principal amount of such
Outstanding Securities.
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Any resolution passed or decision taken at any meeting of Holders of
Securities of any or all series, as the case may be, duly held in accordance
with this Section shall be binding on all the Holders of such Securities whether
or not present or represented at the meeting.
Section 13.05. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities of the
series with respect to which the meeting is called and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 14.07 and the appointment of any proxy shall be proved in the manner
specified in Section 14.07. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 14.07 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 13.02(b), in which
case the Company or the Holders of Securities calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
such series represented at the meeting.
(c) At any meeting each Holder of a Security or proxy entitled to vote
as provided in this Article shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and
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ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called pursuant to
Section 13.02 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding
Securities represented at the meeting; and the meeting may be held as so
adjourned without further notice.
Section 13.06. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or proxies entitled to vote thereat and
the principal amounts and serial numbers. of the Outstanding securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in triplicate of all votes cast at the meeting. A
record, at least in triplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 13.02 and, if
applicable, Section 13.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 13.07. Written Consent in Lieu of Meeting of Holders.
The written authorization or consent of the requisite percentage of
Holders herein provided, entitled to vote at
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any such meeting, evidenced as provided in Section 14.07 and filed with the
Trustee, shall be effective in lieu of a meeting of Holders, with respect to any
matter provided for in this Article Thirteen.
ARTICLE FOURTEEN. MISCELLANEOUS
Section 14.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision hereof which is required to be included in this Indenture by
the TIA, the required provision shall control.
Section 14.02. Notices.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at P.O. Box 15265, Lakewood,
Colorado 80215, or at any other address previously furnished in writing
to the Trustee by the Company.
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(b) Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date, and not earlier
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than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. 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.
(c) In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification, for every purpose hereunder.
Section 14.03. No Recourse to Certain Persons.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or such successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, past, present or future, of the Issuer or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom:
and that any and all such personal liability, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director, as such,
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because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issue of such Securities.
Section 14.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied
with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Section 14.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(1) a statement that the Persons signing such certificate or
opinion has read such covenant or condition and any definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
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(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 14.06. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Section 14.07. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents, duly
appointed in writing; and, except as herein otherwise
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expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such security.
Section 14.08. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
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Section 14.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 14.10. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 14.11. Legal Holidays.
In any case where any Interest Payment Date, redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
Section 14.12. Severability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 14.13. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
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Section 14.14. Successors.
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns whether so expressed or not.
Section 14.15. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One signed
copy shall be enough to prove this Indenture.
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SIGNATURES
Dated: K N ENERGY, INC.
September 23, 1988 By /s/ E.W. LUNDHAGEN
---------------------------
Vice President
(SEAL)
ATTEST:
/s/ ROBERT C. MCHUGH
- ----------------------
Secretary
Dated: CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY
OF CHICAGO,
TRUSTEE
September 23, 1988 By /s/ [ILLEGIBLE]
-------------------------
Vice President
(SEAL)
ATTEST:
/s/ [ILLEGIBLE]
- ----------------------
Trust Officer
================================================================================
<PAGE> 1
EXHIBIT 4(c)
- -------------------------------------------------------------------------------
K N ENERGY, INC.
AND
CONTINENTAL BANK, NATIONAL ASSOCIATION
TRUSTEE.
----------
SECOND SUPPLEMENTAL INDENTURE
----------
Dated as of December 15, 1992
Supplementing the Indenture
dated as of
September 1, 1988
- -------------------------------------------------------------------------------
<PAGE> 2
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of December 15, 1992,
between K N Energy, Inc., a Kansas corporation (the "Company"), and Continental
Bank, National Association, a national banking association (the "Trustee"), as
Trustee under the Original Indenture referred to below,
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issuance from time to
time of its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series; and the Company has
heretofore made, executed and delivered to the Trustee its Indenture dated as
of September 1, 1988 (such Indenture, as amended by the Trust Indenture Reform
Act of 1990 and the First Supplemental Indenture dated as of January 15, 1992,
being sometimes referred to herein as the "Original Indenture") pursuant to
which the Securities are issuable;
WHEREAS, Sections 2.01, 9.01(7) and 11.01 of the Original Indenture
provide that the form or terms of any series of Securities may be established
in an indenture supplemental thereto, and the Company desires to establish in
this Second Supplemental Indenture both the form and terms of a series of
Securities designated as its 7.27% Senior Notes due December 15, 2002 (the
"Notes");
WHEREAS, Section 9.01 of Article Nine of the Original Indenture
further provides that under certain conditions the Company and Trustee, may,
without the consent of any Holders, from time to time and at any time, enter
into an indenture or indentures supplemental thereto, for the purposes, inter
alia, of adding to the covenants of the Company for the benefit of the Holders
of all or any series of Securities, and adding any additional Events of
Default, and the Company desires by means of this Second Supplemental Indenture
to add to its covenants for the sole benefit of the Holders of the Notes and to
add certain additional Events of Default, also solely for the benefit of such
Holders;
WHEREAS, all things necessary to authorize the execution and delivery
of this Second Supplemental Indenture, to establish the Notes as provided for
in this Second Supplemental Indenture, and to make the Original Indenture, as
supplemented by this Second Supplemental Indenture (the Original Indenture, as
so supplemented by this Second Supplemental Indenture, being sometimes referred
to herein as the "Indenture"), a valid agreement of the Company, in accordance
with its terms, have been done;
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH that for
and in consideration of the premises and the purchase of the Notes by the
Holders, the Company and the Trustee mutually covenant and agree, solely
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for the equal and proportionate benefit of the respective Holders from time to
time of the Notes, as follows:
ARTICLE 1
SUPPLEMENT OF THE ORIGINAL INDENTURE
Section 1.1 SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE.
Section 1.01 of the Original Indenture is supplemented by inserting therein, in
alphabetical order, the following definitional paragraphs:
"Assets" means any property of the Company or a Subsidiary used in
businesses in which the Company and its Subsidiaries are engaged as of December
15, 1992.
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be redeemed at the option of the Company or is declared to
be immediately due and payable pursuant to the acceleration provisions of the
Indenture, as the context requires.
"Capitalization" means, with respect to any Material Subsidiary, the
sum of (A) the total of the amounts set forth on the consolidated balance sheet
of such Material Subsidiary and its Subsidiaries, prepared in accordance with
generally accepted accounting principles as of the date of the most recent
regularly prepared consolidated financial statements prior to the taking of any
action for the purpose of which the determination is being made, as (a) the par
or stated value of all outstanding capital stock of such Material Subsidiary,
(b) capital in excess of par value, (c) retained earnings and (d) deferred
income taxes and (B) the principal amount of Funded Indebtedness of such
Material Subsidiary and its Subsidiaries computed on a consolidated basis as of
the time of such determination.
"Consolidated Assets" means the total amount of assets appearing on
the consolidated balance sheet of the Company and its Subsidiaries, prepared in
accordance with generally accepted accounting principles as of the date of the
most recent regularly prepared consolidated financial statements prior to the
taking of any action for the purposes of which the determination is being made.
"Consolidated Capitalization" means the sum of (A) the total of the
amounts set forth on the consolidated balance sheet of the Company and its
Subsidiaries, prepared in accordance with generally accepted accounting
principles as of the date of the most recent regularly prepared consolidated
financial statements prior to the taking of any action for the purpose of which
the determination is being made, as (a) the par or stated value of all
outstanding capital stock of the Company, (b) capital in excess of par value,
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<PAGE> 4
(c) retained earnings and (d) deferred income taxes and (B) the principal
amount of Funded Indebtedness of the Company and its Subsidiaries computed on a
consolidated basis as of the time of such determination.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective Stated Maturities to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Executive Officer" means the Chairman, any Vice Chairman, the
President, the Chief Financial Officer and the General Counsel of the Company,
and, to the extent not included in the foregoing, the chief executive officer,
the chief operating officer and the chief accounting officer of the Company.
"Material Subsidiary" means (i) any Subsidiary the assets of which
constitute 15% or more of Consolidated Assets; (ii) Northern Gas Company, a
Wyoming corporation; and (iii) Rocky Mountain Natural Gas Company, a Colorado
corporation.
"Notes" means the series of the Securities denominated as the 7.27%
Senior Notes due December 15, 1992.
"Note Agreement" means the Note Agreement dated as of December 15,
1992 among the Company, The Prudential Insurance Company of America and
Prudential Reinsurance Company, as the same may be amended or supplemented from
time to time.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting
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<PAGE> 5
U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between yields
reported for various maturities.
"Remaining Average Life" means, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) each Remaining Scheduled Payment of such
Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the Stated Maturity
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
Stated Maturity.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be redeemed at the option
of the Company or is declared to be immediately due and payable pursuant to the
acceleration provisions of the Indenture, as the context requires.
"Stock" means any capital stock of any corporation or any partnership
interest of any partnership (limited or general), any joint venture interest in
any joint venture, and any similar interests.
"Tangible Net Worth" means the total assets of the Company and its
Subsidiaries appearing on a consolidated balance sheet prepared in accordance
with generally accepted accounting principles (exclusive of goodwill, patents,
trademarks, trade names, organization expense, treasury stock, unamortized debt
discount and premium, deferred charges and other like intangibles) less all
liabilities (including deferred income taxes and subordinated liabilities).
"Yield-Maintenance Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield Maintenance Amount shall in no event be less
than zero.
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<PAGE> 6
Section 1.2 SUPPLEMENT TO ARTICLE FOUR OF THE ORIGINAL INDENTURE.
Article Four of the Original Indenture is supplemented by inserting the
following Sections at the end thereof:
Section 4.13. Maintain Business.
The Company will, and will cause each of its Subsidiaries to, carry on
and conduct its respective business in substantially the same manner and in
substantially the same general lines of business as it is presently conducted,
including without limitation the transmission and retail distribution of
natural gas.
Section 4.14. Maintain Insurance.
The Company will maintain or cause to be maintained with, in the good
faith judgment of the Company, financially sound and reputable insurers, or
through self-insurance, insurance with respect to its properties and business
and the properties and businesses of its Subsidiaries against loss or damage of
the kinds customarily insured against by corporations of established reputation
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. Such insurance may include self-insurance or be
subject to co-insurance, deductibility or similar clauses which, in effect,
result in self-insurance of certain losses, provided that such self-insurance
is in accord with the approved practices of corporations similarly situated and
adequate insurance reserves are maintained in connection with such
self-insurance, and, notwithstanding the foregoing provisions of this Section
4.14 the Company or any Subsidiary may effect workers' compensation or similar
insurance in respect of operations in any state or other jurisdiction either
through an insurance fund operated by such state or other jurisdiction or by
causing to be maintained a system or systems of self-insurance in accord with
applicable laws.
Section 4.15. Funded Indebtedness.
The Company will not incur, and will not permit any Subsidiary to
incur, any Funded Indebtedness unless the aggregate amount of Funded
Indebtedness of the Company and its Subsidiaries computed on a consolidated
basis immediately thereafter (after giving effect to the substantially
concurrent use of proceeds of such Funded Indebtedness) will not exceed an
amount equal to 65% of Consolidated Capitalization.
Section 4.16. Subsidiary Debt.
The Company will not permit any of its Material Subsidiaries to incur
any Funded Indebtedness unless the aggregate amount of Funded Indebtedness of
such Material Subsidiary and its Subsidiaries immediately thereafter (after
giving effect to the
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<PAGE> 7
substantially concurrent use of proceeds of such Funded Indebtedness) will not
exceed an amount equal to 65% of such Material Subsidiary's Capitalization.
Further, the Company will not permit any of its Subsidiaries to incur any
Funded Indebtedness unless the aggregate amount of Funded Indebtedness of all
of the Company's Subsidiaries immediately thereafter (after giving effect to
the substantially concurrent use of proceeds of such Funded Indebtedness) will
not exceed an amount equal to 51% of the aggregate amount of Funded
Indebtedness of the Company and its Subsidiaries. For purposes of this Section
4.16, the term "Funded Indebtedness" excludes any Funded Indebtedness of the
Company to its Subsidiaries or any Funded Indebtedness of a Subsidiary to the
Company or another Subsidiary.
Section 4.17. Net Worth.
If at any time the rating of any of the long term senior debt of the
Company is reduced by either Moody's Investors Service or Standard & Poor's
Corporation to a rating below Baa2 or BBB+, as applicable (or in the absence of
such a rating by either Standard & Poor's Corporation or Moody's Investors
Service, a rating comparable to Baa2 by another nationally recognized
statistical rating organization) (any such event, a "Downgrade"), then the
Company will not permit its Tangible Net Worth to be less than the greater of
(i) $150,000,000 or (ii) an amount equal to 90% of the Company's Tangible Net
Worth as of the fiscal year end next preceding the date of the Downgrade.
Section 4.18. Sale of Assets.
The Company will not, and will not permit any Subsidiary to, sell,
transfer or otherwise dispose of, in a transaction or a series of substantially
related transactions, Stock of a Subsidiary, property or other assets
(including without limitation a disposition of the Stock of a Subsidiary,
property or other assets pursuant to an order, judgment or decree of a court or
governmental authority) with a fair market value of 20% or more of Consolidated
Assets (other than any such disposition by a Subsidiary to the Company or by
the Company or a Subsidiary to another Subsidiary), unless (i) said Stock,
property or other assets are sold, transferred or otherwise disposed of for a
consideration at least equal to the fair value thereof (as determined by the
Board of Directors of the Company) and (ii) the proceeds of such asset
disposition are applied to the defeasance or the payment of Funded Indebtedness
of the Company or any Subsidiary, or used within twelve months of such asset
disposition to purchase or invest in Assets.
Section 4.19. Sale of Subsidiary Stock.
Issuance of Stock by Subsidiaries. The Company will not, and will not
permit any Subsidiary to, issue, sell or otherwise dispose of any Stock (either
directly, or indirectly by
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<PAGE> 8
the issuance of rights or options for, or securities convertible into, such
Stock) of any Material Subsidiary (other than directors' qualifying shares),
except to the Company or another Material Subsidiary, if, as a result of such
issuance, sale or disposition (giving full effect to the exercise of any such
rights, options or conversion rights) such Material Subsidiary would no longer
qualify as a Subsidiary.
Section 4.20. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 4.13 through 4.19,
inclusive, with respect to the Notes if before the time for such compliance the
holders of at least 66 2/3% in aggregate principal amount of the Outstanding
Notes shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
Section 4.21. Premium on Certain Defaults.
The Company will pay a premium on each of the Outstanding Notes equal
to the Yield-Maintenance Amount, if any, in the event the Notes are declared to
be due and payable immediately pursuant to Article Six as a result of any of
the Events of Default referred to either in clauses (1)-(5) of Section 6.01 or
in subclauses (a)-(e) of clause (8) thereof.
Section 1.3 SUPPLEMENT TO ARTICLE SIX OF THE ORIGINAL INDENTURE.
Section 6.01 of the Original Indenture is supplemented by inserting, as part of
clause (8) thereof, the following subclauses:
(a) default in the payment of any interest on any Note for
more than 10 days after the date due; or
(b) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any Indebtedness (other than the Notes)
beyond any period of grace provided with respect thereto, or the
Company or any Subsidiary fails to perform or observe any other
agreement, term or condition contained in any agreement under which
any such Indebtedness is created (or if any other event thereunder or
under any such agreement shall occur and be continuing) and the effect
of such failure or other event is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee on behalf of such holder or
holders) to cause, such Indebtedness to become
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<PAGE> 9
due (or to be repurchased by the Company or any Subsidiary) prior to
any Stated Maturity, provided that the aggregate amount of all
Indebtedness as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur
and be continuing exceeds $10,000,000; provided, however, if any such
payment default, failure or other event is cured by the Company or
such Subsidiary or is waived by the specified percentage of holders of
such Indebtedness entitled to so waive, then this Event of Default
under this Indenture by reason of such default, failure or other event
shall be deemed to have been cured; or
(c) any representation or warranty made by the Company in or
pursuant to the Note Agreement shall be false in any material respect
on the date as of which made; or
(d) the Company fails to perform or observe (i) any covenant
contained in Section 4.15 through Section 4.19 or (ii) its covenant
contained in paragraph 5 of the Note Agreement to obtain the prior
approval of certain holders of the Notes to any instrument equally and
ratably securing the Notes and any other indebtedness of the Company
under the circumstances described in the initial paragraph of Section
4.07, but if any such failure under the Note Agreement is cured by the
Company or is waived by the specified percentage of Holders of the
Notes entitled to so waive thereunder, then this Event of Default
under this Indenture by reason of such failure shall be deemed to have
been cured; or
(e) the Company fails to perform or observe any other
covenant or agreement contained in Section 4.13 or 4.14 or in the Note
Agreement and such failure shall not be remedied within 30 days after
any Executive Officer obtains actual knowledge thereof, but if any
such failure under the Note Agreement is cured by the Company or is
waived by the specified percentage of Holders of the Notes entitled to
so waive thereunder, then this Event of Default under this Indenture
by reason of such failure shall be deemed to have been cured; or
(f) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of any Material
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging any Material Subsidiary
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of any Material Subsidiary under any applicable Federal or
State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of any Material
Subsidiary or of any substantial part of its property, or ordering the
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<PAGE> 10
winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 90 consecutive days; or
(g) the commencement by any Material Subsidiary of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of any Material Subsidiary in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of any Material Subsidiary or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by any Material Subsidiary in furtherance of any
such action; or
(h) a final judgment in an amount in excess of $50,000,000 is
rendered against the Company or any Material Subsidiary and, within 30
days after entry thereof, such judgment is not discharged or execution
thereof stayed pending appeal, or within 30 days after the expiration
of any such stay, such judgment is not discharged.
ARTICLE 2
THE NOTES
Section 2.1 FORM AND TERMS. In lieu of any form set forth in Sections
11.02 and 11.03 of the Original Indenture, the Notes shall be in the form of
Exhibit A hereto. The terms of the Notes set forth in Exhibit A shall be part
of the terms and provisions of this Second Supplemental Indenture as fully as
if set forth herein.
Section 2.2 DENOMINATIONS. The Notes shall be issuable in registered
form without coupons in denominations of $100,000 and any integral multiple
thereof, except as such amounts may be adjusted following a partial redemption
and related selections of the Notes pursuant to Section 2.3 of this Second
Supplemental Indenture.
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<PAGE> 11
Section 2.3 SELECTION OF SECURITIES FOR PARTIAL REDEMPTION. If less
than all the Notes are to be redeemed pursuant to either Article Three or
Twelve of the Indenture, then, in lieu of the selection procedures described in
the initial paragraph of Section 3.03 of the Indenture, the Trustee shall
select for redemption not more than 45 days prior to the Redemption Date an
equal proportion of the respective principal amounts of each of the Outstanding
Notes (including, for purposes of this provision only, any Notes owned by the
Company or any other obligor upon the Notes or any Affiliate of the Company or
of such other obligor that have been purchased or otherwise acquired by it
other than by redemption pursuant to such Article Three or Twelve).
ARTICLE 3
REPRESENTATIONS OF THE COMPANY
Section 3.1 AUTHORITY OF THE COMPANY. The Company is duly authorized
to execute and deliver this Second Supplemental Indenture, and all corporate
action on its part required for the execution and delivery of this Second
Supplemental Indenture has been duly and effectively taken.
Section 3.2 TRUTH OF RECITALS AND STATEMENTS. The Company warrants
that the recitals of fact and statements contained in this Second Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.
ARTICLE 4
CONCERNING THE TRUSTEE
Section 4.1 ACCEPTANCE OF TRUSTS. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and
conditions set forth in the Original Indenture and in this Second Supplemental
Indenture, to all of which the Company and the respective Holders of the Notes
at any time hereafter outstanding agree by their acceptance thereof.
Section 4.2 NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC. The
recitals and statements contained in this Second Supplemental Indenture shall
be taken as the recitals and statements of the Company, and the Trustee assumes
no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Second Supplemental
Indenture, except that the Trustee is duly authorized to execute and deliver
this Second Supplemental Indenture.
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<PAGE> 12
ARTICLE 5
MISCELLANEOUS PROVISIONS
Section 5.1 RELATION TO THE INDENTURE. The provisions of this Second
Supplemental Indenture shall become effective immediately upon the execution
and delivery hereof. This Second Supplemental Indenture and all the terms and
provisions herein contained shall form a part of the Indenture as fully and
with the same effect as if all such terms and provisions had been set forth in
the Original Indenture; provided, however, such terms and provisions shall be
so included in the Indenture solely for the benefit of the Holders of the
Notes. The Original Indenture is hereby ratified and confirmed and shall remain
and continue in full force and effect in accordance with the terms and
provisions thereof, as supplemented by this Second Supplemental Indenture, and
the Original Indenture and this Second Supplemental Indenture shall be read,
taken and construed together as one instrument.
Section 5.2 MEANING OF TERMS. Any term used in this Second
Supplemental Indenture which is defined in the Original Indenture shall have
the meaning specified in the Original Indenture, unless the context shall
otherwise require.
Section 5.3 COUNTERPARTS OF SECOND SUPPLEMENTAL INDENTURE. This Second
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instruments.
Section 5.4 GOVERNING LAW. This Second Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.
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<PAGE> 13
IN WITNESS WHEREOF, K N Energy, Inc. has caused this Second
Supplemental Indenture to be executed in its corporate name by one of its Vice
Presidents and Continental Bank, National Association, has caused this Second
Supplemental Indenture to be executed in its corporate name by one of its Vice
Presidents or Trust Officers, all as of the date first above written.
K N ENERGY, INC.
By: /s/ E. Wayne Lundhagen
-----------------------------------------
E. Wayne Lundhagen
Vice President -- Finance & Accounting
CONTINENTAL BANK, NATIONAL
ASSOCIATION, Trustee
By: /s/ A. H. Lenters
----------------------------------------
A. H. Lenters
Vice President
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<PAGE> 1
EXHIBIT 10(d)
K N ENERGY, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
<PAGE> 2
K N ENERGY, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Section Page
------- ------- ----
<S> <C> <C> <C>
I Purpose and Effective Date . . . . . . . . . . . . . . . . . . . . . 1
1.01 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II Definitions and Construction of the Plan Document . . . . . . . . . . 1
2.01 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.02 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.03 Bookkeeping Account . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.04 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.05 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.06 Deferral Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.07 Deferred Compensation . . . . . . . . . . . . . . . . . . . . . . . . 1
2.08 Election Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.09 Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.10 Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.11 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.12 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.13 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.14 Termination of Service . . . . . . . . . . . . . . . . . . . . . . . 2
2.15 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.16 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.17 Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
III Eligibility and Participation . . . . . . . . . . . . . . . . . . . . 2
3.01 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.02 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
IV Deferral of Compensation . . . . . . . . . . . . . . . . . . . . . . 3
4.01 Salary Deferral . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.02 Incentive Compensation Deferral . . . . . . . . . . . . . . . . . . . 3
4.03 Deferral Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.04 No Deferral Without Agreement . . . . . . . . . . . . . . . . . . . . 3
4.05 Duration of Deferral Agreement . . . . . . . . . . . . . . . . . . . 3
V Deferral Account and Crediting . . . . . . . . . . . . . . . . . . . 3
5.01 Bookkeeping Account . . . . . . . . . . . . . . . . . . . . . . . . . 3
5.02 Account Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5.03 Transfer Among Funds . . . . . . . . . . . . . . . . . . . . . . . . 4
5.04 Statement of Account . . . . . . . . . . . . . . . . . . . . . . . . 4
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
VI Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.01 Distribution of Account Balance . . . . . . . . . . . . . . . . . . . 4
6.02 Death Before Distribution of Account . . . . . . . . . . . . . . . . 5
6.03 Form of Distribution . . . . . . . . . . . . . . . . . . . . . . . . 5
VII Hardship Distributions . . . . . . . . . . . . . . . . . . . . . . . 5
7.01 Hardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
VIII Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
8.01 Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . . 5
8.02 Proper Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . 5
8.03 Minor or Incompetent Beneficiary . . . . . . . . . . . . . . . . . . 5
IX Administration of the Plan . . . . . . . . . . . . . . . . . . . . . 6
9.01 Majority Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
9.02 Finality of Determination . . . . . . . . . . . . . . . . . . . . . . 6
9.03 Certificates and Reports . . . . . . . . . . . . . . . . . . . . . . 6
9.04 Indemnification and Exculpation . . . . . . . . . . . . . . . . . . . 6
9.05 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
X Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 6
10.01 Written Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
10.02 Denied Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10.03 Review Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10.04 Committee Review . . . . . . . . . . . . . . . . . . . . . . . . . . 7
XI Nature of Company's Obligation . . . . . . . . . . . . . . . . . . . 7
11.01 Company's Obligation . . . . . . . . . . . . . . . . . . . . . . . . 7
11.02 Creditor Status . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
XII Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
12.01 Written Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
12.02 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . 8
12.03 Merger, Consolidation or Acquisition . . . . . . . . . . . . . . . . 8
12.04 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . 8
12.05 Amendment and Termination . . . . . . . . . . . . . . . . . . . . . . 8
12.06 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
12.07 Nontransferability . . . . . . . . . . . . . . . . . . . . . . . . . 8
12.08 Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
12.09 Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
12.10 Acceleration of Payment . . . . . . . . . . . . . . . . . . . . . . . 8
12.11 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 4
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.01 Title This Plan shall be known as the K N Energy, Inc. Nonqualified
Deferred Compensation Plan (hereinafter referred to as the "Plan").
1.02 Purpose The purpose of the Plan is to permit certain members of management
and highly compensated employees to defer current salary and incentive
compensation.
1.03 Effective Date The Effective Date of this Plan shall be January 1, 1995.
ARTICLE II
DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT
2.01 Beneficiary "Beneficiary" shall mean the person or persons or the estate of
a Participant entitled to receive any benefits under this Plan in the event of
the Participant's death prior to distribution of his account value.
2.02 Board "Board" shall mean the Board of Directors of K N Energy, Inc.
2.03 Bookkeeping Account A "Bookkeeping Account" will be established only as a
bookkeeping record for each Participant who elects to defer compensation under
this Plan and may, at the discretion of the Committee, include one (1) or more
subaccounts to reflect amounts credited to a Participant under the various terms
of this Plan.
2.04 Committee "Committee" means the Compensation Committee of the Company who
will manage and administer the Plan.
2.05 Company "Company" shall mean K N Energy, Inc., a Delaware corporation.
2.06 Deferral Agreement "Deferral Agreement" means the written form which is
submitted to the Named Fiduciary before the relevant Election Date which
indicates whether the Executive wishes to defer a portion of his compensation
and indicates the portion of salary and/or incentive pay to be deferred. No
Deferral Agreement shall be effective until acknowledged, in writing, by the
Company.
2.07 Deferred Compensation "Deferred Compensation" means the portion of a
Participant's salary for any calendar year and the portion of a Participant's
incentive compensation for any calendar year that has been deferred pursuant to
the Plan.
2.08 Election Date The "Election Date" is the date established by this Plan as
the date before which an Executive must submit a valid Deferral Agreement to the
Committee. The applicable Election Dates are as follows: (a) thirty (30) days
after a newly eligible employee is notified of his right to participate in the
Plan; or (b) December 31 of any calendar year if (a) above does not apply.
<PAGE> 5
2.09 EXECUTIVE "Executive" shall mean any executive who participates in the K N
Energy, Inc. Executive Incentive Plan or any other member of management or any
highly compensated employee who has been recommended for participation in the
Plan by the Chief Executive Officer of the Company and approved by the
Committee.
2.10 NAMED FIDUCIARY "Named Fiduciary," for purposes of the claims procedure of
this Plan, shall mean the Chairman of the Committee.
2.11 PARTICIPANT "Participant" means an Executive who has deferred a portion of
salary or a portion of incentive compensation pursuant to the terms of this Plan
and whose account balance has not yet been distributed.
2.12 PLAN "Plan" means the K N Energy, Inc. Nonqualified Deferred Compensation
Plan as described in this instrument and as amended from time to time.
2.13 PLAN YEAR The "Plan Year" is the same as the calendar year.
2.14 TERMINATION OF SERVICE "Termination of Service" or similar expression means
the termination of the Participant's employment as a regular employee of the
Company and any division, subsidiary or affiliate thereof.
2.15 VALUATION DATE "Valuation Date" shall mean the last day of each calendar
quarter. By appropriate action, the Committee may provide for Valuation Dates at
such other times as it deems necessary or expedient.
2.16 GENDER AND NUMBER Wherever the context so requires, masculine pronouns
include the feminine and singular words shall include the plural.
2.17 TITLES Titles of the Articles of this Plan are included for ease of
reference only and are not to be used for the purpose of construing any portion
or provision of this Plan document.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.01 ELIGIBILITY Any Executive who participates in the K N Energy, Inc.
Executive Incentive Plan shall be eligible to participate in this Plan.
Additional eligibility for participation in this Plan shall be determined on an
individual basis by recommendation from the Chief Executive Officer and approval
by the Committee, but no Executive shall be selected for participation in this
Plan unless he qualifies as a member of a select group of management or as a
highly compensated employee of the Company.
3.02 PARTICIPATION An Executive, after having been selected for participation by
the Committee, shall, as a condition to participation, annually complete and
return to the Committee a duly executed Deferral Agreement.
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<PAGE> 6
ARTICLE IV
DEFERRAL OF COMPENSATION
4.01 SALARY DEFERRAL Each Participant in the Plan may elect to have either a
percentage or dollar amount of his salary deferred in accordance with the terms
and conditions of this Plan. Any election to defer salary must be for a minimum
of $5,000 but no more than 20% (twenty percent) of base salary.
4.02 INCENTIVE COMPENSATION DEFERRAL Each Participant in the Plan may elect to
have either a percentage or dollar amount of his incentive compensation earned,
if any, during the Plan Year deferred in accordance with the terms and
conditions of this Plan. Any election to defer incentive compensation must be
for a minimum of $5,000 but no more than 85% of the incentive compensation
earned for such Plan Year.
4.03 DEFERRAL AGREEMENT An eligible Executive electing to participate in the
Plan must submit his written Deferral Agreement to the Named Fiduciary on or
before the applicable Election Date. Valid Deferral Agreements filed by the
applicable Election Date as provided in Section 2.08(a) shall cause compensation
to be deferred in the Plan Year for which such Deferral Agreement is made.
Deferral Agreements entered into under the conditions of Section 2.08(b) shall
cause elected compensation to be deferred beginning January 1 of the next
calendar year and elected incentive compensation to be deferred as of the time
it otherwise would have been paid under the terms of the Incentive Plan.
4.04 NO DEFERRAL WITHOUT AGREEMENT A Participant who has not submitted a valid
Deferral Agreement to the Named Fiduciary before the relevant Election Date may
not defer any compensation under this Plan for the applicable Plan Year.
4.05 DURATION OF DEFERRAL AGREEMENT Deferral Agreements remain in effect for the
Plan Year for which they apply. A Participant must file a new Deferral Agreement
for any subsequent Plan Year. The terms of any Deferral Agreement may, but need
not be, similar to the terms of any prior Deferral Agreement.
ARTICLE V
DEFERRAL ACCOUNT AND CREDITING
5.01 BOOKKEEPING ACCOUNT Salary and incentive compensation deferred by a
Participant under a written Deferral Agreement shall be credited in a dollar
amount to a separate Bookkeeping Account for each Participant. Salary deferred
under subsequent written election agreements by a Participant shall be added to
his Bookkeeping Account. The Company shall create as many subaccounts as it
deems necessary to administer the terms of this Plan.
5.02 ACCOUNT VALUATION The value of the Bookkeeping Account and any subaccounts
shall be based upon the performance of selected funds in which deferrals have
been directed at the election of the Participant. The funds into which the
Participant may elect that his deferrals will be credited will be based upon the
funds and investment options available to employees
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<PAGE> 7
participating in the K N Energy, Inc. 401(k) Retirement Savings Plan, as amended
from time to time. Notwithstanding, the Company reserves the right to amend and
to determine, in its sole discretion, the funds into which deferrals will be
credited. Deferred amounts will be credited into subaccount funds in multiples
of the total amounts deferred as elected by the Participants. All dividends and
earnings paid with respect to an elected fund will be deemed to have been
immediately reinvested in such fund.
5.03 TRANSFER AMONG FUNDS Amounts deferred into this Plan and credited to a fund
within the Participant's Bookkeeping Account or subaccounts may be transferred
between eligible funds pursuant to an election which may be made once per
calendar quarter. Such election shall be effective, and the transfer shall be
based on the value of the Participant's Bookkeeping Account or subaccount with
respect to that fund as of the Valuation Date immediately following the date the
election is received by the Company, provided, that the election is received no
later than the Valuation Date.
5.04 STATEMENT OF ACCOUNT The Company shall provide periodically to each
Participant (but not less frequently than once each calendar year) a statement
setting forth the balances and funds to the Participant's credit.
ARTICLE VI
DISTRIBUTION
6.01 DISTRIBUTION OF ACCOUNT BALANCE Distribution of the value of a
Participant's Bookkeeping Account balance shall be made according to the
election of the Participant set forth in the Deferral Agreement and the terms of
this Plan, as described in (a), (b) or (c) below.
(a) If the Participant remains employed until a specified deferral
year, all amounts relating to that Plan Year's deferral will be
paid in a lump sum, less applicable withholding taxes, in the
January of the deferral year elected. Any deferral to a year
certain must be at least five years following the year of
deferral.
(b) In the event of Termination of Services for any reason before
completion of the elected deferral period, payment shall be made
in a lump sum, less applicable withholding taxes, as soon as
practicable after the end of the quarter in which the Termination
of Services occurred.
(c) In the event of Retirement, payment shall be made either (i) in a
lump sum, less applicable withholding taxes, as soon as
practicable after the quarter in which the retirement occurs, or
(ii) in annual cash installments in the five (5) or ten (10)
successive calendar years (as selected by the Participant)
beginning as soon as practicable after Retirement. Each
installment shall be made as of the first working day of the
applicable year. The amount of each installment shall equal the
Participant's Bookkeeping Account divided by the number of
remaining installments (including the installment being
determined).
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6.02 DEATH BEFORE DISTRIBUTION OF ACCOUNT In the event of the Participant's
death prior to the complete distribution of his Bookkeeping Account, payment of
any remaining balance shall be made to the Participant's Beneficiary as soon as
practicable after notification of the Participant's death.
6.03 FORM OF DISTRIBUTION All distributions of a Participant's Bookkeeping
Account shall be made in cash only.
ARTICLE VII
HARDSHIP DISTRIBUTIONS
7.01 HARDSHIP At the request of a Participant before or after the Participant's
retirement or Termination of Service, or at the request of any of the
Participant's Beneficiaries after the Participant's death, the Committee may, in
its sole discretion, accelerate and pay all or part of the value of a
Participant's Bookkeeping Account due under this Plan. Accelerated distributions
at the request of the Participant or the Participant's Beneficiaries may be
allowed only due to an immediate and heavy financial need of the Participant (or
Beneficiary). An accelerated distribution must be limited to only that amount
necessary to relieve the financial need.
ARTICLE VIII
BENEFICIARY
8.01 BENEFICIARY DESIGNATION A Participant shall designate his Beneficiary to
receive benefits under the Plan by completing the Beneficiary Designation
accompanying the Deferral Agreement. If more than one (1) Beneficiary is named,
the shares and/or percentage of each Beneficiary is named, the shares and/or
percentage of each Beneficiary shall be indicated. A Participant shall have the
right to change the Beneficiary by submitting to the Committee a Change of
Beneficiary Form. However, no change of Beneficiary shall be effective until
acknowledged, in writing, by the Committee.
8.02 PROPER BENEFICIARY If the Company has any doubt as to the proper
Beneficiary to receive payments hereunder, the Company shall have the right to
withhold such payments until the matter is finally adjudicated. However, any
payment made by the Company, in good faith and in accordance with this Plan,
shall fully discharge the Company from all further obligations with respect to
that payment.
8.03 MINOR OR INCOMPETENT BENEFICIARY In making any payments to or for the
benefit of any minor or an incompetent Beneficiary, the Committee, in its sole
and absolute discretion, may make a distribution to a legal or natural guardian
or other relative of a minor or court appointed committee of such incompetent.
Or, it may make a payment to any adult with whom the minor or incompetent
temporarily or permanently resides. The receipt by a guardian, committee,
relative or other person shall be a complete discharge to the Company. Neither
the Committee nor the Company shall have any responsibility to see to the proper
application of any payments so made.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
9.01 MAJORITY VOTE All resolutions or other actions taken by the Committee shall
be by vote of a majority of those present at a meeting at which a majority of
the members are present, or in writing by all the members, at the time in
office, if they act without a meeting.
9.02 FINALITY OF DETERMINATION Subject to the Plan, the Committee shall, from
time to time, establish rules, forms and procedures for the administration of
the Plan. Except as herein otherwise expressly provided, the Committee shall
have the sole and absolute discretion to (a) construe and interpret the Plan,
(b) decide all questions of eligibility to participate in the Plan, and (c)
determine the amount, manner and time of payment of any benefits to any
Participant or Beneficiary. The decisions, actions and records of the Committee
shall be conclusive and binding upon the Company and all persons having or
claiming to have any right or interest in or under the Plan.
9.03 CERTIFICATES AND REPORTS The members of the Committee and the officers and
directors of the Company shall be entitled to rely on all certificates and
reports made by any duly appointed accountants, and on all opinions given by any
duly appointed legal counsel, which legal counsel may be counsel for the
Company.
9.04 INDEMNIFICATION AND EXCULPATION The Company shall indemnify and hold
harmless each member of the Committee against any and all expenses and
liabilities arising out of his membership on the Committee. Expenses against
which a member of the Committee shall be indemnified hereunder shall include,
without limitation, the amount of any settlement or judgment, costs, counsel
fees, and related charges reasonably incurred in connection with a claim
asserted, or a proceeding brought or settlement thereof. The foregoing rights of
indemnification shall be in addition to any other rights to which the any such
member of the committee may be entitled as a matter of law.
9.05 EXPENSES The expenses of administering the Plan shall be borne by the
Company.
ARTICLE X
CLAIMS PROCEDURE
10.01 WRITTEN CLAIM Benefits shall be paid in accordance with the provisions of
this Plan. The Participant, or a designated recipient or any other person
claiming through the Participant, shall make a written request for benefits
under this Plan. This written claim shall be mailed or delivered to the Named
Fiduciary. Such claim shall be reviewed by the Named Fiduciary or his delegate.
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10.02 DENIED CLAIM If the claim is denied, in full or in part, the Named
Fiduciary shall provide a written notice within ninety (90) days setting forth
the specific reasons for denial and any additional material or information
necessary to perfect the claim and an explanation of why such material or
information is necessary and appropriate information and explanation of the
steps to be taken if a review of the denial is desired.
10.03 REVIEW PROCEDURE If the claim is denied and a review is desired, the
Participant (or Beneficiary) shall notify the Named Fiduciary, in writing,
within sixty (60) days (a claim shall be deemed denied if the Named Fiduciary
does not take any action within the aforesaid ninety (90) day period) after
receipt of the written notice of denial. In requesting a review, the Participant
or his Beneficiary may request a review of the Plan document or other pertinent
documents with regard to the employee benefit plan created under this agreement,
may submit any written issues and comments, may request an extension of time for
such written submission of issues and comments and may request that a hearing be
held, but the decision to hold a hearing shall be within the sole discretion of
the Committee.
10.04 COMMITTEE REVIEW The decision on the review of the denied claim shall be
rendered by the Committee within sixty (60) days after the receipt of the
request for review (if no hearing is held) or within sixty (60) days after the
hearing if one is held. The decision shall be written and shall state the
specific reasons for the decision including reference to the specific provisions
of this Plan on which the decision is based.
ARTICLE XI
NATURE OF COMPANY'S OBLIGATION
11.01 COMPANY'S OBLIGATION The Company's obligations under this Plan shall be an
unfunded and unsecured promise to pay. The Company shall not be obligated under
any circumstances to fund its financial obligations under this Plan. However,
the Company may choose to establish an irrevocable trust to settle its
obligations under this Plan. The assets of such trust, if any, shall be subject
to the claims of the Company's creditors as set forth in Section 11.02 below.
11.02 CREDITOR STATUS Any assets which the Company may acquire or set aside to
help cover its financial liabilities are, and must, remain general assets of the
Company subject to the claims of its creditors. Neither the Company nor this
Plan gives the Participant any beneficial ownership interest in any asset of the
Company. All rights of ownership in any such assets are, and remain, in the
Company.
ARTICLE XII
MISCELLANEOUS
12.01 WRITTEN NOTICE Any notice which shall or may be given under this Plan or a
Deferral Agreement shall be in writing and shall be mailed by United States
mail, postage prepaid. If notice is to be given to the Company, such notice
shall be addressed to the
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Company at 12055 West Second Place, Lakewood, Colorado 80228-9304 or, if notice
is to an Executive, addressed to the address shown on such Executive's Deferral
Agreement.
12.02 CHANGE OF ADDRESS Any party may, from time to time, change the address to
which notices shall be mailed by giving written notice of such new address.
12.03 MERGER, CONSOLIDATION OR ACQUISITION The Plan shall be binding upon the
Company, its assigns, and any successor company which shall succeed to
substantially all of its assets and business through merger, acquisition or
consolidation, and upon an Executive, his Beneficiary, assigns, heirs, executors
and administrators.
12.04 CHANGE IN CONTROL In the event of a "change in control" of the Company, as
defined in the K N Energy, Inc. Long- Term Executive Incentive Plan, all amounts
credited to the Participant's Bookkeeping Account, as of the effective date of
the change in control, will be distributed in a lump sum within 30 days of such
change in control, less applicable withholding taxes.
12.05 AMENDMENT AND TERMINATION The Company retains the sole and unilateral
right to terminate, amend, modify or supplement this Plan, in whole or in part,
at any time. This right includes the right to make retroactive amendments.
However, no Company action under this right shall reduce the Bookkeeping Account
of any Participant or his Beneficiary as of the date of amendment or
termination.
12.06 EMPLOYMENT This Plan does not provide a contract of employment between the
Company and the Participant, and the Company reserves the right to terminate the
Participant's employment, for any reason, at any time, notwithstanding the
existence of this Plan.
12.07 NONTRANSFERABILITY Except insofar as prohibited by applicable law, no
sale, transfer, alienation, assignment, pledge, collateralization or attachment
of any benefits under this Plan shall be valid or recognized by the Company.
Neither the Participant, his spouse, or designated Beneficiary, shall have any
power to hypothecate, mortgage, commute, modify or otherwise encumber in advance
of any of the benefits payable hereunder, nor shall any of said benefits be
subject to seizure for the payment of any debts, judgments, alimony maintenance,
owed by the Participant or his Beneficiary, or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise.
12.08 LEGAL FEES All reasonable legal fees incurred by any Participant (or
former Participant) to successfully enforce his valid rights under this Plan
shall be paid by the Company in addition to sums due under this Plan.
12.09 TAX WITHHOLDING The Company may withhold from a payment any federal, state
or local taxes required by law to be withheld with respect to such payment and
such sum as the Company may reasonably estimate as necessary to cover any taxes
for which the Company may be liable and which may be assessed with regard to
such payment. The Company may either withhold from current salary and/or
incentive compensation that has not been deferred or make other necessary
arrangements with a Participant with respect to any FICA and Medicare taxes
required.
12.10 ACCELERATION OF PAYMENT The Company reserves the right to accelerate the
payment of any benefits payable under this Plan at any time without the consent
of the Participant, his estate, his Beneficiary or any other person claiming
through the Participant.
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12.11 APPLICABLE LAW This Plan shall be governed by the laws of the state of
Colorado.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer on this _____ day of __________________, 1994.
K N ENERGY, INC.
By
--------------------------------------
Chief Executive Officer
ATTEST:
By:
-----------------------
[SEAL]
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EXHIBIT 10(h)
CONFIDENTIAL AGREEMENT AND GENERAL RELEASE
THIS CONFIDENTIAL AGREEMENT AND GENERAL RELEASE (this "Agreement") is
entered into by and between Larry D. Hall ("Hall") and KN Energy, Inc. ("KN"), a
Kansas corporation headquartered in Lakewood, Colorado, because of the mutual
agreement of KN and Hall that Hall to cease employment with KN.
WHEREAS, the parties wish to settle and discharge all potential claims
and disputes between them, known or unknown;
NOW, THEREFORE, in consideration of the foregoing premises and the
following promises, which the parties agree constitute good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows.
1. EFFECT OF THIS AGREEMENT. This Agreement shall supersede in all
respects all letters, agreements or promises including but not limited to the
Change of Control Severance Agreement dated as of October 19, 1996 and amended
October 20, 1997 between KN and Hall, and once effective shall be the only
agreement between KN and Hall relating to Hall's employment by KN and/or the
cessation of that employment.
2. DEFINITIONS.
(a) Confidential Information. The term Confidential Information shall
include all non-public or proprietary information relating to (i) KN's
customers, prospective customers, providers, suppliers, and other business
affiliates; (ii) KN's policies, practices, operating information, financial
information, business plans, and market approaches; and (iii) other information,
techniques or approaches used by KN and not generally known in KN's industry. KN
believes that some or all of this information constitutes trade secrets;
however, the "Confidential Information" covered by this Agreement need not
satisfy the legal definition or requirements of a "trade secret" to be protected
from disclosure thereunder. Information shall not be Confidential if it is in
the public domain at the time this Agreement is entered into or is thereafter
communicated free of any obligation of confidence by KN to any other person or
entity.
(b) Effective Date of Termination of Active Employment. Hall's last day
of active employment was July 8, 1999.
(c) Effective Date of This Agreement. The "Effective Date of This
Agreement" shall be the day of Hall's written acceptance of this Agreement
excluding the Age Discrimination Provisions.
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(d) Age Discrimination Provisions and Effective Date of Age
Discrimination Provisions. The "Effective Date of Age Discrimination Provisions"
shall be the eighth day following Hall's written acceptance of the Age
Discrimination Provisions without revocation. Age Discrimination Provisions
include the age discrimination amount, age discrimination release, and Older
Worker Benefit Protection Act acknowledgement.
(e) Effective Date of Termination of Employment. The effective date of
termination of Hall's employment was September 10, 1999 except as set forth in
paragraphs 3(c-e) of this Agreement. KN's employment records will state Hall
resigned.
(f) KN. "KN" means collectively KN Energy, Inc. a Kansas corporation,
and its divisions and affiliates or the successors to any such entities. For
purposes of this Agreement, the term "affiliates" shall have the same definition
as the term "affiliated group" in Section 1504(a) of the Internal Revenue Code
of 1986, as amended from time to time.
3. KN'S PROMISES. In consideration of Hall's promises recited herein:
(a) Severance Amount. KN agrees to pay Hall or his heirs a gross amount
of $1,468,661.41 (One Million Four Hundred Sixty-Eight Thousand Six Hundred
Sixty-One Dollars and Forty-One Cents). Payments will be made in fifty-eight
equal installments on regular KN paydays beginning with the first pay period
after the Effective Date of this Agreement.
(b) Age Discrimination Amount. KN agrees to pay Hall or his heirs a
gross amount equal to $500,000 (Five Hundred Thousand Dollars). Payments will
begin on regular KN paydays beginning with the first pay period after the
payments required by paragraph 3(a) above and will be made in twenty equal
installments. Hall agrees that he is not otherwise entitled to this money under
any agreement with KN or policy or practice of KN.
(c) Health Insurance Benefits, Bridge to Early Retirement and Unpaid
Leave.
(i) KN will continue Hall's present medical, dental, life
insurance, and accidental death and dismemberment at the same coverage level and
rate as is available to current employees of KN or its successor through
November 8, 2000 when Hall will be eligible for COBRA, unless a triggering event
has previously occurred, or retiree medical benefits. The coverage shall be for
Hall and his spouse and dependent child. Hall will be considered to be on an
unpaid leave of absence through November 8, 2000, for the purpose of bridging
him to early retirement, which includes service credit under KN's qualified
retirement plan and Nonqualified Retirement Income Restoration Plan, and the
ability to file an Election Form under the Directors and Executives Deferred
Compensation Plan but not to make any additional contributions to that Plan,
with the understanding and agreement that he is being reinstated to KN's
personnel systems solely for purposes of exercising rights to the benefits
described above, including those benefits accruing to a qualified retiree, and
is not considered a KN employee for any other purpose and may not represent
himself to be an employee of KN or in any other way associated with KN during
such leave, and with the
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further understanding that he shall not be entitled to any other benefits other
than those described in this paragraph.
(ii) KN will also pay to a health care insurer designated by
Hall an amount not to exceed Fifty Thousand Dollars. This payment shall not be
required until after Hall ceases to be eligible for KN's group medical program.
(d) Profit Sharing, Retirement Plans, 401(k), Deferred Compensation and
Employee Stock Purchase Program (ESPP). Hall will not be eligible to continue to
participate in the KN savings, deferred compensation except as provided in
paragraph 3(c)(i) above, stock purchase, or retirement plans except as provided
in paragraph 3(c)(i) above after August 29, 1999. KN acknowledges Hall is
entitled to payment of Seventeen Thousand Three Hundred Seven Dollars and Fifty
Four Cents ($17,307.54) which he has deposited in the Employee Stock Purchase
Program subject to the terms of the ESPP. This Agreement does not affect any
rights under these Plans.
If Hall, on or before October 15, 1999, files an Election Form which
changes his December 10, 1998 Election Form under the Directors and Executives
Deferred Compensation Plan for the Plan year beginning January 1, 2000, KN will
use its best efforts to secure approval from the Committee pursuant to Article
5.2 of the Plan.
(e) Restricted Stock and Stock Options.
(i) Restrictions on Restricted Stock awarded to Hall during
his employment with KN including, if necessary, stock placed in a Directors and
Executives Deferred Compensation Plan shall lapse on the fifth day after the
Effective Date of his Agreement. All rights of such Restricted Stock shall
immediately be awarded to Hall. Hall shall be solely responsible for any taxes
or other expenses resulting from this acceleration, and hereby indemnifies and
holds KN harmless for any such taxes or expenses.
(ii) All stock options awarded to Hall during his employment
with KN which are not vested as of August 29, 1999 shall terminate. Hall shall
have three months from August 29, 1999 to exercise any options vested as of that
date. To the extent Hall does not exercise any of such vested stock options
within the three-month period, such options shall be forfeited.
(f) Non-Disparagement. For a period of two years from the Effective
Date of this Agreement, KN agrees that no one from its Board of Directors or its
executive officer group shall disparage Hall, but KN expressly undertakes no
obligation and refuses to be responsible for actions of employees at any level
below its executive officer group that might be construed to be disparagement of
Hall.
(g) Director and Officer Insurance. KN will provide director and
officer liability coverage to Hall on the same terms as it provides to other
director or officers who served during 1999. Hall shall also have the same
rights to indemnification and defense as other
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directors or officers who served during 1999. Hall's coverage will terminate
after the same period used to determine termination of coverage for other former
directors and officers.
(h) Financial Planning Expenses. KN will pay an invoice it received in
September 1999 in the amount of $7,500 (Seven Thousand Five Hundred Dollars) for
financial planning advice. KN will pay an additional $3,500 (Three Thousand Five
Hundred Dollars) for financial planning advice provided invoices are received
prior to January 31, 2000. Invoices should be submitted to James E. Street, Sr.
V.P. Human Resources and Administration, Kinder-Morgan Energy Partners, L.P.,
1301 McKinney Street, Suite 3400, Houston, TX 77010.
(i) Office and Secretarial Assistance. KN will pay a provider selected
by Hall a monthly amount not to exceed $1,200 (One Thousand Two Hundred Dollars)
commencing the first month after the Effective Date of This Agreement and
continuing to November 8, 2000.
(j) Vacation Pay. Within five business days after the Effective Date of
This Agreement, KN will pay Hall for his accrued vacation (192 hours).
(k) Release. KN, its successors and assigns, release Hall from all
claims, demands, and actions of any nature, known or unknown which arose on or
prior to the Effective Date of This Agreement provided the representation by
Hall in paragraph 4(h) below is true. KN has no present knowledge that Hall's
representation is not true.
4. HALL'S PROMISES. In consideration of KN's promises recited herein:
(a) Confidential Information. Hall shall not, for a period of two years
from the Effective Date of This Agreement, directly or indirectly, (i) use or
apply any Confidential Information, alone or with any other person or entity; or
(ii) disclose or provide any Confidential Information to any person or entity
not authorized by KN to receive such Confidential Information.
(b) Warranty of Non-Removal of Confidential Information or Trade Secret
Material and Information. Hall specifically warrants that, other than copies of
information used in connection with his performance of his duties as CEO during
his active employment with KN where KN has originals, he has not removed and
will not remove from KN's premises, either directly or indirectly, any drawings,
writings, prints, computer disks, documents or anything containing, embodying or
disclosing any Confidential Information or proprietary information or any of
KN's trade secrets. Any future removals require KN's express written permission
by a member of KN's executive management. For purposes of this Agreement, the
term trade secrets means any materials within the meaning of the Uniform Trade
Secrets Act, C.R.S. Section 7-74-101 et seq.
(c) Release. Hall for himself and his representatives, heirs, and
assigns, hereby releases and discharges KN, any parent, sister or subsidiary
company, and any present or former shareholders, officers, directors, employees,
agents, representatives, legal
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representatives, accountants, successors, and assigns, Kinder-Morgan Inc., and
any parent, sister or subsidiary company, and any present or former
shareholders, officers, directors, employees, agents, representatives, legal
representatives, accountants, successors and assigns, Richard Kinder, and
William Morgan, from all claims, demands, and actions of any nature, known or
unknown, and specifically, but not limited to, those in any manner arising out
of or involving any aspect of his employment with KN and his termination of
employment, and including any rights or claims under the Colorado
Anti-Discrimination Act; the Civil Rights Act of 1964, as amended, 42 U.S.C.,
Section 2000e, et seq.; the Vocational Rehabilitation Act, 29 U.S.C. Section 701
et seq.; the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq.;
Executive Order 11246; the Civil Rights Act of 1871, 42 U.S.C. Section 1981; the
National Labor Relations Act, as amended, 29 U.S.C. Section 141 et seq.; the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101-2109;
and any and all other municipal, state, and/or federal statutory, executive
order, or constitutional provisions pertaining to an employment relationship;
provided, however, that this release and waiver shall not apply to any rights
which, by law, may not be waived or to rights and claims that arise after the
date of his execution of this Agreement. This release and waiver also
specifically includes, but is not limited to, any claims in the nature of tort
or contract claims, including specifically but not limited to any claim of
wrongful discharge, intentional or negligent infliction of emotional distress,
defamation, or other such claims in any manner arising out of or involving any
aspect of Hall's employment with KN and termination of his employment. This
release includes any and all claims concerning attorney fees, costs, and any and
all other expenses related to the claims released herein. This release does not
include claims for breach of this Agreement, indemnification, coverage or
defense under any applicable directors and officers insurance policy or vested
employee benefits.
(d) Age Discrimination Release. Hall releases KN and all persons
released in paragraph 4(c) above from any claims under the federal Age
Discrimination in Employment Act, 29 U.S.C. Section 621, et seq.
(e) Covenant Not to Sue. Hall warrants that he has not commenced and
agrees not to commence any proceeding against KN or any person released in
paragraph 4(c) above, whether administrative or judicial, asserting any claim
arising out of his employment or the termination thereof, except to specifically
enforce this Agreement.
(f) Non-Disparagement Agreement. For a period of two years from the
Effective Date of this Agreement, Hall specifically agrees that he will not in
any way disparage any person released in paragraph 4(c) above, KN's consultants,
agents, or KN's business operations or decisions.
(g) Taxes Owed by Hall. Hall owes KN Thirty Seven Thousand Four Hundred
Thirty Two Dollars and Fifty Cents ($37,432.50) for taxes paid by KN on Hall's
behalf related to lapses of restrictions on restricted stock awards which
occurred on February 10, 1999 and March 4, 1999. Hall will reimburse KN for all
taxes owed ten days after the Effective Date of This Agreement.
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(h) Representation. Hall represents that he knows of no representation
or promise made by him on behalf of KN which is not known to either a director
or senior manager or a person who held such a position at the time Hall made the
representation or promise known to that person. Hall has made no representations
or promises on behalf of KN since July 8, 1999.
5. OLDER WORKER BENEFIT PROTECTION ACT ACKNOWLEDGEMENT. Hall knowingly
and voluntarily waives any and all claims under the Age Discrimination in
Employment Act ("ADEA"), 29 U.S.C. Section 621, et seq., and agrees as follows:
(a) Hall's termination is an individual termination and not part of "an
exit incentive or other employment termination program offered to a group or
class of employees," as that phrase is used at 29 U.S.C. Section 626(f)(1)(H).
(b) This waiver is part of an Agreement that is written in a manner
calculated to be understood by Hall.
(c) This waiver specifically refers to rights and claims arising under
the ADEA.
(d) Hall does not waive any claims that may arise after the date this
Agreement is executed.
(e) Hall waives ADEA rights or claims only in exchange for
consideration in addition to anything of value to which he is already entitled.
(f) Hall has consulted with an attorney before executing this
Agreement.
(g) Hall shall have 21 days from the date he receives this Agreement
within which to consider it insofar as it relates to claims under the ADEA,
although he may accept this Agreement at any time within those 21 days. The
parties agree that changes to this Agreement whether material or immaterial do
not restart the running of the 21 day period.
(h) Hall shall have seven days from the date he accepts and signs this
Agreement with respect to age discrimination claims within which to revoke his
acceptance of this Agreement insofar as it relates to waiver of claims under the
ADEA. Those provisions are contained in paragraphs 2(d), 3(b), 4(d) and 5. To be
effective, such revocation must be made in writing to Sr. Vice President - Human
Resources and Administration, received by the close of business on the seventh
day following acceptance. The effective date of the Age Discrimination
Provisions of this Agreement shall be the eighth day after Hall's written
acceptance of the Age Discrimination Provisions.
6. COOPERATION IN LITIGATION OR REGULATORY PROCEEDINGS. Hall will
cooperate with KN or its successor in the prosecution or defense of any matters
where KN or its successor believes Hall's participation might be useful by
answering fully all questions about his work at KN. If Hall is contacted by any
person representing interests adverse to KN or by any person employed by or
acting on behalf of any regulatory body, he will immediately
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notify the General Counsel of KN or its successor before speaking with any such
person. Hall has had access to information subject to attorney-client privilege
and/or work product protection. Hall will not divulge any such information
without the consent of KN or its successor.
7. NON-DISCLOSURE OF TERMS OF THIS AGREEMENT. KN and Hall agree not to
divulge, disclose or publicize in any manner to any third party, including
current or former employees of KN, the terms and conditions of this Agreement,
except (1) insofar as is necessary to enforce the Agreement or to respond to an
order of a court or administrative agency for disclosure, (2) compliance with
reporting obligations composed by regulatory authorities including but not
limited to the Securities and Exchange Commission, and (3) that such terms may
be disclosed to Hall's immediate family, tax, legal or financial advisors, if
any, on condition that any such person to whom the terms or conditions of this
Agreement are disclosed shall be instructed not to disclose the terms or
conditions to anyone else. Should a third person inquire as to the status or
resolution of any dispute between the parties, the parties may say only that the
parties have resolved all differences. For purposes of this paragraph
Kinder-Morgan, Inc., Richard Kinder and William Morgan are not third parties.
8. USE IN OTHER PROCEEDINGS. Each party agrees that this Agreement
shall not be tendered or admissible as evidence in any proceeding by either
party for any purpose, except, (i) that the Agreement shall be admissible as
evidence in a proceeding involving the parties in which an alleged breach of the
Agreement or the validity of any term of the Agreement is at issue, or (ii) that
the Agreement may be used by either party provided the party gives written
notice to the other party at least twenty days in advance of any such use and
does not oppose the party's standing to file objections to such use.
9. REMEDIES.
(a) In addition to any other remedies that may be available to KN or
Hall, the parties, agree that, in the event a party breaches any of the promises
set forth in this Agreement at paragraphs 3(f), 4(a), 4(b), or 4(f) and such
breach is proven in a proceeding provided for in this Agreement, such party
shall be liable for damages in the amount of $100,000 for each breach. The
parties specifically agree that such damages are liquidated damages and not a
penalty. Such damages shall not be available until notice of a breach of this
Agreement is provided to the alleged breaching party in writing and the party is
given a reasonable opportunity to cure such breach. The parties also agree that
continuing harm would result to the affected party should the breaching party
not cease and desist all conduct in violation of the Agreement, and that the
affected party would be entitled to an injunction prohibiting such continuing
conduct in addition to any liquidated damages awarded.
(b) The rights and obligations of this section shall survive any
expiration or termination of this Agreement.
10. NO ADMISSION OF LIABILITY. The entry into this Agreement by KN is
not and shall not be construed to be an admission of any act, practice or policy
by KN or any of its present or former officers, directors, agents,
representatives or employees, in violation of any
7
<PAGE> 8
statute, common law duty, constitution, or administrative rule or regulation,
any such liability being expressly denied.
11. PLACE FOR RECEIPT OF THE MONTHLY PAYMENTS AND OTHER NOTICES.
Payment of the Monthly Payments, if made by mail, and any other written notice,
shall be made to: 1892 Sugarbush Drive, Evergreen, Colorado 80439.
12. ARBITRATION. All disputes arising between the parties in connection
with this Agreement except claims for injunctive relief to enforce paragraphs
3(f), 4(a), (b), and (f), 6, or 7, or any underlying claim purportedly released
pursuant to this Agreement shall be resolved by final and binding arbitration
under the Colorado Uniform Arbitration Act by a single arbitrator. The
arbitrator shall be mutually selected by the parties to this Agreement and shall
have the following qualifications: (a) such person shall have no previous
business or personal relationship with either of the parties, (b) such person
shall reside in the greater metropolitan area of Denver, Colorado, (c) such
person shall be a lawyer with at least 15 years of experience in commercial
litigation which shall include (but not be limited to) experience in the areas
of employment, labor, human resources or similar matters involving senior
management, or (d) such person shall be a retired judge with at least 15 years
of experience in civil matters within the State of Colorado. If the parties
cannot reasonably agree on an arbitrator within 30 calendar days of the receipt
of a notice of dispute by one party to the other, such arbitrator shall be
chosen under the then prevailing commercial rules of the American Arbitration
Association, as modified by this Agreement. The arbitrator shall award the
prevailing party reasonable attorneys fees, the costs of the arbitration, and
reasonable expert witness fees.
13. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of Colorado.
14. ACKNOWLEDGMENT. Hall hereby certifies that he has read this
Agreement and understands its terms and significance, and that he executes it
voluntarily and with full knowledge of its effect.
15. SEVERABILITY. If any provision of this Agreement is found to be
unenforceable, the remaining provisions shall remain in full force and effect.
16. SUCCESSORS AND ASSIGNMENT. This Agreement is binding on and inures
to the benefit of the heirs, personal representatives, successors and assigns of
both parties. This Agreement may not be assigned by Hall without the express
written consent of KN.
17. PARAGRAPH HEADINGS. The headings or this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any portion hereof.
18. ENTIRE AGREEMENT. This document constitutes the entire agreement of
the parties and may not be expanded or amended except by express written
agreement executed by both.
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Accepted this 4th day of October, 1999.
/s/ Larry D. Hall
---------------------------------------------
LARRY D. HALL
KN ENERGY, INC.
By /s/ Stewart A. Bliss
-------------------------------------------
Stewart A. Bliss
Title: Chairman and CEO
Witness: /s/ Michael S. Richards
-------------------------------------
Title: Assistant General Counsel
---------------------------------------
Acceptance of Age Discrimination Provisions
/s/ Larry D. Hall
---------------------------------------------
LARRY D. HALL
Date: October 4, 1999
----------------------------------------
9
<PAGE> 1
EXHIBIT 10(i)
AMENDED AND RESTATED BASKET AGREEMENT
THIS AGREEMENT made and entered into as of November 13, 1989 among
American Oil and Gas Corporation, a Delaware corporation ("American"), its
wholly-owned subsidiary, American Pipeline Company, a Delaware corporation
("Pipeline"), Cabot Corporation, a Delaware corporation ("Cabot") and its
indirect wholly-owned subsidiary, Cabot Transmission Corporation, a Delaware
corporation ("Transmission"), as amended and restated as of June 30, 1990;
WHEREAS, pursuant to an Amended and Restated Omnibus Acquisition
Agreement dated as of November 13, 1989 (the "Omnibus Agreement") by and among
American, Cabot and Transmission, and certain additional agreements referred to
therein, (i) American acquired from Transmission all of the capital stock of
Cabot Gas Supply Corporation, a Delaware corporation ("CGSC") and (ii) by way of
merger, the Merger Companies (as defined in the Omnibus Agreement) became
wholly-owned subsidiaries of American (CGSC and the Merger Companies being
collectively referred to herein as the "Acquired Companies");
WHEREAS, the capital stock of the Acquired Companies was assigned by
American to Pipeline;
WHEREAS, Cabot, Transmission, American and Pipeline originally entered
into this Agreement in order to make special provisions for allocating the
benefits, burdens and responsibilities for handling certain assets and
liabilities of the Acquired Companies;
WHEREAS, Cabot, Transmission, American and Pipeline desire to amend
certain terms of this Agreement as of June 30,1990, but effective November
13,1989, by restating this Agreement, as amended in its entirety;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, agreements and indemnities contained herein and in
the Omnibus Agreement, the parties hereto agree as follows:
<PAGE> 2
1. Capitalized Terms. Capitalized terms not otherwise defined
herein or in the preamble hereto shall have the same meaning ascribed to them
in the Omnibus Agreement.
2. Definitions.
2.1 "Annual Replacement Gas Cost Differential" shall mean,
with respect to each of the calendar years 1990 through 1993 an amount not less
than zero equal to the lesser of (i) the sum of the Monthly Replacement Gas Cost
Differential for each of the twelve calendar months in such year or (ii)
$1,500,000; provided, however, that for 1993, the Annual Replacement Gas Cost
Differential shall be the lesser of (a) the lesser of the amounts provided in
clauses (i) and (ii) above or (b) the positive difference between $5,000,000 and
the cumulative sum of Annual Replacement Gas Cost Differential for each of the
prior years for which such a determination was made (it being understood that in
no event shall the cumulative sum of Annual Replacement Gas Cost Differential
exceed $5,000,000); and provided further, that the Annual Replacement Gas Cost
Differential for the calendar year 1990 shall be annualized to include the
Monthly Replacement Gas Cost Differential for the final two calendar months of
1989.
2.2 "Basket Advance" is defined in the Revolving Credit Note.
2.3 "Basket Collections" means the cumulative aggregate amount
(without duplication) of cash collections realized by the Acquired Companies
after September 30,1988 until the date of determination from:
(i) the amortization in the actual weighted average cost of
gas used in billing customers or liquidation or recovery in any other
manner of prepaid gas assets of the Acquired Companies accrued in
connection with the settlement, discharge, compromise or release of
Take or Pay Claims (regardless of whether such prepaid gas assets
existed as of September 30, 1988, or are created thereafter either
prior to, on or after the Closing Date);
(ii) the portion of repayment of intercompany exchange gas
balances attributable to the exchange price differential of the
Acquired Companies existing as of September 30,1988, as reflected on
the combined balance sheet of the Acquired Companies as of such date,
but only to the extent that such exchange price differential is
amortized and realized in the manner specified in
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<PAGE> 3
the penultimate paragraph of this Section 2.3 on or prior to March 31,
1990, which Basket Collections shall be deemed to be $9,242,000; and
(iii) the recovery by flow-through to customers or liquidation
or recovery in any other manner of other assets and costs (including,
without limitation, payments for unused transportation services, costs
of contract reformation and contract buy-downs, gas reservation fees,
premiums on gas purchases and direct outside legal fees) regardless of
whether such assets and costs existed as of September 30, 1988 or are
created or incurred thereafter (either prior to, on or after the
Closing Date) directly related to the settlement, discharge, compromise
or release of Take or Pay Claims.
For purposes of this Agreement, in the case of Basket Collections made
by an Acquired Company whose sales price of gas is regulated by a governmental
agency (a "Regulated Company"):
(i) Basket Collections which can be realized by including such
amounts in the cost of gas portion of such Regulated Company's rate
shall be considered realized by such Regulated Company during the
calendar month following the month in which funds related to the Basket
Collections are included in the actual weighted average cost of gas
utilized in billing its customers. If the rate mechanisms utilized in
billing the customers of a Regulated Company for gas costs are changed,
Basket Collections shall be considered realized by such Regulated
Company in the calendar month following the month in which funds
related to the Basket Collections are included in its calculation of
rates to be charged to its customers for such month. The amount of the
cash collection realized shall equal the amount included in the actual
weighted average cost of gas or in the calculation of rates.
(ii) In those instances where Basket Collections can be
realized only by including amounts in the non-cost of gas portion of a
Regulated Company's rates, Basket Collections shall be considered
realized during any given month in an amount equal to (i) the sales
volume of gas for such month multiplied by (ii) an incremental unit
cost equal to the amount of costs related to Basket Payments included
in the costs of such Regulated Company utilized in establishing the
rates divided by the gas volumes utilized in establishing such rates.
Notwithstanding any provision of this Section 2.3 to the contrary, an
Acquired Company that is not a Regulated Company (an "Unregulated Company")
shall realize Basket Collections only in the following manner and to the
following extent:
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<PAGE> 4
(a) With respect to the liquidation or recovery prior to July
1, 1990 of prepaid gas assets of the type referred to in clause (i) of
the first paragraph of this Section 2.3, the dollar amount deemed
collected as a Basket Collection with respect to a volume of such
prepaid gas taken by such Unregulated Company during a calendar month
and attributable to a Basket Payment shall be the product of (x) the
number of units of volume (converted to MMBtu's) comprising such volume
and (y) the lesser of (a) the contractual unit cost of gas specified or
implied as one of the terms of such Basket Payment and (b) the weighted
average unit sales price of gas of such Unregulated Company during such
month, and such dollar amount shall be deemed to be collected during
the following calendar month; and
(b) with respect to the liquidation or recovery after June 30,
1990 of prepaid gas assets of the type referred to in clause (i) of the
first paragraph of this Section 2.3, the dollar amount deemed collected
as a Basket Collection with respect to a volume of such prepaid gas
taken by such Unregulated Company during a calendar month and
attributable to a Basket Payment shall be the product of (x) the number
of units of volume (converted to MMBtu's) comprising such volume and
(y) 80% of the Unregulated Monthly WASP calculated for such month, and
such dollar amount shall be deemed to be collected during the following
calendar month; and
(c) with respect to the liquidation or recovery of fees or
payments for the right to purchase gas in the future at a defined price
accrued as Basket Payments and paid in connection with the settlement,
discharge, compromise or release of Take or Pay Claims (regardless of
whether such fees or payments were paid prior to September 30, 1988, or
paid thereafter either prior to, on or after the Closing Date) (such
fees or payments being herein referred to as "Gas Reservation Fees"),
in the event a volume of gas is taken in a calendar month by an
Unregulated Company and with respect to such volume a Gas Reservation
Fee has been accrued as a Basket Payment, a Basket Collection shall be
deemed collected in the calendar month following the month of such take
in an amount equal to the lesser of (i) the aggregate Gas Reservation
Fee with respect to such volume and (ii) the amount by which (A) the
product of (x) the number of units of volume (converted to MMBtu's)
comprising such volume and (y) 80% of the Unregulated Monthly WASP
calculated for the calendar month of such take exceeds (B) the
aggregate gas purchase price accrued or paid for such volume of gas (it
being understood that in the event there is no such excess as
determined
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<PAGE> 5
under this clause (ii), then there shall be no deemed Basket Collection
with respect to such Gas Reservation Fee); and
(d) with respect to the recovery of other assets (other than
prepaid gas assets of the type referred to in clause (i) of the first
paragraph of this Section 2.3) and costs of the type referred to in
clause (iii) of the first paragraph of this Section 2.3 (including,
without limitation, any charge for Take or Pay Recovery Costs but
excluding any deemed Basket Collection of gas reservation fees pursuant
to clause (c) of this paragraph ), a Basket Collection shall be
realized in the calendar month in which payment therefor is received
and only to the extent and only in the event such asset is purchased,
or cost is borne, by the purchaser of gas from the Unregulated Company
under a gas purchase contract that expressly provides that such cost or
asset shall be charged to, and paid by, the purchaser.
For purposes of this Agreement, with respect to clause (ii) of the
first paragraph of this Section 2.3:
(i) It is hereby stipulated and agreed that the exchange price
differential of the Acquired Companies existing as of September 30,
1988, and representing the dollar amount of gas owed by CEMCO (now
Anthem Energy Company) to CGSC (now Westar Transmission Company) at
such date was $12,310,000 (calculated on the basis of 14,319 MMcf of
gas at $0.86 per Mcf).
(ii) During each calendar month thereafter, beginning with
October 1988 and ending with March 1990, if there has been a net
reduction during such month in the volume of gas owed by CEMCO (now
Anthem Energy Company) to CGSC (now Westar Transmission Company), the
dollar amount attributable to such net reduction, which shall be
determined by multiplying the number of Mcf's comprising such net
reduction by $0.86, shall be deemed to be a Basket Collection of such
dollar amount realized by the Acquired Companies during such calendar
month, until the earlier of March 31, 1990 or such time as the
aggregate amount of such deemed Basket Collections shall equal
$12,310,000, at which time no further amounts shall be deemed to be
Basket Collections attributable to the exchange price differential of
the Acquired Companies.
If any amount included in Basket Collections by virtue of its
amortization in the actual weighted average cost of gas pursuant to clause (i)
of the first paragraph of this Section 2.3 is thereafter disallowed by final and
nonappealable order entered in any applicable rate proceeding or through good
faith negotiations with customers, the amount so disallowed shall thereupon be
deducted from Basket Collections, provided that after the Closing, American
shall act in good faith in any such rate
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<PAGE> 6
proceeding or negotiations in recognition of the intent of the parties to this
Agreement that such amounts be included in Basket Collections to the extent
practicable. To the extent, if any, any such disallowance results in an
offsetting economic benefit to American, Pipeline or any of the Acquired
Companies, the fair value of such benefit, when and as realized, shall be deemed
to be a Basket Collection.
2.4 "Basket Collections Account" means an account maintained by
Pipeline and the Acquired Companies pursuant to Section 3 hereof for the purpose
of recording cumulative Basket Collections.
2.5 "Basket Deficit" is defined in Section 4.2 hereof.
2.6 "Basket Payments" means the cumulative sum (without duplication) as
of the date of determination of (i) consideration paid or otherwise incurred by
the Acquired Companies after September 30, 1988, in connection with the
discharge, settlement, compromise or release of any Take or Pay Claims
(including, without limitation, the value of prepayments for gas, payments for
unused transportation services, costs of contract reformation and contract
buy-downs, gas reservation fees and premiums on gas purchases), (ii) the amount
of any direct outside legal fees and expenses incurred by the Acquired Companies
after September 30, 1988, in connection with the discharge, settlement,
compromise or release of Take or Pay Claims and (iii) the aggregate of the
Annual Replacement Gas Cost Differentials for all calendar years ending prior to
the March 31 occurring on or next preceding the date of determination.
2.7 "Basket Payments Account" means an account maintained by Pipeline
and the Acquired Companies pursuant to Section 3 hereof for the purpose of
recording cumulative Basket Payments.
2.8 "Basket Surplus" is defined in Section 4.1 hereof.
2.9 "Closing Date" and "Closing" are defined in the Omnibus Agreement.
2.10 "Determination Date" means October 31, 1989.
2.11 "Determination Date Basket Deficit" is defined in Section 3.2
hereof.
2.12 "Determination Date Basket Excess" is defined in Section 3.2
hereof.
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<PAGE> 7
2.13 "El Paso" means E1 Paso Natural Gas Company, a Delaware
corporation.
2.14 "FERC" means the Federal Energy Regulatory Commission.
2.15 "Future Basket Collections" means all cash collections reasonably
estimated to be realized (as determined in accordance with Section 2.3 hereof)
by the Acquired Companies after the Settlement Date from the matters described
in clauses (i), (ii) and (iii) of the first paragraph of Section 2.3 hereof;
provided that Future Basket Collections shall not include any future collections
related to the recovery of Take or Pay Recovery Costs.
2.16 "Future Basket Payments" means all amounts described in clauses
(i) and (ii) of Section 2.6 hereof reasonably estimated to be paid or incurred
by the Acquired Companies after the Settlement Date; provided that Future Basket
Payments shall not include any future payment of Take or Pay Recovery Costs.
2.17 "Guaranty" means a Guaranty Agreement substantially in the
form attached hereto as Appendix C.
2.18 "Initial Settlement Date" means June 30,1994.
2.19 "Initial Take or Pay Account Statement" is defined in Section
3.1 hereof.
2.20 Monthly Minimum Residue Gas Volume" shall mean, for any given
month, the gas volume (expressed in Mcf's) obtained by multiplying the number of
days in such month by the following daily gas volumes applicable to such month:
(i) for months prior to January 1991- 50,000 Mcf, (ii) for months during 1991-
47,500 Mcf, (iii) for months during 1992 - 45,000 Mcf and (iv) for months during
1993- 42,500 Mcf.
2.21 "Monthly Replacement Gas Cost Differential" shall mean, with
respect to each calendar month commencing with November 1989 and ending with
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December 1993, a dollar amount equal to the product obtained by multiplying (i)
the applicable Monthly Residue Gas Volume Shortfall by (ii) the difference
(which may be positive or negative) obtained by subtracting the applicable
Residue Gas Contract Price from the applicable Replacement Gas Price; provided,
however, that if, in its good faith business judgment, American elects to make a
payment of a cash basis loss reimbursement under Section 3.1 of either Residue
Gas Contract (as hereinafter defined) so as to avoid the release of gas
attributable to a particular plant in a particular calendar month and such
payment is a lesser cost alternative to the release of the gas and the
replacement thereof at the Replacement Gas Price, the portion of the Monthly
Replacement Gas Cost Differential for such month attributable to such plant
shall be deemed (in lieu of the product computed as aforesaid with respect to
such plant) to be the amount of such cash basis loss reimbursement to the extent
such payment is necessary to avoid or reduce a monthly Residue Gas Volume
Shortfall.
2.22 "Monthly Residue Gas Volume Shortfall" shall mean, for any given
calendar month, the amount (measured in Mcf's) by which the aggregate amount of
residue gas available for purchase by the Acquired Companies from The Maple Gas
Corporation, or any successor thereto ("Maple"), under those certain Residue Gas
Purchase Agreements identified in Appendix D hereto (or any amendment or
modification thereof to which Cabot has consented in its discretion) (the
"Residue Gas Contracts") is less than the applicable Monthly Minimum Residue Gas
Volume; provided, however, that the Monthly Residue Gas Volume Shortfall shall
be zero for any month unless any portion of such shortfall below the Monthly
Minimum Residue Gas Volume solely or partially resulted from the release of gas
from the Residue Gas Contracts pursuant to Section 3.1 of either of the Residue
Gas Contracts or the exercise by Maple of any other economic or market "outs" or
similar rights which would have the effect of releasing residue gas under any
amendment or modification of the Residue Gas Contracts to which Cabot has
consented in its discretion; and provided further that in an event shall the
Monthly Residue Gas Volume Shortfall exceed the aggregate amount (measured in
Mcf's) of gas so released from the Residue Gas Contracts.
2.23 "Option Date" means the date of the closing of the acquisition by
American of Gathering Company pursuant to the exercise of the Gathering Company
Option.
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<PAGE> 9
2.24 "Payment Date" is defined in Section 4.1 hereof.
2.25 "Replacement Gas Price" shall mean, for any given month, the
weighted average cost of gas per Mcf (as adjusted for MMbtu content) of all gas
purchased by CEMCO or its successor in such month from the alternative gas
purchase sources listed in Appendix E hereto, as it may be amended from time to
time by mutual agreement of American and Cabot.
2.26 "Residue Gas Contract Price" shall mean, for any given month, the
lowest contract sales price per Mcf (as adjusted for MMbtu content) of residue
gas in effect under the Residue Gas Purchase Contracts described in Appendix D
hereto (or under any renewal, amendment or modification thereof to which Cabot
has consented in its discretion); provided that if any of such contracts (or
under any renewal, amendment or modification thereof to which Cabot has
consented in its discretion) cease to be valid and enforceable against The Maple
Gas Corporation, or any successor thereto, the last effective contract sales
price of residue gas under such contract shall be considered in effect for the
purpose of determining the lowest contract sales price. If such last effective
contract price is stated by formula, then such formula shall be applied to the
month in which a Monthly Residue Gas Volume Shortfall exists.
2.27 "Revolving Credit Note" means a promissory note substantially in
the form attached hereto as Appendix B.
2.28 "Settlement Amount" is defined in Section 5(b) hereof.
2.29 "Settlement Date" means the Initial Settlement Date or any
extension thereof which may occur pursuant to Section 3.3 hereof.
2.30 "Settlement Date Value" means the net present value as of the
Settlement Date of each of (i) Future Basket Collections and (ii) Future Basket
Payments. Future Basket Collections and Future Basket Payments, and the timing
thereof, shall be based upon estimates of future deliverable supplies of gas,
projections of market conditions, and prices based on market prices in effect as
of the Settlement Date for similar gas. Estimates of Future Basket Collections
shall take into consideration the reasonable probabilities of recovery of such
costs through flow through under contracts, rules, orders and regulations in
effect as of the Settlement
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<PAGE> 10
Date and taking into account projections of market conditions. The Settlement
Date Value shall be established using a discount rate, compounded semi-annually,
equal to the weighted average cost of borrowed money of American as of the
Settlement Date.
2.31 "Settlement Period" means the period from September 30, 1998
to the Settlement Date.
2.32 "Take or Pay Account Statement" is defined in Section 3.1
hereof.
2.33 "Take or Pay Claims" means (i) all claims, liabilities and losses
resulting from (a) the failure or alleged failure of any of the Acquired
Companies to take or pay (or take and pay) for minimum quantities of gas
attributable to any period prior to the Closing Date including, without
limitation, claims alleging violation of ratable take obligations and claims
alleging damages for failure to take-gas (but excluding Take or Pay Recovery
Costs included in clause (ii) hereof) or (b) the failure or alleged failure of
Cabot Pipeline Corporation to take or pay (or take and pay) for minimum
quantities of gas under the contracts specified in Appendix F hereto
attributable to the period from September 29, 1984 through June 30, 1985
including, without limitation, claims alleging violation of ratable take
obligations and claims alleging damages for failure to take gas (but excluding
Take or Pay Recovery Costs included in clause (ii) hereof) and (ii) all costs
resulting from the incurring by the Acquired Companies of any Take or Pay
Recovery Costs, but excluding all claims, liabilities and losses relating to any
of the matters described in Schedule 13.01(A) to the Omnibus Agreement.
2.34 "Take or Pay Recovery Costs" means any costs or other amounts paid
to past or future gas suppliers or gas transporters by the Acquired Companies
(whether in the form of a direct payment or billing or surcharge on future
purchases or transportation or otherwise) after October 31, 1989 pursuant to
filed tariffs, orders of a regulatory body or statute, under any program
established primarily for the purpose of providing such suppliers or
transporters with a mechanism to recover, or be reimbursed for, past take or pay
liabilities, whether under Order 500 promulgated by the FERC or any other rule
or order of any regulatory body, federal or state, having jurisdiction over gas
pipelines, suppliers or transporters, or otherwise, and whether or not such cost
or amount is determined with regard to the historical gas purchases or
transportation of the Acquired Companies.
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2.35 "Unrecovered Take or Pay Recovery Costs" means the amount (if
positive) obtained by subtracting $5 million from the aggregate Basket Payments
made by the Acquired Companies as of the Settlement Date relating to Take or Pay
Recovery Costs that have not been recouped or amortized by the Acquired
Companies by the realization of corresponding Basket Collections prior to the
Settlement Date.
2.36 "Unregulated Monthly WASP" means the weighted average unit sales
price per MMBtu received by Anthem Energy Company (formerly CEMCO) ("Anthem")
for all gas sold in the State of Texas in Texas Railroad Commission Districts 8,
8A and 10 under sales contracts with primary terms of less than 90 days, during
a given calendar month by Anthem, excluding sales to Anthem's affiliates,
determined by dividing the total number of MMbtu's of such gas sold by Anthem in
such calendar month into the net proceeds received from such sales in such month
after deducting any charges incurred by Anthem for third party transportation
relating to such gas (including, without limitation, transportation on pipelines
belonging to joint ventures or partnerships in which Anthem's affiliates have an
interest, but excluding charges, if any, for transportation of the gas through
facilities wholly owned by the Acquired Companies) and after adjusting for prior
period adjustments.
3. Accounting.
3.1 Take or Pay Account Statement. Cabot and American shall jointly
prepare, within 30 days after the Determination Date, a statement as of the
Determination Date which reflects the Basket Payments paid or otherwise incurred
by, and the Basket Collections realized by, the Acquired Companies since
September 30, 1988 (the "Initial Take or Pay Account Statement"). If Cabot and
American are unable to agree on the preparation of the Initial Take or Pay
Account Statement within 30 days after the Determination Date, the Initial Take
or Pay Account Statement shall be determined by an independent accounting firm
selected by mutual agreement of Cabot and American. The determinations included
in the Initial Take or Pay Account Statement prepared by such accounting firm
shall be final and binding on Cabot and American, and the fees and expenses of
such accounting firm shall be borne equally by Cabot and American. During the
period prior to Closing, Cabot shall have caused the Acquired Companies to
maintain, and, after Closing, American shall cause the Acquired Companies to
maintain, their books
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and records in such a manner that Basket Collections, Basket Payments and
potential flow-through costs incurred in the settlement, discharge, compromise
or release of Take or Pay Claims can be clearly identified and calculated.
During the Settlement Period, American shall cause the Acquired Companies to
make adjustments to the Initial Take or Pay Account Statement (the Initial Take
or Pay Account Statement and each successive adjusted statement delivered
pursuant to the next succeeding sentence are each herein described as a "Take or
Pay Account Statement") to reflect increases and decreases in the accounts on
such Take or Pay Account Statement in accordance with the terms hereof. Within
30 days after the end of each calendar quarter occurring after the Closing Date,
and ending with the last calendar quarter ending on a date prior to the
Settlement Date, American shall deliver a quarterly interim Take or Pay Account
Statement to Cabot reflecting such account adjustments made during the previous
calendar quarter and the balance of each account as of the end of such calendar
quarter.
3.2 Adjustments. If prior to Closing Cabot or any of the Acquired
Companies shall have settled, released, compromised or discharged any Take or
Pay Claims, or if after Closing American or any of the Acquired Companies
settles, releases, compromises or discharges any Take or Pay Claims, the Basket
Payments Account reflected on the then current Take or Pay Account Statement
shall be adjusted to reflect the amount of Basket Payments incurred by any of
the Acquired Companies. Basket Payments consisting of Annual Replacement Cost
Differential for any of the calendar years 1990 through 1993 shall be reflected
in Basket Payments on and as of the March 31 next following the end of such
calendar year. The Basket Collections Account reflected on the then current Take
or Pay Account Statement shall be adjusted to reflect the amount of Basket
Collections. If the Initial Take or Pay Statement reflects an excess as of the
Determination Date of the balance of the Basket Collections Account over the
balance of the Basket Payments Account (the "Determination Date Basket Excess"),
then the amount of such Determination Date Basket Excess shall be retained in
the Acquired Companies through the Determination Date for the benefit of
American and Pipeline and an amount equal to such Determination Date Basket
Excess shall be excluded as of the Determination Date from the calculation of
Working Capital (as defined in Section 13.01 of the Omnibus Agreement) of the
Acquired Companies for the purpose of Section 13.01 of the Omnibus Agreement. If
the Initial Take or Pay Statement reflects an excess as of the Determination
Date of the balance of the Basket Payments Account over the balance of the
Basket Collections Account (the "Determination Date Basket Deficit"),
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<PAGE> 13
then the amount of such Determination Date Basket Deficit shall be deemed drawn
as a Basket Advance on the Revolving Credit Note on the Determination Date and
shall not be included in the calculation of Working Capital as of the
Determination Date pursuant to Section 13.01 of the Omnibus Agreement.
3.3 Final Statement. Within 30 days after the Initial Settlement Date
(and any subsequent Settlement Date in the event such date is extended pursuant
to this Section 3.3), American shall submit to Cabot a proposed final Take or
Pay Account Statement which shall reflect cumulative aggregate Basket
Collections and Basket Payments during the Settlement Period and the respective
balances of the Basket Collections Account and the Basket Payments Account as of
the applicable Settlement Date. In addition, the proposed final Take or Pay
Account Statement shall reflect American's estimate of Future Basket
Collections, Future Basket Payments and the Settlement Date Value of each.
Within 30 days after Cabot has received such proposed final Take or Pay Account
Statement, Cabot shall notify American whether Cabot agrees or disagrees with
all or a portion of such statement. If Cabot agrees with such statement in its
entirety, the parties shall settle in accordance with Paragraph 4 hereof. If the
parties are unable to agree on a final Take or Pay Account Statement within 30
days after Cabot has received American's proposed final Take or Pay Account
Statement with regard to the Initial Settlement Date, the Settlement Date shall
be extended to a date one year from the date of the Initial Settlement Date. At
the end of such extended Settlement Period, Cabot and American shall follow the
procedures set forth herein in an attempt to agree on a final Take or Pay
Account Statement. If within 60 days after the end of the extended Settlement
Period Cabot and American are unable to agree on a final Take or Pay Account
Statement, then Cabot and American shall submit any and all disputes concerning
the amounts reflected in the proposed final Take or Pay Account Statement to
arbitration in accordance with the arbitration procedures set forth in Appendix
A hereto. The decision of the arbitrators concerning the final Take or Pay
Account Statement shall be binding upon the parties as further specified in
Appendix A and, following any final decision rendered by the arbitrators, the
parties shall settle in accordance with Section 4 hereof.
3.4 Limitation on Post-Closing Obligations. Except as otherwise
provided in Section 5(a) hereof, nothing contained in this Agreement shall be
construed to obligate American, Pipeline or the Acquired Companies to file any
proceedings with any regulatory body or to institute litigation to attempt to
recover
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<PAGE> 14
any cost incurred in the settlement, discharge, compromise or release of any
Take or Pay Claim; provided, however, that American and Pipeline shall, and
American and Pipeline shall cause the Acquired Companies to, exert reasonable
efforts in good faith to maintain rate recovery mechanisms existing as of the
date of this Agreement for take-or-pay related costs.
3.5 Amendment Date Take or Pay Account Statement. Attached as Appendix
G is a statement as of June 30, 1990 which reflects the Basket Payments paid or
otherwise incurred by, and the Basket Collections realized by, the Acquired
Companies since September 30, 1988.
4. Sharing of Basket Obligations.
4.1 Excess Net Assets. In the event that, as reflected in the final
Take or Pay Account Statement, the sum of (a) the cumulative aggregate Basket
Collections realized by the Acquired Companies during the Settlement Period plus
(b) the Settlement Date Value of Future Basket Collections exceeds the sum of
(i) the cumulative aggregate Basket Payments incurred by the Acquired Companies
during the Settlement Period (less the amount of any Unrecovered Take or Pay
Recovery Costs) plus (ii) the Settlement Date Value of Future Basket Payments
(the amount of any such excess being referred to herein as the "Basket
Surplus"), then American or Pipeline shall pay to Cabot an amount equal to the
sum of (i) the aggregate Annual Replacement Gas Cost Differentials, if any, for
the years 1990 through 1993 (but only to the extent of such Basket Surplus) plus
(ii) one-half of the remainder of such Basket Surplus after payment of the
amount specified in clause (i), if any, within the later of (A) three business
days after agreement on the final Take or Pay Account Statement or (B) three
business days after the date a final decision is rendered by the arbitrators
regarding the final Take or Pay Account Statement which is submitted to
arbitration pursuant to Section 3.3 hereof (the "Payment Date").
4.2 Excess Net Liabilities. In the event, as reflected in the final
Take or Pay Account Statement, the sum of (A) the cumulative aggregate Basket
Payments incurred by the Acquired Companies during the Settlement Period (less
the amount of any Unrecovered Take or Pay Recovery Costs) plus (B) the
Settlement Date Value of Future Basket Payments exceeds the sum of (x) the
cumulative aggregate Basket Collections realized by the Acquired Companies
during the Settlement Period plus (y) the Settlement Date Value of Future Basket
Collections (the amount of any such
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<PAGE> 15
excess being referred to herein as the "Basket Deficit"), then Cabot shall pay
to American or Pipeline, on the Payment Date, a portion of the Basket Deficit as
follows:
(1) In the event that the Basket Deficit is less than $40
million, Cabot shall pay an amount equal to one-half of the Basket
Deficit, it being understood and agreed that American, Pipeline and the
Acquired Companies shall be fully responsible for the other half.
(2) In the event that the Basket Deficit is equal to or
greater than $40 million, Cabot shall pay an amount equal to $20
million plus all of the Basket Deficit in excess of $40 million, it
being understood and agreed that American, Pipeline and the Acquired
Companies shall remain fully responsible for the remaining $20 million.
4.3 Interest on Sharing Payments. Any payment made by American or
Pipeline pursuant to Section 4.1, or by Cabot pursuant to Section 4.2, shall
bear interest from (and including) the applicable Settlement Date to (but
excluding) the date of payment at an interest rate per annum equal to the rate
per annum that such amount would bear if it was an amount outstanding at the
time under the Revolving Credit Note. Payment of such interest shall be due when
payment of the amount to which it relates is due.
4.4 Character of Sharing Payments. Any payments made by American or
Pipeline pursuant to Section 4.1, or by Cabot pursuant to Section 4.2, shall be
treated as adjustments to the cost of acquiring CGSC pursuant to the Stock
Purchase Agreement.
5. Matters Concerning Gathering Company. (1) In the event American
exercises the Gathering Company Option during the Settlement Period, the
Acquired Companies and Pipeline shall pay over to Cabot, as collected, amounts
paid by Gathering Company prior to the Option Date in settlement, discharge,
compromise or release of take or pay and related claims against Gathering
Company and collected after the Option Date by flow-through to El Paso or to the
Acquired Companies. If, prior to the Option Date, Gathering Company shall have
filed an application with the FERC pursuant to Order 500 of the FERC and related
regulatory provisions to recover a portion of Gathering Company's take or pay
buyout and buydown and related costs, then after the Option Date American and
Pipeline shall cause
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<PAGE> 16
Gathering Company to prudently prosecute such application before the FERC to
recover for Gathering Company a portion of all recoverable costs to the extent
permitted under FERC orders and regulations. If Gathering Company is granted
authority by the FERC to recover a portion of take or pay and related costs,
whether such authority is granted before or after the Option Date, American and
Pipeline shall cause Gathering Company to pay over to Cabot, as collected, all
amounts actually recovered from E1 Paso by Gathering Company pursuant to such
authority.
(b) Regardless of whether American exercises the Gathering Company
Option, in full and final settlement of all take or pay and related claims of
Gathering Company against CGSC, after the Closing Date, Pipeline shall cause
CGSC to pay to Gathering Company (i) to the extent that Gathering Company
remains subject to the jurisdiction of the FERC, any charges to CGSC made by
Gathering Company (whether in the form of a direct payment or surcharge on
future purchases or otherwise) pursuant to filed tariffs reflecting pass through
or recovery of take-or-pay associated costs under any program established and
authorized under Order 500 promulgated by the FERC in any Docket Number
beginning with the prefix "RM 87-34-" or similar rule or order (whether in the
form of a direct payment or surcharge on future purchases or otherwise) and (ii)
to the extent Gathering Company ceases to be subject to the jurisdiction of the
FERC, all amounts that may be owed by CGSC to Gathering Company under that
certain Gas Sales Contract dated December 31, 1957 by and between Gathering
Company, as Seller ("Seller'), and Pioneer Natural Gas Company, predecessor to
CGSC, as Buyer ("Buyer"), as amended (the "Gas Sales Contract") for all claims,
liabilities and losses sustained by Gathering Company as a result of the failure
of CGSC to take or pay for minimum quantities of gas attributable to any period
prior to the Closing Date. For purposes of paragraph 3 of that certain letter
agreement dated August 11, 1977, between Buyer and Seller (the "Letter
Agreement"), an amount equal to 18.12% of any settlements by or judgments
against Seller for take-or-pay liabilities paid or incurred and unpaid, in
either case, prior to Closing shall be considered "the amount necessary for
Seller to prepay Seller's producer suppliers . . . ," and Buyer shall have the
right to take from Seller as prepaid volumes only 18.12% of those volumes
actually recouped or taken by Seller as prepaid volumes as a result of payment
made by Seller to its producer suppliers pursuant to any judgment, settlement or
other contractual obligation. To the extent recoupment by Seller from its
producer suppliers is through a cash payment, Seller shall promptly pay over to
Buyer 18.12% of such payment. The rights and obligations of the parties
hereinabove set forth under the Letter
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<PAGE> 17
Agreement shall survive the expiration date thereof. In no event, however, shall
the aggregate of any amounts owing and paid to Gathering Company under this
paragraph 5 and the Gas Sales Contract exceed $2,100,000 (the sum of all amounts
owing by CGSC hereunder to Gathering Company being herein referred to as the
"Settlement Amount"). Any payments made pursuant to (ii) of the next preceding
sentence shall be adjusted, as appropriate, for amounts paid pursuant to (i) of
such sentence so that the total amount paid thereunder shall not exceed the
amount which would have been payable if Gathering Company had been
non-jurisdictional at all times on and after the Closing Date. Except as
provided in this Section 5 with respect to payment of the Settlement Amount,
Gathering Company agrees to fully release and hold harmless CGSC, its
predecessors, their officers, directors, agents and representatives from and
against all take or pay, take and pay and related claims which Gathering Company
may have, or is alleged to have. In the event that Gathering Company ceases to
be subject to the jurisdiction of the FERC, Gathering Company agrees to execute
and deliver to CGSC an amendment to the Gas Sales Contract, in form and
substance satisfactory to Pipeline, providing in substance that there shall not
be included in any component of the purchase and sales price of gas under the
Gas Sales Contract (whether included in "Cost of Service" or otherwise) any cost
associated with the settlement, discharge, compromise or release of any take or
pay or related claims against Gathering Company attributable to any period prior
to the date of final payment of the Settlement Amount. For all purposes of this
Agreement, any payment of any portion of the Settlement Amount by CGSC shall
constitute a Basket Payment, and, to the extent recovered by the Acquired
Companies by flow-through to customers or liquidation or recovery in any other
manner, a Basket Collection.
(c) Except as otherwise provided in Section 5(a), nothing contained in
this section shall be construed to obligate American, Pipeline or the Acquired
Companies (or, in the event the Gathering Company Option is exercised, Gathering
Company) to file any proceedings with any regulatory body or institute
litigation to attempt to recover any cost incurred in the settlement, discharge,
compromise or release of any take or pay and related claims of Gathering
Company.
6. Revolving Credit Facility. Pipeline has executed and delivered to
Cabot the Revolving Credit Note dated as of the date hereof and American and
Cabot have executed and delivered the Guaranty. Cabot agrees to lend from time
to time to Pipeline, and Pipeline agrees to pay, the respective amounts provided
in the
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<PAGE> 18
Revolving Credit Note in accordance with the terms thereof. Subject to the terms
hereof, Cabot accepts and agrees to be bound by the terms of the Revolving
Credit Note.
7. Settlement of Take or Pay Claims. After the Closing, the Acquired
Companies shall have sole and complete authority to settle, discharge,
compromise or release, or otherwise negotiate or resolve or attempt to resolve
all controversies related to, any Take or Pay Claims; provided that (i) the
Acquired Companies shall keep Cabot reasonably advised, and shall upon request
consult with Cabot, from time to time during the Settlement Period on the status
of the negotiations and proposed resolution of all matters related to Take or
Pay Claims and (ii) with respect to the settlement of any Take or Pay Claim in
an amount in excess of $1,000,000, Cabot shall have the right of prior written
consent. If Cabot does not deliver a written objection to a proposed settlement
in excess of such amount within 15 days after American has delivered a written
proposal of settlement to Cabot, then Cabot shall be deemed to have consented to
such proposal of settlement.
8. Governing Law. Except for the agreement to arbitrate and the other
provisions respecting arbitration contained herein and in Appendix A, which
shall be governed by and construed in accordance with the Federal Arbitration
Act, 9 U.S.C.A. ss.ss. 1-14, as amended, and other applicable U.S. federal law
in each case as in effect on the date hereof, this Agreement shall be governed
by and construed in accordance with the laws of the State of Texas.
9. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their respective successors
and assigns. No assignment of this Agreement shall release any party of any
obligations under this Agreement.
10. Notices. Notices required to be delivered hereunder shall be in
writing and shall be deemed delivered when delivered in accordance with the
notice provisions of the Revolving Credit Note.
11. Effect of Amendment. It is the intent of the parties hereto that
the amendments to the original Basket Agreement effected by this Amended and
Restated Basket Agreement are to be effected retroactively to November 13,1989.
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<PAGE> 19
12. Approval of Certain Creditors. Notwithstanding any provision of
this Amended and Restated Basket Agreement to the contrary, the amendment and
restatement of this Agreement shall not be effective unless and until this
Amended and Restated Basket Agreement is approved, or consented to, by The
Prudential Insurance Company of America and Pruco Life Insurance Company, as
holders of the 11.38% Senior Notes due September 30, 1999 and 12.69% Senior
Subordinated Notes due September 30, 1999 of Pipeline under that certain
Securities Purchase Agreement dated as of November 13, 1989.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
AMERICAN OIL AND GAS AMERICAN PIPELINE COMPANY
CORPORATION
By:/s/ David M. Carmichael By:/s/ David M. Carmichael
--------------------------------- ----------------------
David M. Carmichael David M. Carmichael
President President
CABOT CORPORATION CABOT TRANSMISSION
CORPORATION CORPORATION
By:/s/ John G. L. Cabot By:/s/ John G. L. Cabot
--------------------------------- -------------------
John G. L. Cabot John G. L. Cabot
Vice-Chairman President
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<PAGE> 20
APPENDIX A TO
BASKET AGREEMENT
ARBITRATION PROCEDURES
1. Arbitration Period. The Arbitration Period shall begin 60 days from
the extended Settlement Date, as provided in the Basket Agreement, if the
parties have been unable to reach an agreement on the final Take or Pay Account
Statement by such date; and it shall continue until the Arbitrators have
rendered their decision or the parties have reached a final agreement with
respect to such final Take or Pay Account Statement.
2. Selection of Arbitrators. Each of Cabot (on behalf of itself and
Transmission) and American (on behalf of itself and Pipeline) shall designate an
arbitrator within fourteen days after the beginning of the Arbitration Period
and the two arbitrators so designated shall select a third arbitrator within
thirty days after the beginning of the Arbitration Period. The panel of such
three arbitrators (the "Arbitrators") shall decide any dispute between the
parties with respect to the final Take or Pay Account Statement, as provided in
Section 3.3 of the Basket Agreement, with a vote of two of the Arbitrators
required to render a decision.
3. Location. The arbitration shall be conducted in Houston, Texas.
4. Decision. The decision of the Arbitrators shall be in writing and
shall contain a reasonably complete description of the legal and factual bases
of the award. Except to the extent otherwise provided by applicable law, the
award of the Arbitrators shall be final, binding and unappealable, and such
award shall receive recognition and enforcement in any court of competent
jurisdiction.
5. Governing Rules and Law. The Arbitrators, American, Pipeline, Cabot
and Transmission shall observe and be bound by the procedures set forth herein,
as supplemented (to the extent of lack of conflict) by the Commercial
Arbitration Rules of the American Arbitration Association as in effect on the
effective date of the Basket Agreement. The agreement to arbitrate and the other
provisions respecting arbitration contained herein and in the Basket Agreement
shall be governed by and construed in accordance with the Federal Arbitration
Act, 9, U.S.C.A. ss.ss. 1-14, as amended. and other applicable U.S. federal law
in each case as in effect on the effective date of the Basket Agreement.
6. Costs and Expenses. The costs and expenses of the arbitration shall
be borne and paid by the parties in equal shares and shall include compensation
to the Arbitrators, which compensation shall be negotiated among the parties and
the Arbitrators, plus out-of- pocket expenses. Each party shall bear and be
responsible for the fees of its own counsel and other advisors and any costs
associated with obtaining evidence or the testimony of witnesses or otherwise
making such witnesses available to testify. If the testimony of a witness or
other item of evidence is obtained by both parties, the costs associated with
obtaining such testimony or evidence shall be borne equally between the parties.
<PAGE> 21
APPENDIX B TO BASKET AGREEMENT
Form of Revolving Credit Note
REVOLVING CREDIT NOTE
<PAGE> 22
REVOLVING CREDIT NOTE:
$25,000,000.00 November 13, 1989
FOR VALUE RECEIVED, the undersigned, American Pipeline Company, a
Delaware corporation ("Maker") hereby promises to pay to the order of Cabot
Corporation, a Delaware corporation with its principal offices in Waltham,
Massachusetts ("Lender"), on or before the Payment Date as defined in Section
4.1 of the Basket Agreement hereinafter referred to (the "Maturity Date"), the
lesser of (i) Twenty Five Million Dollars ($25,000,000) and (ii) the aggregate
unpaid principal amount of advances outstanding hereunder, plus all interest
accrued and unpaid hereunder. Maker also agrees to make additional payments of
principal under this Note as provided herein.
This Note is the Revolving Credit Note provided for in, and is entitled
to the benefits of, the Basket Agreement dated the date hereof among American
Oil and Gas Corporation ("American"), American Pipeline Company ("Pipeline"),
Cabot Transmission Corporation and Lender, as and if amended from time to time
(the "Basket Agreement"). It is contemplated that by reason of prepayments
hereon there may be times when no indebtedness is owing hereunder, but
notwithstanding such occurrences, this Note shall remain valid and shall be in
full force and effect as to Basket Advances (as hereinafter defined) and Working
Capital Advances (as hereinafter defined) made pursuant hereto subsequent to
each such occurrence.
1. Interest Rate. This Note shall bear interest on the unpaid principal
amount hereof from time to time outstanding, until maturity (whether by
acceleration or otherwise), at a rate per annum equal to the lesser of (i) the
rate determined in accordance with Schedule I hereto (the "Floating Rate") and
(ii) the
<PAGE> 23
maximum non-usurious contract rate of interest permitted by applicable law (the
"Highest Lawful Rate"). After maturity, the unpaid principal amount hereunder,
and, to the extent permitted by law, accrued unpaid interest hereon, shall bear
interest until paid in full at the rate per annum equal to the lesser of (x) the
Floating Rate plus 5% per annum and (y) the Highest Lawful Rate. Interest
charges will be calculated on amounts owing hereunder on the actual number of
days said amounts are outstanding on the basis of a 360 day year.
2. Working Capital Advances. On any date prior to November 13, 1991,
Maker may borrow and reborrow from time to time on a revolving credit basis for
general working capital purposes (including, without limitation, to fund
advances made by Maker to the Acquired Companies (as defined in the Basket
Agreement) for general working capital purposes) an amount of principal
hereunder upon prior written notice of at least two Business Days (as
hereinafter defined) from Maker to Lender specifying the date and aggregate
principal amount of such advance (such advances are herein referred to as
"Working Capital Advances"); provided that at no time shall the aggregate amount
of Working Capital Advances hereunder exceed $4,000,000 at any one time
outstanding. Each Working Capital Advance to be made hereunder shall be in a
principal amount of not less than $50,000, or any larger amount that is an
integral multiple of $50,000.
3. Basket Advances. Maker may borrow and reborrow from time to time on
a revolving credit basis for the purpose of funding, on a current basis, the
excess of cumulative aggregate Basket Payments (including, for the purposes of
this Note, advances from Maker to the Acquired Companies to fund any Basket
Payments of the Acquired Companies) over cumulative aggregate Basket Collections
(as such terms are defined in the Basket Agreement) an amount of principal as
provided hereunder (such advances are herein referred to as "Basket Advances").
On the Determination Date, Maker shall be deemed to have drawn as a Basket
Advance an
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<PAGE> 24
amount of principal hereunder equal to the Determination Date Basket Deficit (as
defined in the Basket Agreement), as such amount is derived from the Initial
Take-or-Pay Account Statement (as defined in the Basket Agreement). Maker may at
any time and from time to time, but solely for the purpose set forth in the
first sentence of this paragraph, on or before November 13, 1994, borrow and
reborrow an additional amount 0of principal hereunder as a Basket Advance upon
at least two Business Days' prior written notice to Lender specifying the date
and aggregate principal amount of such Basket Advance; provided, however, that
at no time shall the total of aggregate outstanding Working Capital Advances and
aggregate outstanding Basket Advances exceed Twenty-Five Million Dollars
($25,000,000).
4. Advance Procedures and Records. Lender shall deposit the proceeds of
a requested Working Capital Advance or Basket Advance no later than 1:00 p.m.
Houston time on the date so specified in any such notice of the requested
advance to such demand deposit account maintained at a commercial bank as Maker
shall have designated in such notice. Working Capital Advances or Basket
Advances made by Lender to Maker and all prepayments or repayments thereof shall
be recorded by Lender and, prior to any transfer hereof, endorsed by Lender on
Schedule II attached hereto, or on a continuation of such Schedule II to be
attached to and made a part hereof. The failure of Lender to so record any
advance or repayment shall not affect Maker's liability for any Working Capital
Advance or Basket Advance.
5. Mandatory Prepayments. (1) Within three Business Days following the
delivery to Cabot of any quarterly interim Take-or-Pay Account Statement (as
defined in the Basket Agreement), or if such statement is not delivered when
required under the Basket Agreement, within three Business Days following the
date upon which such statement is required to be delivered pursuant to Section
3.1 of the Basket Agreement, Maker shall prepay the outstanding principal
related to Basket Advances in such amount, if any, as may be required so that
the aggregate principal
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<PAGE> 25
amount of all outstanding Basket Advances shall not exceed the sum of (i) the
amount of the excess, if any, of the balance of the Basket Payments Account over
the balance of the Basket Collections Account as of the end of the preceding
calendar quarter and (ii) the aggregate amount of permitted Basket Advances
loaned to Maker since the last day of such calendar quarter, together with
accrued and unpaid interest on the principal amount being prepaid.
(b) Maker shall prepay all outstanding principal related to Working
Capital Advances together with accrued and unpaid interest on the principal
amount thereof on November 13, 1991.
6. Optional Prepayments. Maker may on any Business Day prepay, without
penalty, amounts of principal outstanding hereunder in whole at any time or in
part from time to time in an aggregate principal amount of $50,000 (except in
connection with prepayments made pursuant to paragraph 5 hereof) or any larger
amount that is an integral multiple of $50,000, together with accrued and unpaid
interest on the principal amount being prepaid to the date of prepayment;
provided that Maker shall have given Lender at least one Business Day's prior
written notice of such prepayment. Maker shall designate in such notice the date
and the proposed principal amount being prepaid, in whole or in part, and
whether such prepayment is to reduce outstanding Working Capital Advances or
Basket Advances. Amounts prepaid by Maker as aforesaid shall be applied to
prepay principal as designated.
7. Interest Payments. Interest accrued on all principal amounts
remaining unpaid hereon shall be payable quarterly as it accrues on the last day
of each calendar quarter and at maturity of the respective amounts to which such
interest relates.
8. Procedures on Payments. Payments of both principal and interest are
to be made in lawful money of the United States of America at the office of
Lender or, at Lender's written direction, by wire transfer of such funds to a
commercial bank
B-4
<PAGE> 26
account of Lender. If any payment of principal or interest on this Note shall
become due on a day other than a Business Day, such payment shall be made on the
next Business Day and such extension of time shall in such case be included in
computing interest in connection with such payment. In this Note, the term
"Business Day" shall mean any day other than a Saturday, a Sunday or a day on
which national banks in Houston, Texas, are required or permitted by law to
close.
9. Usury Savings. It is the intention of Maker and Lender to conform
strictly to all applicable usury laws. It is therefore agreed that (i) in the
event that the maturity hereof is accelerated by reason of an election by
Lender, or if the same is prepaid prior to maturity, all unearned interest, if
any, shall be canceled automatically or, if theretofore paid, shall be credited
on the unpaid principal amount of this Note with the excess, if any, refunded to
Maker, (ii) the aggregate of all interest and other consideration and charges
constituting interest under applicable law and contracted for, chargeable or
receivable under this Note or otherwise in connection with the transaction for
which this Note is given shall never exceed the Highest Lawful Rate, nor produce
a rate in excess of the Highest Lawful Rate that Lender may charge Maker under
applicable law and in regard to which Maker may not successfully assert the
claim or defense of usury, and (iii) if any interest above the Highest Lawful
Rate is provided for, it shall be deemed a mistake and the same shall be
credited on the unpaid principal amount of this Note with the excess thereof, if
any, being refunded to Maker and this Note shall be automatically deemed
reformed so as to permit only the collection of the Highest Lawful Rate and
amount of interest allowed by applicable law. All sums paid or agreed to be paid
to the holder or holders of this Note for the use, forbearance or detention of
the indebtedness evidenced hereby shall, to the full extent permitted by
applicable law, be amortized, prorated, allocated and spread through the fullest
term of this Note. Lender and Maker further agree that insofar as the provisions
of Article 1.04, Subtitle 1, Title 79, of the Revised
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<PAGE> 27
Civil Statutes of Texas, 1925, as amended, are applicable to the determination
of the Highest Lawful Rate with respect to this Note, the indicated rate ceiling
computed from time to time pursuant to Section (a) of such Article shall apply
to this Note; provided, however, that to the extent permitted by such Article,
Lender may from time to time by notice from Lender to Maker revise the election
of such interest rate ceiling as such ceiling affects the then current or future
balances of the indebtedness outstanding under this Note. The provisions of
Chapter 15 of Subtitle 3 of the said Title 79 do not apply to this Note.
10. Events of Default. Each of the following events shall constitute
an event of default under this Note:
(a) failure by Maker to pay any principal amounts becoming due and
payable on this Note either (i) on the Maturity Date or (ii) pursuant to
paragraph 5(b) hereof; or
(b) failure by Maker to pay any amounts becoming due and payable on
this Note (including principal and accrued and unpaid interest) other than the
amounts referred to in paragraph 10(a) hereof, and continuation of such
nonpayment for a period of 10 days; or
(c) Maker or American makes an assignment for the benefit of creditors,
admits in writing its inability to pay its debts as such debts become due or
fails generally to pay its debts as such debts become due; or
(d) Maker or American petitions or applies to any tribunal for or
consents to the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official, of it or any substantial part of its
assets, or commences any proceedings relating to it under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
other liquidation law of any jurisdiction or takes corporate action in
furtherance of any of the foregoing; or
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<PAGE> 28
(e) any petition or application of the type referred to in clause (d)
above is filed, or any such proceedings are commenced, against Maker or
American, and such petition or application is not dismissed within 30 days of
the date of such filing, or Maker or American by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order for relief is
entered in an involuntary case under the bankruptcy law of the United States, or
an order, judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official or adjudicating Maker or American
bankrupt or insolvent, or approving the petition in any such proceedings, and
such order, judgment or decree remains unstayed and in effect for more than 30
days; or
(f) any order, judgment or decree is entered in any proceeding against
any of Maker or American decreeing the dissolution or split-up of Maker or
American, and such order, judgment or decree remains unstayed and in effect for
more than 60 days; or
(g) any of the Revolving Notes, the Senior Notes, or the Senior
Subordinated Notes (as those terms are defined in Securities Purchase Agreement
dated as of November 13, 1989 among American, Maker, The Prudential Insurance
Company of America and Pruco Life Insurance Company (the "Securities Purchase
Agreement")) shall become or be declared due prior to its stated maturity, or
there is a default in the payment of any such indebtedness at the final stated
maturity thereof, or Maker fails to make any payment required to be made under
Section 5F of the Securities Purchase Agreement; or
(h) any other obligation of Maker or American for money borrowed (or
any capitalized lease obligation, any obligation under a conditional sale or
other title retention agreement, any obligation issued or assumed as full or
partial payment for property whether or not secured by a purchase money mortgage
or any obligation under notes payable or drafts accepted representing extensions
of credit) shall
B-7
<PAGE> 29
become or be declared due prior to its stated maturity, or there is a default in
the payment of any such obligation at the final stated maturity thereof,
provided in any case that the aggregate outstanding principal amount of all such
obligations declared due prior to stated maturity or not paid at final stated
maturity shall be $2,500,000 or more; or
(i) Maker defaults in the performance or observance of paragraph 13
hereof.
11. Remedies Upon Default. Upon the occurrence of an event of default
specified in clause (c), (d), (e), (f), (g), or, if the Senior Notes, Senior
Subordinated Notes and Revolving Notes are no longer outstanding, clause (h) of
paragraph 10 hereof, the unpaid principal of, and accrued and unpaid interest
on, this Note shall automatically become immediately due and payable without any
requirement of notice to Maker except as may be required by law. Upon the
occurrence of any other event of default hereunder, Lender may, by notice to
Maker, declare the unpaid principal of, and accrued and unpaid interest on, this
Note to be due and payable and such principal and interest shall become due and
payable upon the first to occur of (i) an acceleration under the Revolving
Notes, the Senior Subordinated Notes or the Senior Notes (written notice of
which Maker shall give to the Lender as promptly as practical after the
occurrence thereof), (ii) the fifth Business Day after receipt by Maker and the
holders of the Revolving Notes, the Senior Subordinated Notes and the Senior
Notes of such declaration given hereunder and (iii) immediately upon such
declaration if no Revolving Notes, Senior Subordinated Notes or Senior Notes are
outstanding. In the event this Note is in default or its maturity may be brought
about, and it is placed in the hands of an attorney for collection, or is
collected through probate, bankruptcy or other proceedings, Maker promises to
pay all costs and reasonable attorneys' fees incurred by Lender as a result
thereof.
B-8
<PAGE> 30
12. Concerning Advances. Each request by any of Maker for an advance
hereunder shall be deemed to include a representation and warranty by Maker that
(i) Maker is authorized and entitled to obtain such advance hereunder, (ii) such
advance is being requested solely for a purpose authorized hereunder, (iii) no
event of default has recurred and is continuing nor has any event occurred and
is continuing that with notice, lapse of time, or both, would constitute an
event of default and (iv) no default by Maker or American in the payment when
due (beyond any applicable grace period) of any principal or interest on any
obligation referred to in clause (g) or any other obligation or obligations
(aggregating $2,500,000 or more in principal amount) referred to in clause (h)
of paragraph 10 hereof has occurred and is continuing. Notwithstanding any other
provision of this Note or the Basket Agreement, Maker shall not be entitled to
an advance hereunder, nor shall Lender be obligated to make an advance
hereunder. upon the occurrence and continuation of an event of default or of an
event that with notice, lapse of time, or both, would constitute an event of
default or if Maker or American shall default in the payment when due (beyond
any applicable grace period) of any principal or interest on any obligation
referred to in clause (g) or any other obligation or obligations (aggregating
$2,500,000 or more in principal amount) referred to in clause (h) of paragraph
10 hereof and such default shall be continuing.
13. Covenant to Secure or Guarantee this Note Equally: Etc. Maker
covenants that if it or any of its Subsidiaries (as defined in the Securities
Purchase Agreement) shall create any Lien (as defined in the Securities Purchase
Agreement) upon any of its property to secure the payment of any Designated
Indebtedness (as hereinafter defined), Maker will grant or will cause such
Subsidiaries to grant (as applicable) a Lien on such property to secure equally
and ratably the payment of this Note; provided that so long as any Designated
Indebtedness is secured by such Lien Lender shall have no control over the sale
or disposition of the property encumbered
B-9
<PAGE> 31
by any such Lien until such Designated Indebtedness has been paid in full; and
provided further that the creation of any such security shall not in any way
alter the rights of the holders of Senior Indebtedness in relation to, and the
subordination of, this Note as provided in paragraph 14. Maker further covenants
that if any of its Subsidiaries guarantees the payment of any Designated
Indebtedness, Maker will cause such Subsidiary to guarantee payment of this Note
pursuant to a guarantee containing provisions similar to paragraph 14 hereof
with respect to the subordination of the obligations of Maker or such Subsidiary
thereunder to Senior Indebtedness; provided that the making of any such
guarantee shall not in any way alter the rights of the holders of Senior
Indebtedness in relation to, and the subordination of, this Note as provided in
paragraph 14. "Designated Indebtedness" means (a) the Senior Subordinated Notes
so long as they are outstanding, (b) the Revolving Notes and the Senior Notes if
the Senior Subordinated Notes are not outstanding and (c) any Debt (as defined
in the Securities Purchase Agreement) if no Senior Subordinated Notes, Revolving
Notes or Senior Notes are outstanding.
14. Subordination of this Note.
(a) Subordination of Note. Anything in this Note or the Basket
Agreement to the contrary notwithstanding, the indebtedness evidenced by this
Note, both principal and interest, shall be subordinated and junior to the
extent set forth in subparagraphs (i) to (v), inclusive, below to all Senior
Indebtedness.
(i) Upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, then all principal of, premium, if
any, and interest on all such matured Senior Indebtedness shall first
be paid in full, or such payment shall have been provided for in cash
or in a manner satisfactory to each of the holders, respectively, of
such matured Senior Indebtedness, before any payment on account of
principal or interest is made upon this Note or is made to acquire this
Note.
B-10
<PAGE> 32
(ii) Upon the occurrence of an event of default with respect
to any Senior Indebtedness, as such event of default is defined therein
or in the instrument under which it is outstanding, which event of
default may result in the acceleration of the maturity thereof, any
holder or holders of the Senior Notes, the Senior Subordinated Notes or
the Senior Revolving Notes may request (in writing specifying such
event of default with a copy to Lender) that Maker cease payment of all
amounts due on this Note (a "Subordination Notice") and, in the event
such a Subordination Notice is delivered, the holder of this Note shall
not be entitled to receive any amounts due on this Note during the
period (the "Standstill Period") commencing the date of receipt by
Lender of the Subordination Notice and ending the earliest of (a) the
first date on which no such default shall be continuing, (b) the date
on which the provisions of subparagraph (i) or (iii) of this paragraph
14(a) shall become applicable (and all Senior Indebtedness shall have
been paid in full, or such payment shall have been provided for in cash
or in a manner satisfactory to each of the holders, respectively, of
the Senior Indebtedness) and (c) the 60th day after the receipt of such
Subordination Notice (unless (x) another event of default shall have
occurred and be continuing and another Subordination Notice shall have
been received by Lender or (y) an existing event of default is
continuing and another Subordination Notice with respect to such event
of default shall have been received by Lender during such Standstill
Period, provided that the period under this clause (c) during which the
holder of this Note shall not be entitled to receive amounts due on
this Note shall never exceed 120 days). Anything in this subparagraph
(ii) to the contrary notwithstanding, there shall not be more than two
Standstill Periods (each of which not to exceed 120 consecutive days)
during any consecutive 365-day period. Anything in this subparagraph
(ii) to the contrary notwithstanding, Lender shall be entitled to
receive all amounts
B-11
<PAGE> 33
then accrued and unpaid in respect of this Note immediately upon the
termination of the Standstill Period unless another Subordination
Notice shall have been received by the Lender.
(iii) In the event of any insolvency, bankruptcy, liquidation,
reorganization or other similar proceedings, or any receivership
proceedings in connection therewith, relative to Maker, and in the
event of any proceedings for voluntary liquidation, dissolution or
other winding up of Maker, whether or not involving insolvency or
bankruptcy proceedings, then all principal of and interest on all
Senior Indebtedness shall first be paid in full, or such payment shall
have been provided for in cash or in a manner satisfactory to each of
the holders, respectively, of such Senior Indebtedness, before any
payment on account of principal or interest is made upon this Note or
is made to acquire this Note.
(iv) In any of the proceedings referred to in subparagraph
(iii) above, any payment or distribution of any kind or character,
whether in cash, property, stock, partnership interests or obligations,
which may be payable or deliverable in respect of this Note shall be
paid or delivered directly to the holders of Senior Indebtedness (or to
a banking institution selected by the court or Person making the
payment or delivery or designated by any holder of Senior Indebtedness)
for application in payment thereof in accordance with the priorities
existing among such holders, unless and until all principal of,
premium, if any, and interest on all Senior Indebtedness shall have
been paid in full, or such payment shall have been provided for in cash
or in a manner satisfactory to each of the holders, respectively, of
such Senior Indebtedness; provided, however, that:
(a) in the event that payment or delivery of such
cash, property, stock, partnership interests or obligations to
the holder of this Note is
B-12
<PAGE> 34
authorized by an order or decree giving effect, and stating in
such order or decree that effect is given, to the
subordination of this Note to Senior Indebtedness, and made by
a court of competent jurisdiction in a reorganization
proceeding under any applicable bankruptcy or reorganization
law, no payment or delivery of such cash, property, stock,
interests or obligations payable or deliverable with respect
to this Note shall be make to the holders of Senior
Indebtedness, provided that this clause (a) shall cease to be
applicable and shall be deemed no longer included herein if at
any time the Senior Subordinated Notes are outstanding and a
provision comparable to this clause (a) is no longer included
in the subordination provisions thereof; and
(b) no such delivery shall be made to holders of
Senior Indebtedness of stock, partnership interests or
obligations which are issued pursuant to reorganization
proceedings or dissolution or liquidation proceedings, or upon
any merger, consolidation, sale, lease, transfer or other
disposal not prohibited by the provisions of the Securities
Purchase Agreement, by Maker, as reorganized, or by the Person
succeeding to Maker or acquiring its property and assets, if
such stock, partnership interests or obligations are
subordinate and junior at least to the extent provided in this
paragraph to the payment of any stock or obligations which are
issued in exchange or substitution for any Senior Indebtedness
then outstanding.
(v) If any payment or distribution of any character, whether
in cash, securities or other properties, shall be received by Lender in
contravention of this paragraph 14 and before all Senior Indebtedness
shall have been paid in full, such payment or distribution shall be
held in trust for the benefit of, and shall be forthwith paid over and
delivered to, the holders of Senior
B-13
<PAGE> 35
Indebtedness, or their representative(s) or trustee(s) acting on their
behalf (pro rata as to each such holder, representative or trustee on
the basis of the respective amounts of unpaid Senior Indebtedness held
or represented by each at the time of such payment), as their
respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in full in accordance with its terms, after giving
effect to any concurrent payment or distribution or provision therefor
to the holders of Senior Indebtedness.
(b) Obligation of Maker Unconditional. The provisions
of this paragraph 14 are for the purpose of defining the
relative rights of the holders of Senior Indebtedness on the
one hand, and Lender on the other hand, against Maker and its
property, and nothing herein shall impair, as between Maker
and Lender, the obligation of Maker, which is unconditional
and absolute, to pay to the holder hereof the principal
thereof and interest thereon in accordance with the provisions
hereof (including, without limitation, all principal and
interest payments due or accruing after any of the events
described in subparagraph (iii) of paragraph 14(a) above), nor
shall anything herein prevent Lender from exercising all
remedies otherwise permitted by applicable law or hereunder
upon default hereunder, subject to the right, if any, under
this paragraph of holders of Senior Indebtedness to receive
cash, property, stock, partnership interests or obligations
otherwise payable or deliverable to Lender; provided, however,
that upon the commencement and during the continuance of a
Standstill Period, Lender (to the extent it is otherwise
entitled to do so) will not accelerate the maturity of this
Note or pursue any other remedy to enforce payment thereof
(except with respect to an event of default specified in
clause (i) of paragraph 10) or initiate any bankruptcy or
insolvency proceeding relative to Maker unless and until the
earlier of (i) the end of such Standstill Period, (ii) the
acceleration of, or a default in the payment at the final
stated maturity or when
B-14
<PAGE> 36
required to be repaid pursuant to Section 5F of the Securities
Purchase Agreement of, any obligation referred to in clause
(g) of paragraph 10 hereof or any other obligation or
obligations (aggregating $2,500,000 or more in principal
amount) referred to in clause (h) of paragraph 10 hereof.
(c) Subrogation. Upon payment in full of Senior
Indebtedness, Lender shall be subrogated to the rights of the
holders of the Senior Indebtedness to receive payments or
distributions of assets of Maker made on Senior Indebtedness
until the principal of and interest on this Note shall be paid
in full, and, for the purposes of such subrogation, no
payments to the holders of Senior Indebtedness of any cash,
property, stock, partnership interests or obligations to which
Lender would be entitled except for the provisions of
subparagraph (iv) of paragraph 14(a) above shall, as between
Maker, its creditors (other than the holders of Senior
Indebtedness) and Lender, be deemed to be a payment by Maker
to or on account of Senior Indebtedness.
(d) Rights of Holders of Senior Indebtedness. The
provisions of this paragraph 14 shall be deemed a continuing
offer to all holders of Senior Indebtedness to act in reliance
on such provisions (but no such reliance shall be required to
be proven to receive the benefits hereof) and may be enforced
by such holders and no right of any present or future holders
of any Senior Indebtedness to enforce subordination as
provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of Maker or
by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by Maker with the terms of
this Note, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with, and no purported
change in the provisions of this paragraph 14 shall be
effective as against any holder of Senior Indebtedness
existing at the time of such change without the consent of
such holder. Without in any way limiting the generality of the
foregoing, the holders of Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to
Lender, and
B-15
<PAGE> 37
without impairing or releasing the subordination provided in
this paragraph 14 or the obligations hereunder of Lender to
the holders of Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, or waive
defaults under, or take additional guarantees or collateral
for the benefit of, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any
Person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any
rights against Maker and any other Person. The provisions of
this paragraph 14 shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any
part thereof, of any of Senior Indebtedness is rescinded or
must otherwise be restored or returned by the holders of
Senior Indebtedness upon the insolvency, bankruptcy.
dissolution. liquidation or reorganization of Maker or upon or
as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, Maker or
any substantial part of its property, or otherwise, all as
though such payments had not been made.
(e) Agreement to Effectuate Subordination. Lender
agrees to take such reasonable action as may be requested by
the holders of Senior Indebtedness to effectuate the
subordination provided in this paragraph 14, at the expense of
such holders of Senior Indebtedness, including, in the event
of any dissolution, winding up, liquidation or reorganization
of Maker (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors
or otherwise) tending toward liquidation of the business and
assets of Maker, the immediate filing of a claim for the
unpaid balance of this Note in the form required in said
proceedings and the taking of all reasonable steps necessary
to cause said claim
B-16
<PAGE> 38
to be approved. If any such holder does not file a proper
claim or proof of debt in the form required in such
proceedings prior to 30 days before the expiration of the time
to file such claim or claims, then at any time 15 days after
sending written notice to such holder (to its last known
address, if any) by certified mail, postage prepaid, return
receipt requested, the holders of Senior Indebtedness are
hereby authorized to have the right to file and are hereby
authorized to file an appropriate claim for and on behalf of
Lender.
(f) For the purpose of this Note:
"Credit Agreement" shall mean the Credit Agreement dated as of even
date herewith by and among the Company, as borrower, American, as guarantor, and
The Prudential Insurance Company of America, as lender, or any agreement
refunding, refinancing, renewing, or taking the place of the Credit Agreement;
provided, however, that any such agreement refunding, refinancing, renewing or
taking the place of the Credit Agreement shall be limited to a maximum principal
amount which may be outstanding thereunder of $20,000,000, and provided further,
that only one Credit Agreement may exist at one time and that (subject to the
foregoing) any agreement providing for revolving credit borrowings entered into
within 3 months subsequent to the expiration or termination of a prior Credit
Agreement and designated by the Company as refunding, refinancing, renewing or
taking the place of the Credit Agreement shall be conclusively presumed to be an
agreement refunding, refinancing, renewing or taking the place of the Credit
Agreement.
"Senior Indebtedness" shall mean and include all obligations (whether
now outstanding or hereafter incurred), for the payment of which Maker is
responsible or liable as obligor, guarantor or otherwise in respect of (i) all
payment obligations under or in respect of the Senior Notes and Senior
Subordinated Notes and under the Securities Purchase Agreement, including,
without limitation,
B-17
<PAGE> 39
principal, interest, premium, fees, expenses and indemnities, whether now owing
or hereafter incurred (including any interest accruing subsequent to the
commencement of a proceeding described in paragraph 14(a)(iii), regardless of
whether the claims of holders of such payment obligations for such interest are
allowed in any such proceeding), (ii) all payment obligations under or in
respect of the Senior Revolving Notes and Credit Agreement, including, without
limitation, principal, interest, fees, reimbursement obligations under letters
of credit, expenses and indemnities, whether now owing or hereafter incurred
(including any interest accruing subsequent to the commencement of a proceeding
described in paragraph 14(a)(iii), regardless of whether the claims of holders
of such payment obligations for such interest are allowed in any such
proceeding), (iii) all obligations in respect of other Debt of Maker (including
reimbursement obligations under letters of credit) incurred in compliance with
the provisions of Section 6C(2)(vi) of the Securities Purchase Agreement and
which is designated as Senior Indebtedness for the purposes of the Securities
Purchase Agreement at the time of incurrence thereof, or the time of entering
into the agreement providing for the same, as evidenced by a notice to such
effect delivered to Lender and to the holders of the Senior Subordinated Notes
within 30 days after such incurrence or the entering of any such agreement.
15. No Waiver. To the fullest extent permitted by applicable law, no
failure to exercise and no delay on the part of Lender in exercising any power
or right in connection herewith or any other document or instrument now or
hereafter existing and executed as security herefor or otherwise in connection
herewith shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.
B-18
<PAGE> 40
16. Notices. Any notice required or permitted to be delivered to Maker
by Lender shall be deemed delivered upon receipt on a Business Day of such
notice by American Oil and Gas Corporation at its corporate headquarters in
Houston, Texas by certified mail or overnight courier delivery, or facsimile
transmission, addressed to the attention of the General Counsel. Any notice
required or permitted to be delivered to Lender by Maker or a holder of Senior
Indebtedness shall be deemed delivered upon receipt on a Business Day of such
notice by Cabot Corporation at its corporate headquarters in Waltham,
Massachusetts by certified mail or overnight courier delivery, or facsimile
transmission (Fax No.: (617) 622-3703 or -3704), addressed to the attention of
the Treasurer, or at such other address as Cabot shall specify by notice to
Maker as aforesaid and by like notice given to each holder of the Senior Notes,
the Senior Subordinated Notes and the Senior Revolving Notes. For purposes of
giving notice of a change of address to the holders of Senior Notes, Senior
Subordinated Notes and Senior Revolving Notes as provided in the preceding
sentence. Cabot shall be entitled to rely on a certificate of Maker as to the
identity and addresses of such holders (which Maker agrees to supply to Cabot
forthwith upon request).
17. Successors and Assigns. The terms and provisions hereof shall be
binding upon and inure to the benefit of Maker and Lender and their respective
successors and assigns.
18. Governing Law. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT UNDER THE
LAWS OF THE STATE OF TEXAS AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE AND, WHEN APPLICABLE, THE UNITED
STATES OF AMERICA.
AMERICAN PIPELINE COMPANY
By: _____________________________________
Title: __________________________________
B-19
<PAGE> 41
SCHEDULE I TO REVOLVING CREDIT NOTE
The "Floating Rate" under this Note shall be LIBOR plus an applicable
margin as indicated on the following chart. The applicable LIBOR rate shall be
floating, adjusting on the first day of each calendar month, based upon the one
month LIBOR rate as quoted in the first Wall Street Journal of such month and
such rate shall remain fixed for that month. The margin shall be adjusted on the
first day of each month according to the rating given Cabot Corporation's senior
unsecured debt by Standard & Poor's Corporation effective on such day and
according to the passage of time as follows:
<TABLE>
<CAPTION>
Standard & Poor's 1993-
Rating 1989-1990 1991-1992 Forward
- ----------------- --------- --------- -------
<S> <C> <C> <C>
BBB + + 0.675% + 0.80% + 0.925%
or higher
BBB + 0.925% + 1.05% + 1.175%
or BBB -
BB + + 1.175% + 1.30% + 1.425%
or less
</TABLE>
If Cabot has no such rating on the first day of a calendar month, the rating
used will be the last available published rating. With the exception of the
requirements of Regulation D promulgated by the Federal Reserve Board, if Cabot
Corporation is charged or has clear evidence that it would be charged for
increased costs under a LIBOR-based revolving credit agreement to which it is
now or becomes a party, it may pass on those costs to Maker to the extent it
evidences same.
<PAGE> 42
SCHEDULE II TO REVOLVING CREDIT NOTE
<TABLE>
<CAPTION>
Nature of Advance or Unpaid Name of
Repayment Principal Person
Amount of Principal (Working Capital Balance of Making
Date Advance Repaid or Basket) Note Notation
- ---- --------- --------- -------------------- ---------- --------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 43
Appendix C to
Basket Agreement
GUARANTY AGREEMENT
This Guaranty Agreement, executed as of November 13, 1989, between
AMERICAN OIL AND GAS CORPORATION, a Delaware corporation (the "Guarantor"), and
CABOT CORPORATION, a Delaware corporation ("Cabot");
W I T N E S S E T H:
WHEREAS, the Guarantor and Cabot have executed a Basket Agreement,
dated as of November 13, 1989 (the "Basket Agreement"), by and among the
Guarantor, American Pipeline Company, a Delaware corporation and wholly-owned
subsidiary of the Guarantor ("Pipeline"), Cabot and Cabot Transmission
Corporation, a Delaware corporation and an indirect wholly-owned subsidiary of
Cabot ("Transmission");
WHEREAS, pursuant to its obligation under the Basket Agreement,
Pipeline has executed and delivered a Revolving Credit Note in the principal
amount of $25,000,000 (the "Revolving Credit Note");
WHEREAS, Pipeline is the maker (the "Maker") under the Revolving Credit
Note; and
<PAGE> 44
WHEREAS, this Guaranty Agreement is required as a condition to the
extension of credit by Cabot to the Maker pursuant to the Revolving Credit Note.
NOW, THEREFORE, the Guarantor and Cabot agree as follows:
1. Capitalized Terms. Capitalized terms not otherwise defined herein
shall have the same meaning ascribed to them in the Revolving Credit Note.
2.1 The Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to Cabot the due and punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the Maker now or
hereafter existing under, evidenced by or arising out of the Revolving Credit
Note, whether for principal, interest or otherwise (such obligations being the
"Obligations"). In case of failure by the Maker punctually to pay any of the
obligations, the Guarantor hereby unconditionally agrees to cause such payment
to be made punctually as and when the same shall become due and payable, whether
at stated maturity, by acceleration or otherwise.
2.2 Guaranty Absolute. The Guarantor guarantees that the Obligations
will be paid strictly in accordance with the terms of the Revolving Credit Note,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Cabot with respect
thereto. The obligations of the Guarantor hereunder are
2
<PAGE> 45
independent of the Obligations, and, to the fullest extent permitted by law, a
separate action or actions may be brought and prosecuted against the Guarantor
to enforce this Guaranty Agreement, irrespective of whether any action is
brought against the Maker or whether the Maker is joined in any such action or
actions. To the fullest extent permitted by applicable law, the liability of the
Guarantor hereunder shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Revolving
Credit Note or any other agreement or instrument relating thereto; or
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to departure from the Revolving
Credit Note, including, without limitation, any increase in the
Obligations resulting from the extension of additional credit to the
Maker or any of its subsidiaries or otherwise; or
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Obligations; or
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Obligations
or any other assets of the Maker or any of its Subsidiaries; or
3
<PAGE> 46
(e) any change, restructuring or termination of the corporate
structure or existence of the Maker or any of its Subsidiaries; or
(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Maker or a guarantor.
If at any time any payment of any of the Obligations is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Maker or otherwise, the Guarantor's obligations hereunder with respect to
such payment shall be reinstated at such time as though such payment had become
due but had not been made at such time.
2.3 Subordination. (a) Anything in this Guaranty Agreement to the
contrary notwithstanding, the indebtedness of the Guarantor evidenced by this
Guaranty Agreement in respect of principal of and interest on the Revolving
Credit Note (the "Subordinated Indebtedness") shall be subordinated and junior
to the extent set forth in subparagraphs (b) to (f), inclusive, below to all
obligations of the Guarantor (as a guarantor or otherwise) in respect of Senior
Indebtedness (as defined in the Revolving Credit Agreement).
(b) Upon any distribution to creditors of the Guarantor in a voluntary
or involuntary liquidation or dissolution of the Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Guarantor or its property:
4
<PAGE> 47
(i) the holders of Senior Indebtedness shall be entitled to
receive payment in full, in cash or in a manner satisfactory to each of
the holders, respectively, of Senior Indebtedness, of all amounts on or
in respect of the Senior Indebtedness before any holder of the
Subordinated Indebtedness shall be entitled to receive any payment or
distribution of any kind or character on account of the principal and
interest on the Subordinated Indebtedness; and
(ii) until the Senior Indebtedness is paid in full, in cash or
cash equivalents, any payment or distribution, to which a holder of
Subordinated Indebtedness would be entitled but for this Section 2.3(b)
shall be made to the holders of Senior Indebtedness, as their interests
may appear.
Upon any distribution of assets of the Guarantor, the holders of
Subordinated Indebtedness shall be entitled to rely upon any order or decree of
a court of competent jurisdiction in which such proceedings are pending for the
purposes of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Section 2.3(b),
and the holders of Subordinated Indebtedness shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to the holders of Subordinated Indebtedness for the purposes of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness, the amount thereof or payable thereon, the
5
<PAGE> 48
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 2.3(b); provided, however, that the foregoing shall
apply only if such court, trustee, liquidating trustee or other person has been
fully apprized of the provisions of this Section 2.3(b) and of Section 2.3(c).
In the event that a holder of Subordinated Indebtedness 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 distribution
pursuant to this Section 2.3(b), such holder of Subordinated Indebtedness may
request such person (at the expense of such holder of Subordinated Indebtedness)
to furnish evidence to the reasonable satisfaction of such holder of
Subordinated Indebtedness as to the amount of such 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 Section 2.3(b), and if such evidence is not furnished,
such holder of Subordinated Indebtedness may defer any payment to such person,
and will retain such amount in trust, pending judicial determination as to the
right of such person to receive payment.
(c) (i) Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, then all principal of, premium, if any, and interest
on all such matured Senior Indebtedness shall first be paid is full, or such
payment shall have been provided for in cash or in a manner satisfactory to each
of the holders, respectively, of such matured Senior Indebtedness, before any
payment on account of principal or interest is made by the Guarantor on the
Subordinated Indebtedness.
6
<PAGE> 49
(ii) No payment shall be made by the Guarantor on the Subordinated
Indebtedness during the period in which paragraph 14(a)(iii) of the Revolving
Credit Note shall be applicable or during any Standstill Period in effect under
paragraph 14(a)(ii) of the Revolving Credit Note.
(iii) In the event that notwithstanding the provisions of this Section
2.3(c), the Guarantor shall make any payment to a holder of Subordinated
Indebtedness on account of this Guarantee Agreement in violation of Section
2.3(c)(i) or Section 2.3(c)(ii), then such payment shall be held in trust for
the benefit of, and shall be forthwith paid over and delivered to, the holders
of Senior Indebtedness, or their representative(s) or trustee(s) acting on their
behalf (pro rata as to each such holder, representative or trustee on the basis
of the respective amounts of unpaid Senior Indebtedness held or represented by
each at the time of such payment), as their respective interests may appear, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution or
provision therefor to or for the holders of Senior Indebtedness.
(d) Upon payment in full of Senior Indebtedness, the holders of
Subordinated Indebtedness shall be subrogated to the rights against the
Guarantor of the holders of Senior Indebtedness to receive payments from or
distributions of assets of the Guarantor applicable to Senior Indebtedness to
the extent that such payments or distributions otherwise payable to the holders
of Subordinated Indebtedness have been paid or applied to the payment of Senior
7
<PAGE> 50
Indebtedness. A payment or distribution made by the Guarantor under this
Section 2.3 to the holders of Senior Indebtedness that otherwise (except for the
provisions of this Section 2.3) would have been made to the holders of
Subordinated Indebtedness is not, as between the Guarantor, its creditors (other
than the holders of Senior Indebtedness) and the holders of the Subordinated
Indebtedness, payment by the Guarantor under this Guaranty Agreement.
(e) The provision of this Section 2.3 are for the purpose of defining
the relative rights of the holders of Senior Indebtedness on the one hand, and
the holders of Subordinated Indebtedness on the other hand with respect to the
Guarantor, and nothing herein shall impair, as between the Guarantor and Cabot,
the obligation of the Guarantor, which is unconditional and absolute, to pay the
Subordinated Indebtedness in accordance with the terms of this Guaranty
Agreement, nor shall anything herein prevent Cabot from exercising all remedies
otherwise permitted by applicable law hereunder, subject to the provisions of
Section 2.3(c)(ii) and provided, however, that upon the commencement and during
the continuance of a Standstill Period in effect under Paragraph 14(a)(ii) of
the Revolving Credit Note, Cabot (to the extent it is otherwise entitled to do
so) will not pursue any remedy to enforce payment under this Guaranty Agreement
(except with respect to an event of default specified in clause (i) of paragraph
10 of the Revolving Credit Note) or initiate any bankruptcy or insolvency
proceeding relative to the Guarantor unless and until the earlier of (i) the end
of such Standstill Period, (ii) the acceleration of, or a default in the payment
at the final stated maturity or when required to be repaid pursuant to Section
5F of the Securities Purchase Agreement of, any obligation referred to in clause
(g) of paragraph 10 of the Revolving Credit Note or any other obligation or
obligations (aggregating
8
<PAGE> 51
$2,500,000 or more in principal amount) referred to in clause (h) of paragraph
10 of the Revolving Credit Note.
(f) The provisions of this Section 2.3 shall be deemed a continuing
offer to all holders of Senior Indebtedness to act in reliance on such
provisions (but no such reliance shall be required to be proven to receive the
benefits hereof) and may be enforced by such holders and no right of any present
or future holders of any Senior Indebtedness to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Guarantor or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Guarantor
with the terms of this Guaranty Agreement, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with, and no purported
change in the provisions of this Section 2.3 shall be effective as against any
holder of Senior Indebtedness existing at the time of such change without the
consent of such holder. Without in any way limiting the generality of the
foregoing, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to Cabot, and without impairing or
releasing the subordination provided in this Section 2.3 or the obligations
hereunder of Cabot to the holders of Senior Indebtedness, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, or waive defaults under, or take
additional guarantees or collateral for the benefit of, Senior Indebtedness, or
otherwise amend or supplement in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged
9
<PAGE> 52
or otherwise securing Senior Indebtedness; (iii) release any person liable in
any manner for the collection of Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Maker and any other person. The
provisions of this Section 2.3 shall continue to be effective, or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any of
Senior Indebtedness by the Guarantor is rescinded or must otherwise be restored
or returned by the holders of Senior Indebtedness upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Guarantor or upon
or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
(g) Cabot agrees to take such reasonable action as may be requested by
the holders of Senior Indebtedness to effectuate the subordination provided in
this Section 2.3, at the expense of such holders of Senior Indebtedness,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Guarantor (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise) tending toward liquidation of the business and assets of the
Guarantor, the immediate filing of an appropriate claim for the maximum amount
for which Cabot in good faith determines it is entitled to file under applicable
law, is the form required in said proceedings and the taking of all reasonable
steps necessary to cause said claim to be approved. If any such holder does not
file a proper claim or proof of debt in the form required in such proceedings
prior to 30 days before the expiration of the time to file such claim or claims,
then at any time 15 days after sending written notice to such holder (to its
last known address, if any) by certified mail, postage prepaid, return
10
<PAGE> 53
receipt requested, the holders of Senior Indebtedness are hereby authorized to
have the right to file and are hereby authorized to file an appropriate claim
for and on behalf of Cabot.
2.4 Waiver. The Guarantor irrevocably waives promptness, diligence,
notice of acceptance and to the fullest extent permitted by law, any other
notice with respect to any of the Obligations and this Guaranty Agreement and
any requirement that any holder of the Revolving Credit Note protect, secure,
perfect or insure any security interest or lien or any property subject thereto
or exhaust any right or take any action against the Maker or any other person or
entity or any collateral. To the fullest extent permitted by applicable law, the
Guarantor specifically waives any rights it may have pursuant to Rule 31, Texas
Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice and
Remedies Code and any requirements imposed by Chapter 34 of the Texas Business
and Commerce Code.
2.5 Subrogation. Upon the making by the Guarantor of any payment
hereunder for the account of the Maker, the Guarantor shall be subrogated to the
rights of the payee against the Maker with respect to such payment to the
fullest extent permitted by law, provided that the Guarantor shall not enforce
any payment by way of subrogation until all amounts of principal of and interest
on the Revolving Credit Note have been paid in full.
2.6 Stay of Acceleration. If acceleration of the time for payment of
any amount payable under the Revolving Credit Note is stayed upon the
insolvency, bankruptcy or reorganization of the Maker, all such amounts
otherwise subject to acceleration under the terms
11
<PAGE> 54
of the Revolving Credit Note shall nonetheless by payable by the Guarantor
hereunder forthwith on demand by Cabot.
3.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given (i) when delivered personally, (ii) when
received if sent by registered or certified mail, return receipt requested, or
delivery service or (iii) when received by facsimile transmission, in each case
to the parties at the following addresses (or at such other address as a party
may specify by like notice):
(A) If to the Guarantor, to:
American Oil and Gas Corporation
333 Clay Street, Suite 2000
Houston, Texas 77002
Attention: David M. Carmichael
Fax: (713) 739-2963
Telephone confirmation: (713) 739-2910
(B) If to Cabot to:
Cabot Corporation
950 Winter Street
Waltham, MA 02254-9073
Attention: Perry O. Barber, Jr.
Fax: (617) 622-3703 or -3704
Telephone confirmation: (617) 622-3879
3.2 Choice of Law. THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS.
12
<PAGE> 55
3.3 Headings. The headings contained in this Guaranty Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Guaranty Agreement.
3.4 Amendments, Etc. No amendment or waiver of any provision of this
Guaranty Agreement nor consent to any departure by the Guarantor herefrom shall
in any event be effective unless the same shall be in writing and signed by
Cabot.
3.5 Assignment. The Guarantor shall not assign this Guaranty Agreement
or any part thereof without the prior written consent of Cabot. This Guaranty
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
3.6 Severability. If any term or other provision of this Guaranty
Agreement is or shall become invalid, illegal or incapable of being enforced in
any jurisdiction, all other conditions and provisions of this Guaranty Agreement
shall nevertheless remain in full force and effect in such jurisdiction and such
illegal, invalid or unenforceable provision shall be legal, valid and
enforceable in all other jurisdictions.
3.7 Counterparts. This Guaranty Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together slsall constitute but one and the same agreement.
13
<PAGE> 56
IN WITNESS WHEREOF, the undersigned have executed this Guaranty
Agreement as of the date first written above.
AMERICAN OIL AND GAS
CORPORATION
By:
Name:
Title:
CABOT CORPORATION
By:
Name:
Title:
14
<PAGE> 57
Appendix D
to Basket Agreement
RESIDUE GAS PURCHASE AGREEMENTS
1. Residue Gas Purchase Agreement dated June 30, 1989 between Cabot Energy
Marketing Corporation ("CEMCO") and Cabot Gas Processing Corporation.
2. Residue Gas Purchase Agreement dated June 30, 1989 between Cabot Gas Supply
Corporation ("CGSC") and Cabot Gas Processing Corporation.
<PAGE> 58
APPENDIX E
ALTERNATIVE GAS PURCHASE SOURCES
Ward Petroleum - State of Oklahoma
Oklahoma Natural - State of Oklahoma
Maxus Energy - McKee Plant, Moore County, Texas
Kerr-McGee - Hobart Plant, Hemphill County, Texas
Phillips Petroleum Co. - Goldsmith Plant, Ector County, Texas
Headlee Unit - Ector County, Texas
<PAGE> 1
EXHIBIT 10(j)
FIRST AMENDMENT TO
AMENDED AND RESTATED OMNIBUS ACQUISITION AGREEMENT
AND AMENDED AND RESTATED BASKET AGREEMENT
This First Amendment to Amended and Restated Omnibus Acquisition
Agreement and Amended and Restated Basket Agreement dated March 31, 1992 is
entered into among the parties to that certain Amended and Restated Omnibus
Acquisition Agreement (the "Omnibus Agreement") dated November 13, 1989, by and
among Cabot Corporation ("Cabot"), Cabot Transmission Corporation ("Seller")
and American Oil and Gas Corporation ("AOG"), and that certain Amended and
Restated Basket Agreement dated as of November 13, 1989, as amended and
restated as of June 30, 1990, by and among Seller, Cabot, AOG and American
Pipeline Company (the "Basket Agreement");
WHEREAS, the parties to the Omnibus Agreement and the Basket Agreement
believe that it is mutually beneficial and desire to amend certain provisions
of each such Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendments to Omnibus Agreement. The Omnibus Agreement is
hereby amended to delete Item No. 1 to Schedule 11.07 of the Omnibus Agreement.
The effect of such deletion shall be that Cabot shall no longer indemnify AOG,
the Acquired Companies (as defined in the Omnibus Agreement) and the other
enumerated persons and entities under Section 11.07(A) of the Omnibus Agreement
for those matters described in Item No. 1 to Schedule 11.07 of the Omnibus
Agreement.
Section 2. Amendments to Basket Agreement.
(a) Section 2.6 of the Basket Agreement, which defines the term
"Basket Payments," is hereby amended as follows:
(i) by deleting the word "and" immediately prior to clause
(iii) of Section 2.6 and inserting a comma in its place;
(ii) by replacing the period at the end of Section 2.6 with a
comma and inserting the following at the end of Section 2.6:
"(iv) all payments made after March 31, 1992, with
respect to all periods prior to November 13, 1989, by AOG or
its subsidiaries or affiliates to potential claimants
referenced in Schedule I to the First Amendment
<PAGE> 2
to Amended and Restated Omnibus Acquisition Agreement and
Amended and Restated Basket Agreement dated March 31, 1992
(the "First Amendment"), their subsidiaries, affiliates or
successors in interest ("Schedule I Claimants") in respect of
any potential claims (including possible claims for higher
prices and potential claims for refund) described in such
Schedule I (the "Schedule I Claims"), under the respective
contracts described in Schedule I in excess of the prices
previously paid to such Schedule I Claimants by AOG, its
subsidiaries, affiliates or predecessors in interest,
including payments arising out of any applicable tax
reimbursements and/or royalty claims which may arise as a
result of such payments of higher prices, (v) all payments
made after March 31, 1992, with respect to all periods after
November 12, 1989, by AOG, its subsidiaries or affiliates to
Schedule I Claimants in respect of the Schedule I Claims for
amounts in excess of (x) the Section l06(b)(1)(A) gas price
in effect from time to time under the Natural Gas Policy Act
of 1978 and related regulations through December 31, 1992 and
(y) that price which is paid in good faith for periods after
December 31, 1992 to the Schedule I Claimants under the
respective gas contracts described in Schedule I, including
any payment arising out of applicable tax reimbursement
obligations and/or royalty claims which may arise as a result
of such payments of higher prices, (vi) any payments arising
out of royalty claims, which payments are made after March
31, 1992 by AOG, its subsidiaries or affiliates with respect
to Schedule I Claims which were settled prior to March 31,
1992 with Cabot's approval but which settlements expressly
did not resolve the royalty claim issues, (vii) all payments
or refunds (including without limitation payments arising out
of royalty claims related in any way to such payments) which
AOG, its subsidiaries, or affiliates may become legally
obligated to make in respect
-2-
<PAGE> 3
of the Schedule I Claims and not covered by clauses (iv)
through (vi) hereof, and (viii) all outside legal,
professional or other out-of-pocket expenses or costs
incurred by AOG, its subsidiaries or affiliates after March
31, 1992, in connection with the investigation, analysis,
negotiation, litigation, arbitration or settlement of any of
the Schedule I Claims, potential Schedule I Claims or any and
all of the matters identified in clauses (iv) through (vii)
hereof, including without limitation the costs of preparing
gas reserve reports covering gas production and reserves
produced under the respective gas contracts described in
Schedule I hereto.
(b) Section 2.3 of the Basket Agreement, which defines the term
"Basket Collections," is hereby amended as follows:
(i) by deleting the word "and" at the end of the first
clause (ii) of Section 2.3;
(ii) by replacing the period at the end of the first
clause (iii) of Section 2.3 with a semicolon followed by the word "and"; and
(iii) adding the following immediately after the first
clause (iii) of Section 2.3:
"(iv) the amortization in the actual weighted
average cost of gas used in billing customers or other
recovery by flow-through to customers or liquidation or
recovery in any other manner of the payments, refunds,
expenses or costs described in clauses (iv) through (viii) of
Section 2.6 hereof.
(c) Section 7 of the Basket Agreement is hereby amended by inserting
the following clause immediately following the term "Take or Pay Claims" in
each place where such term appears in Section 7:
"or Schedule I Claims (as such term is defined in Section
2.6), together with all related claims described in clauses
(iv) through (viii) of Section 2.6 hereof"
Section 3. Effect of Amendments. The respective amendments to the
Omnibus Agreement and Basket Agreement set forth in this First Amendment (i)
-3-
<PAGE> 4
shall be effective as of the date hereof and (ii) shall remain subject to all
other effective provisions of the agreement being amended hereby.
Section 4. Counterparts. This First Amendment may be executed by the
parties hereto in multiple counterparts, all of which counterparts, taken
together, shall constitute one and the same agreement.
CABOT CORPORATION
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
CABOT TRANSMISSION CORPORATION
By: /s/ Robert A. [NOT LEGIBLE]
--------------------------------
Name: Robert A. [NOT LEGIBLE]
-------------------------------
Title: Vice President
-------------------------------
AMERICAN OIL AND GAS CORPORATION
By: /s/ Thomas H. Fanning
--------------------------------
Name: Thomas H. Fanning
--------------------------------
Title: Vice President
--------------------------------
AMERICAN PIPELINE COMPANY
By: /s/ Thomas H. Fanning
--------------------------------
Name: Thomas H. Fanning
--------------------------------
Title: Vice President
--------------------------------
-4-
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer or director of
Kinder Morgan Inc., a Kansas corporation, (the "Company"), hereby constitutes
and appoints Joseph Listengart and C. Park Shaper, and each of them (with full
power to each of them to act alone), the undersigned's true and lawful
attorney-in-fact and agent, for the undersigned and on the undersigned's behalf
and in the undersigned's name, place and stead, in any and all capacities, to
sign, execute and file with the Securities and Exchange Commission an amendment
to the Company's Annual Report on Form 10-K/A for the fiscal year ended December
31, 2000, together with all amendments thereto, with all exhibits and any and
all documents required to be filed with respect thereto, including a Form S-3,
with any regulatory authority, granting unto said attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 20th day of April, 2000.
/s/ William V. Morgan /s/ Ted A. Gardner
- ------------------------------- -------------------------------
William V. Morgan Ted A. Gardner
/s/ Richard D. Kinder /s/ William J. Hybl
- ------------------------------- -------------------------------
Richard D. Kinder William J. Hybl
/s/ C. Park Shaper /s/ Edward Randall, III
- ------------------------------- -------------------------------
C. Park Shaper Edward Randall, III
/s/ Edward H. Austin, Jr. /s/ Fayez Sarofim
- ------------------------------- -------------------------------
Edward H. Austin, Jr. Fayez Sarofim
/s/ Charles W. Battey /s/ H.A. True, III
- ------------------------------- -------------------------------
Charles W. Battey H.A. True, III
/s/ Stewart A. Bliss
- -------------------------------
Stewart A. Bliss
