<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 2, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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APACHE CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE NO. 41-0747868
(State of incorporation) (I.R.S. Employer
Identification Number)
ONE POST OAK CENTRAL Z. S. KOBIASHVILI
2000 POST OAK BOULEVARD, SUITE 100 ONE POST OAK CENTRAL
HOUSTON, TEXAS 77056-4400 2000 POST OAK BOULEVARD, SUITE 100
(713) 296-6000 HOUSTON, TEXAS 77056-4400
(Address, including zip code, and (713) 296-6000
telephone number, including area code, of (Name, address, including zip code, and
registrant's executive offices) telephone
number, including area code, of agent for
service)
</TABLE>
Copies to:
<TABLE>
<S> <C>
RALPH K. MILLER, JR. CRAIG E. CHAPMAN
WOODARD HALL & PRIMM, P.C. BROWN & WOOD
7100 TEXAS COMMERCE TOWER ONE WORLD TRADE CENTER
HOUSTON, TEXAS 77002 NEW YORK, NEW YORK 10048-0557
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 ("Securities Act"), other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
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PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(3) PER UNIT(1) PRICE FEE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities and Special Mandatory
Purchase Right(2).................... $250,000,000 100% $250,000,000 $86,307
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Subject to note (3) below, there are being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt Securities
are being issued at an original issue discount, then the offering price
shall be in such greater principal amount as shall result in an aggregate
initial offering price not to exceed $250,000,000 less the dollar amount of
any securities previously issued hereunder. In the event the Registrant
elects to offer to the public Debt Securities which include any Special
Mandatory Purchase Right, no separate consideration shall be paid for such
Mandatory Purchase Right.
(3) In no event will the aggregate initial offering price of all Debt Securities
issued from time to time pursuant to this Registration Statement exceed
$250,000,000. Any Debt Securities registered hereunder may be sold
separately or as units with other Debt Securities registered hereunder.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED NOVEMBER 2, 1995
PROSPECTUS
$250,000,000
APACHE CORPORATION
DEBT SECURITIES
Apache Corporation (the "Company" or "Apache") intends from time to time to
issue senior unsecured debt securities ("Debt Securities") in one or more
series, consisting of (a) Debt Securities with interest rates that may be
periodically established by a remarketing agent selected by the Company
("Remarketed Notes") or (b) any other Debt Security, or any combination of the
foregoing, at an aggregate initial offering price not to exceed $250,000,000, at
prices and on terms to be determined at or prior to the time of sale. The
specific designation, aggregate principal amount, maturity, interest rate or
method for determining interest rate, method of distribution, any remarketing or
refunding provisions, and any exchangeability, conversion, redemption or
prepayment and any other variable terms with regard to the Debt Securities in
respect of which this Prospectus is delivered will be, to the extent not set
forth herein, set forth in an accompanying Prospectus Supplement.
Unless otherwise specified herein or in the applicable Prospectus
Supplement, Debt Securities will be issued in fully registered book-entry form
and will be registered in the name of The Depository Trust Company, as
depository ("DTC"), or its nominee. Interests in the Debt Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants. Debt Securities issued in book-entry
form will not be issuable as certificated securities except as specified herein
or in the applicable Prospectus Supplement. See "DTC Book-Entry Only System."
Payment of the principal of and interest on the Debt Securities will be
made to DTC if and so long as DTC or its nominee is the registered owner of the
Debt Securities. The disbursement of such payments to beneficial owners of the
Debt Securities ("Beneficial Owners") will be the responsibility of the DTC
Participants and the Indirect Participants, all as defined and more fully
described in this Prospectus under the caption "DTC Book-Entry-Only System."
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities will be subject to redemption at the option of the Company prior
to maturity as set forth herein and in the applicable Prospectus Supplement. See
"Description of Debt Securities." The applicable Prospectus Supplement will also
contain information, where applicable and to the extent not set forth herein,
concerning certain United States federal income tax considerations relating to,
and any listing on a securities exchange of, the Debt Securities covered by such
Prospectus Supplement.
This Prospectus, appropriately supplemented, may also be delivered in
connection with any remarketing of Remarketed Notes.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Debt Securities may be sold directly by the Company to one or more
institutional purchasers, through agents designated from time to time, through
dealers or underwriters or through any combination of the above. If any agents
of the Company or any underwriters are involved in the sale of the Debt
Securities, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the Prospectus Supplement. See
"Plan of Distribution" for indemnification arrangements which the Company is
prepared to make available to underwriters and agents for the sale of the Debt
Securities.
The date of this Prospectus is , 1995
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBT SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
Apache is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "SEC"). Reports, proxy statements and other information filed by
Apache can be inspected and copied at the public reference facilities maintained
by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's
Regional Offices at Seven World Trade Center, 13th Floor, New York, New York
10048 and CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained by mail from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. In addition, reports, proxy statements and other
information concerning Apache may be inspected at the offices of the New York
Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York 10005, and
also at the offices of the Chicago Stock Exchange ("CSE"), One Financial Place,
440 S. LaSalle Street, Chicago, Illinois 60605-1070. The address of the
Company's principal executive offices and its telephone number are 2000 Post Oak
Boulevard, Houston, Texas 77056-4400 and (713) 296-6000.
The Company has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
securities offered hereby. This Prospectus does not contain all the information
set forth in the Registration Statement and the exhibits and schedules thereto,
certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The information so omitted may be obtained from the
SEC's principal office in Washington, D.C. upon payment of the fees prescribed
by the SEC. For further information, reference is hereby made to the
Registration Statement. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the SEC are not necessarily complete, and in each instance
reference is made to the copy of such document so filed, each such statement
being qualified in its entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents previously filed by the Company with the SEC
pursuant to the Exchange Act (SEC File No. 1-4300) are incorporated in and made
a part of this Prospectus:
(i) Annual Report on Form 10-K/A for the fiscal year ended December 31,
1994, filed August 2, 1995.
(ii) Quarterly Report on Form 10-Q/A for the quarter ended March 31, 1995,
filed August 4, 1995.
(iii) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995,
filed August 14, 1995.
(iv) Current Report on Form 8-K dated March 1, 1995, amended by Amendment
No. 1 on Form 8-K/A, filed March 22, 1995.
(v) Current Report on Form 8-K/A dated May 17, 1995, filed July 17, 1995.
(vi) Current Report on Form 8-K dated June 30, 1995, filed July 24, 1995.
(vii) Current Report on Form 8-K dated August 28, 1995, filed September 6,
1995.
(viii) Current Report on Form 8-K dated October 27, 1995, filed November 1,
1995.
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All documents which the Company files pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering described herein shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement contained in a document
incorporated by reference, or deemed to be incorporated by reference, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document or in any accompanying prospectus supplement modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company undertakes to provide without charge, upon the written or oral
request of any person to whom a copy of this Prospectus has been delivered, a
copy of any or all of the documents referred to above which are incorporated in
this Prospectus by reference, other than exhibits to such documents. Requests
should be directed to Cheri L. Peper, Corporate Secretary, Apache Corporation,
2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400; (713) 296-6000.
All defined terms under Rule 4-10(a) of Regulation S-X shall have their
statutorily-prescribed meanings when used in this Prospectus. Quantities of
natural gas are expressed in this Prospectus in terms of thousand cubic feet
(Mcf), million cubic feet (MMcf) or billion cubic feet (Bcf). Oil (which
includes condensate) is quantified in terms of barrels (bbls), thousands of
barrels (Mbbls) and millions of barrels (MMbbls). One barrel of oil is the
energy equivalent of six Mcf of natural gas, expressed as a barrel of oil
equivalent. Natural gas is compared to oil in terms of thousand barrels of oil
equivalent (Mboe) and in million barrels of oil equivalents (MMboe). Oil and
natural gas liquids are compared with natural gas in terms of million cubic feet
equivalent (MMcfe) and billion cubic feet equivalent (Bcfe). Daily oil and gas
production is expressed in terms of barrels of oil per day (bopd) and thousands
of cubic feet of gas per day (Mcfd), respectively. The Company's "net" working
interest in wells or acreage is determined by multiplying gross wells or acreage
by the Company's working interest therein. Unless otherwise specified, all
references to wells and acres are gross.
THE COMPANY
Apache Corporation, a Delaware corporation formed in 1954, is an
independent energy company that explores for, develops, produces, gathers,
processes and markets crude oil and natural gas. In North America, the Company's
exploration and production interests are focused on the Gulf of Mexico, the
Anadarko Basin, the Permian Basin, the Gulf Coast, the Rocky Mountains and the
Western Sedimentary Basin of Canada. Outside of North America, the Company has
exploration and production interests offshore Western Australia, and
exploration, interests in Egypt and Indonesia and offshore China and the Ivory
Coast. The Common Stock has been listed on the NYSE since 1969, and on the CSE
since 1960.
The Company holds interests in many of its North American and international
properties through operating subsidiaries, such as Apache Canada Ltd., MW
Petroleum Corporation, Apache Energy Resources Corporation, Apache Energy
Limited, Apache International, Inc. and Apache Overseas, Inc. The Company treats
all operations as one segment of business.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used to refinance
outstanding indebtedness and for other general corporate purposes. To the extent
proceeds are used to refinance outstanding indebtedness, certain terms of the
indebtedness being refinanced will be set forth in the applicable Prospectus
Supplement.
3
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RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges were as follows for the
respective periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
- ------------- ----------------------------------------
1995 1994 1994 1993 1992 1991 1990
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.05 2.35 2.34 2.37 .72 -- 3.23
</TABLE>
The Company's ratios of earnings to fixed charges were computed based on:
(A) income or losses from continuing operations before income taxes and fixed
charges (excluding capitalized amounts); and (B) fixed charges consist of
interest on indebtedness (including amounts capitalized), amortization of debt
discount and expenses and the estimated portion of rental expenses attributable
to interest. Earnings were inadequate to cover fixed charges for the year 1991
by $68.1 million and $14.8 million for the year 1992 due to write downs of the
carrying value of United States and Canadian oil and gas properties of DEK
Energy Company (formerly known as DEKALB Energy Company ("DEKALB")) and losses
incurred on the divestiture of certain of DEKALB's United States assets.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an indenture to be entered into
between the Company and, unless otherwise specified in the applicable Prospectus
Supplement, Chemical Bank, as trustee (the "Trustee") (the "Indenture"). The
Debt Securities to be offered by this Prospectus are limited to an aggregate
initial offering price not to exceed $250,000,000. However, the Indenture does
not limit the amount of Debt Securities which can be issued thereunder and
provides that additional Debt Securities of any series may be issued thereunder
up to the aggregate principal amount which may be authorized from time to time
by the Company. The payment of principal of, or premium, if any, or interest on
the Debt Securities will rank pari passu with all other unsecured unsubordinated
indebtedness of the Company. Unless otherwise indicated herein or in the
applicable Prospectus Supplement, the Debt Securities will be issued in
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
A copy of the Indenture is filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The information herein is a
summary of certain provisions of the Indenture and does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all provisions of the Indenture including the definition therein of certain
terms. The following summaries set forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will, to the extent not described herein, be described in
the Prospectus Supplement relating to such Debt Securities.
PROVISIONS APPLICABLE TO ALL DEBT SECURITIES
General
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for the following terms, to the extent permitted by the Indenture,
and other information with respect to the Debt Securities being offered thereby,
to the extent not described herein: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the percentage
of the principal amount at which such Debt Securities will be issued; (iii) the
date (or the manner of determining or extending the date or dates) on which the
principal of such Debt Securities will be payable; (iv) whether such Debt
Securities will be issued in fully registered form or in bearer form or any
combination thereof; (v) whether such Debt Securities will be issued in the form
of one or more global securities and whether such global securities are to be
issuable in a temporary global form or permanent global form; (vi) if other than
U.S. dollars, the currency or currencies or currency unit or units in which Debt
Securities may be denominated and purchased and the currency or currencies or
currency units in which principal, premium (if any) and any interest may be
payable; (vii) if the currency for which Debt Securities may be purchased or in
which principal, premium (if any) and any interest
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may be payable is at the election of the Company or the purchaser, the manner in
which such an election may be made and the terms of such election; (viii) the
rate or rates per annum at which such Debt Securities will bear interest, if
any, or the method or methods of determination of such rate or rates and the
basis upon which interest will be calculated if other than that of a 360-day
year of twelve 30-day months; (ix) the date or dates from which such interest,
if any, on such Debt Securities will accrue or the method or methods, if any, by
which such date or dates are to be determined, the date or dates on which such
interest, if any, will be payable, the date on which payment of such interest,
if any, will commence and the Regular Record Dates for such Interest Payment
Dates, if any; (x) the date or dates, if any, on or after which, or the period
or periods, if any, within which, and the price or prices at which the Debt
Securities may, pursuant to any optional redemption provisions, be redeemed at
the option of the Company or of the holder thereof and the other terms and
provisions of such optional redemption; (xi) information with respect to
book-entry procedures relating to global Debt Securities; (xii) whether and
under what circumstances the Company will pay Additional Amounts as contemplated
by Section 1004 of the Indenture (the term "interest," as used in this
Prospectus, shall include such Additional Amounts) on such Debt Securities to
any holder who is a United States Alien (as defined in the Indenture) (including
any modification to the definition of such terms contained in the Indenture as
originally executed) in respect of any tax, assessment or governmental charge
and, if so, whether the Company will have the option to redeem such Debt
Securities rather than pay such Additional Amounts (and the terms of any such
option); (xiii) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to any of such Debt
Securities; (xiv) if either or both of Section 402(2) relating to defeasance or
Section 402(3) relating to covenant defeasance shall not be applicable to the
Debt Securities of such series, or any covenants in addition to those specified
in Section 402(3) relating to the Debt Securities of such series shall be
subject to covenant defeasance, and any deletions from, or modifications or
additions to, the provisions of Article Four of the Indenture relating to
satisfaction and discharge in respect of the Debt Securities of such series;
(xv) any index or other method used to determine the amount of payments of
principal, premium (if any) and interest, if any, on such Debt Securities; (xvi)
if a trustee other than Chemical Bank is named for such Debt Securities, the
name of such trustee; and (xvii) any other specific terms of the Debt
Securities. All Debt Securities of any one series need not be issued at the same
time and all the Debt Securities of any one series need not bear interest at the
same rate or mature on the same date.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of, or premium, if any, or interest, if any,
on any series of Debt Securities is payable in foreign currencies or foreign
currency units, the restrictions, elections, tax consequences, specific terms
and other information with respect to such Debt Securities and such foreign
currencies or foreign currency units will be set forth in the applicable
Prospectus Supplement.
Other than as described below under "Limitation on Liens" and "Company's
Obligation to Purchase Debt Securities on Change in Control," the Indenture does
not contain any provision that would limit the ability of the Company to incur
indebtedness or that would afford holders of Debt Securities protection in the
event of a decline in the credit quality of the Company or a takeover,
recapitalization or highly leveraged or similar transaction involving the
Company. Reference is made to the Prospectus Supplement relating to the
particular series of Debt Securities offered thereby, to the extent not
otherwise described herein, for any information with respect to any deletions
from, modifications of or additions to the Events of Default described below or
covenants of the Company contained in the Indenture, including any addition of a
covenant or other provision providing event risk or similar protection.
Discount, Series, Maturities, Registration, and Payment
The Debt Securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate that at the
time of issuance is below market rates. See "Certain United States Federal
Income Tax Considerations" herein. Federal income tax consequences and special
considerations applicable to any such series may also be described in the
Prospectus Supplement relating thereto.
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<PAGE> 7
The Debt Securities may be issued in one or more series with the same or
various maturities. (Section 301) Debt Securities may be issued solely in fully
registered form without coupons ("Registered Securities"), solely in bearer form
with or without coupons ("Bearer Securities"), or both as Registered Securities
and Bearer Securities. (Section 301) Registered Securities may be exchangeable
for other Debt Securities of the same series, registered in the same name, for a
like aggregate principal amount in authorized denominations and will be
transferable at any time or from time to time at the aforementioned office. No
service charge will be made to the holder for any such exchange or transfer
except for any tax or governmental charge incidental thereto. If Debt Securities
of any series are issued as Bearer Securities, the applicable Prospectus
Supplement will contain any restrictions applicable to the offer, sale or
delivery of Bearer Securities and the terms upon which Bearer Securities of the
series may be exchanged for Registered Securities of the series and, if
permitted by applicable laws and regulations, the terms upon which Registered
Securities of the series may be exchanged for Bearer Securities of the series,
whether such Debt Securities are to be issuable in permanent global form with or
without coupons and, if so, whether beneficial owners of interests in any such
permanent global security may exchange such interests for Debt Securities of
such series and the circumstances under which any such exchanges may occur.
Unless otherwise specified in the applicable Prospectus Supplement,
principal and interest, if any, on the Debt Securities offered thereby are to be
payable at the office or agency of the Company maintained for such purposes in
the city where the principal corporate trust office of the Trustee is located,
and will initially be the principal corporate trust office of the Trustee,
provided that payment of interest, if any, may be made (subject to collection)
at the option of the Company by check mailed to the persons in whose names the
Debt Securities are registered at the close of business on the day specified in
the applicable Prospectus Supplement.
Form, Exchange, Registration and Transfer
Debt Securities will be exchangeable for other Debt Securities of the same
series and of like tenor, of any authorized denominations and of a like
aggregate principal amount and Stated Maturity (as defined in the Indenture).
Registered Securities may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed), at the office of the Trustee
or at the office of any transfer agent designated by the Company for such
purpose, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon the books of the Trustee or such transfer agent contingent
upon such Trustee or transfer agent, as the case may be, being satisfied with
the documents of title and identity of the person making the request. (Section
305)
In the event of any redemption of Debt Securities, the Company shall not be
required to: (i) issue, register the transfer of or exchange such Debt
Securities during a period beginning at the opening of business 15 days before
any selection of such Debt Securities to be redeemed and ending at the close of
business on the day of mailing of the relevant notice of redemption; or (ii)
register the transfer of or exchange any such Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any such Debt Security
being redeemed in part. (Section 305)
Limitation on Liens
Nothing in the Indenture or the Debt Securities will in any way limit the
amount of indebtedness or securities (other than the Debt Securities) which may
be incurred or issued by the Company or any of its Subsidiaries (as defined in
the Indenture). The Indenture provides that neither the Company nor any
Subsidiary will issue, assume or guarantee any notes, bonds, debentures or other
similar evidences of indebtedness for money borrowed secured by a mortgage,
lien, pledge, security interest or other encumbrance (defined in the Indenture
as "Liens") upon any of its property, subject to certain exceptions set forth in
the Indenture, without making effective provisions whereby any and all Debt
Securities then outstanding shall be secured by a Lien equally and ratably with
any and all other obligations thereby secured. Such restrictions will not,
however, apply to (a) Liens existing on the date of the Indenture or provided
for under the terms of agreements existing on the date thereof; (b) Liens
securing (i) all or part of the cost of exploration, production, gathering,
processing, marketing, drilling or development of any properties of the Company
or any of its Subsidiaries, or securing indebtedness incurred to provide funds
therefor; or (ii) indebtedness incurred to
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<PAGE> 8
finance all or part of the cost of acquiring, constructing, altering, improving
or repairing any such property or assets, or securing indebtedness incurred to
provide funds therefor; (c) Liens which secure only indebtedness owing by a
Subsidiary to the Company, or to one or more Subsidiaries, or the Company and
one or more Subsidiaries; (d) Liens on the property of any corporation or other
entity existing at the time such corporation or entity becomes a Subsidiary; (e)
Liens on any property to secure indebtedness incurred in connection with the
construction, installation or financing of pollution control or abatement
facilities or other forms of industrial revenue bond financing or indebtedness
issued or guaranteed by the United States, any state or any department, agency
or instrumentality of either or indebtedness issued to or guaranteed for the
benefit of a foreign government, any state or any department, agency or
instrumentality of either or an international finance agency or any division or
department thereof, including the World Bank, the International Finance Corp.
and the Multilateral Investment Guarantee Agency; (f) any extension, renewal or
replacement (or successive extensions, renewals or replacements) of any Lien
referred to in the foregoing clauses (a) through (e) existing on the date of the
Indenture; (g) certain Liens incurred in the ordinary course of business or (h)
Liens which secure Limited Recourse Indebtedness (as defined in the Indenture).
The following types of transactions, among others, shall not be deemed to create
indebtedness secured by Liens: (i) the sale or other transfer of crude oil,
natural gas or other petroleum hydrocarbons in place for a period of time until,
or in an amount such that, the transferee will realize therefrom a specified
amount (however determined) of money or such crude oil, natural gas or other
petroleum hydrocarbons, or the sale or other transfer of any other interest in
property of the character commonly referred to as a production payment,
overriding royalty, forward sale or similar interest and (ii) Liens required by
any contract or statute in order to permit the Company or a Subsidiary to
perform any contract or subcontract made by it with or at the request of the
United States government or any foreign government or international finance
agency, any state or any department thereof, or any agency or instrumentality of
either, or to secure partial, progress, advance or other payments to the Company
or any Subsidiary by any such entity pursuant to the provisions of any contract
or statute. (Section 1005)
Limitation on Sale/Leaseback Transactions
The Indenture provides that neither the Company nor any Subsidiary will
enter into any arrangement with any person (other than the Company or a
Subsidiary) providing for the leasing to the Company or a Subsidiary for a
period of more than three years of any property which has been, or is to be,
sold or transferred by the Company or such Subsidiary to such person or to any
person (other than the Company or a Subsidiary) to which funds have been or are
to be advanced by such person on the security of the leased property unless
either (a) the Company or such Subsidiary would be entitled, pursuant to the
provisions described under "Limitation on Liens" above, to incur indebtedness in
a principal amount equal to or exceeding the value of such sale/leaseback
transaction, secured by a Lien on the property to be leased; (b) since the date
of the Indenture and within a period commencing six months prior to the
consummation of such arrangement and ending six months after the consummation
thereof, the Company or such Subsidiary has expended or will expend for any
property (including amounts expended for the acquisition, exploration, drilling
or development thereof, and for additions, alterations, improvements and repairs
thereto) an amount equal to all or a portion of the net proceeds of such
arrangement and the Company elects to designate such amount as a credit against
such arrangement (with any such amount not being so designated to be applied as
set forth in (c) below); or (c) the Company, during or immediately after the
expiration of the 12 months after the effective date of such transaction,
applies to the voluntary defeasance or retirement of the Debt Securities and its
other Senior Indebtedness (as defined in the Indenture) an amount equal to the
greater of the net proceeds of the sale or transfer of the property leased in
such transaction or the fair value, in the opinion of the board of directors of
the Company of such property at the time of entering into such transaction (in
either case adjusted to reflect the remaining term of the lease and any amount
utilized by the Company as set forth in (b) above), less an amount equal to the
principal amount of Senior Indebtedness voluntarily retired by the Company
within such 12-month period. (Section 1006)
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Events of Default
Unless otherwise specified in the applicable Prospectus Supplement, any one
of the following events will constitute an Event of Default under the Indenture
with respect to the Debt Securities of any series: (a) failure to pay any
interest on any Debt Security of such series when due, continued for 30 days;
(b) failure to pay principal of (or premium, if any) on the Debt Securities of
such series when due and payable, either at maturity or, if applicable, at 12:00
noon on the Business Day following the Change in Control Purchase Date; (c)
failure to perform, or breach of, any other covenant or warranty of the Company
in the Indenture or the Debt Securities (other than a covenant or warranty
included in the Indenture solely for the benefit of a series of securities other
than the Debt Securities), continued for 60 days after written notice as
provided in the Indenture; (d) the acceleration of any Indebtedness (as defined
in the Indenture) of the Company or any subsidiary in excess of an aggregate of
$25,000,000 in principal amount under any event of default as defined in any
mortgage, indenture or instrument and such acceleration has not been rescinded
or annulled within 30 days after written notice as provided in the Indenture
specifying such Event of Default and requiring the Company to cause such
acceleration to be rescinded or annulled; (e) failure to pay, bond or otherwise
discharge within 60 days of entry, a judgment, court order or uninsured monetary
damage award against the Company or any subsidiary exceeding an aggregate of
$25,000,000 in principal amount which is not stayed on appeal or otherwise being
appropriately contested in good faith; (f) certain events of bankruptcy,
insolvency or reorganization involving the Company or any Subsidiary; and (g)
any other Event of Default provided with respect to the Debt Securities of that
series. (Section 501)
If an Event of Default with respect to the Debt Securities of any series
(other than an Event of Default described in (e) or (f) of the preceding
paragraph) occurs and is continuing, either the Trustee or the holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
such series by notice as provided in the Indenture may declare the principal
amount of such Debt Securities to be due and payable immediately. At any time
after a declaration of acceleration has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee, and subject to
applicable law and certain other provisions of the Indenture, the holders of a
majority in aggregate principal amount of the Debt Securities of such series
may, under certain circumstances, rescind and annul such acceleration. An Event
of Default described in (e) or (f) of the preceding paragraph shall cause the
principal amount and accrued interest (or such lesser amount as provided for in
the Debt Securities of such series) to become immediately due and payable
without any declaration or other act by the Trustee or any holder. (Section 502)
The Indenture provides that, within 90 days after the occurrence of any
Event of Default thereunder with respect to the Debt Securities of any series,
the Trustee shall transmit, in the manner set forth in the Indenture, notice of
such Event of Default to the holders of the Debt Securities of such series
unless such Event of Default has been cured or waived; provided, however, that
except in the case of a default in the payment of principal of, or premium, if
any, or interest, if any, or additional amounts, if any, on any Debt Security of
such series, the Trustee may withhold 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 has in good faith determined that the
withholding of such notice is in the interest of the holders of Debt Securities
of such series. (Section 602)
If an Event of Default occurs and is continuing with respect to the Debt
Securities of any series, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the holders of Debt Securities of such
series by all appropriate judicial proceedings. (Section 504)
The Indenture provides that, subject to the duty of the Trustee during any
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of Debt Securities, unless such
holders shall have offered to the Trustee reasonable indemnity. (Section 601)
Subject to such provisions for the indemnification of the Trustee, and subject
to applicable law and certain other provisions of the Indenture, the holders of
a majority in aggregate principal amount of the outstanding Debt Securities of a
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
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exercising any trust or power conferred on the Trustee, with respect to the Debt
Securities of such series. (Section 512)
Company's Obligation to Purchase Debt Securities on Change in Control
Upon the occurrence of a "Change in Control" as defined in the Indenture,
the Company shall mail within 15 days of the occurrence of such Change in
Control written notice regarding such Change in Control to the Trustee of the
Debt Securities of each series and to every holder thereof, after which the
Company shall be obligated, at the election of each holder thereof, to purchase
such Debt Securities. Under the Indenture, a "Change in Control" is deemed to
occur upon (a) the occurrence of any event requiring the filing of any report
under or in response to Schedule 13D or 14D-1 pursuant to the Exchange Act
disclosing beneficial ownership of either (i) 50% or more of the Company's
Common Stock then outstanding, or (ii) 50% or more of the voting power of the
voting stock of the Company then outstanding, (b) the consummation of sale,
transfer, lease, or conveyance of the Company's properties and assets
substantially as an entirety to any Person or Persons who are not Subsidiaries
of the Company; and (c) the consummation of any consolidation of the Company
with or merger of the Company into any other Person in a transaction in which
either (i) the Company is not the sole surviving corporation or (ii) Common
Stock existing prior to such transaction is converted into cash, securities or
other property and those exchanging the Company's Common Stock do not receive
either (x) 75% or more of the survivor's common stock or (y) 75% or more of the
voting power of the survivor's voting stock, following the consummation of such
transaction. The notice to be sent to every Trustee and holder upon a Change in
Control shall, in addition, be published at least once in an Authorized
Newspaper (as defined in the Indenture) and shall state (a) the event causing
the Change in Control and the date thereof, (b) the date by which notice of such
Change in Control is required by the Indenture to be given, (c) the date (which
date shall be 35 business days after the occurrence of the Change in Control) by
which the Company shall purchase Debt Securities to be purchased pursuant to the
selling holder's exercise of rights on Change in Control (the "Change in Control
Purchase Date"), (d) the price specified in such Debt Securities for their
purchase by the Company (the "Change in Control Purchase Price"), (e) the name
and address of the Trustee, (f) the procedure for surrendering Debt Securities
to the Trustee or other designated office or agent for payment, (g) a statement
of the Company's obligation to make prompt payment on proper surrender of such
Debt Securities, (h) the procedure for holders' exercise of rights of sale of
such Debt Securities by delivery of a "Change in Control Purchase Notice", and
(i) the procedures for withdrawing a Change in Control Purchase Notice. No
purchase of any Debt Securities shall be made if there has occurred and is
continuing an Event of Default under the Indenture (other than default in
payment of the Change in Control Purchase Price). In connection with any
purchase of Debt Securities under this paragraph, the Company will comply with
all Federal and state securities laws, including, specifically, Rule 13E-4, if
applicable, of the Exchange Act, and any related Schedule 13E-4 required to be
submitted under such Rule. (Section 1601)
Discharge, Defeasance and Covenant Defeasance
The Company may discharge certain obligations to holders of any series of
Debt Securities that have not already been delivered to the Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
depositing with the Trustee, in trust, funds in U.S. dollars or in the Foreign
Currency in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities with respect to principal
(and premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the Maturity thereof, as the case
may be. (Section 401)
The Indenture provides that, unless the provisions of Section 402 thereof
are made inapplicable to the Debt Securities of or within any series pursuant to
Section 301 thereof, the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for, among other things, the obligation to pay Additional Amounts, if
any upon the occurrence of certain events of taxation, assessment or
governmental charge with respect to payments on such Debt Securities and other
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an office or agency with respect to such Debt Securities
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and to hold moneys for payment in trust) ("defeasance") (Section 402(2)) or (b)
to be released from its obligations with respect to such Debt Securities under
the covenants described in "Limitation on Liens" and "Limitation on
Sale/Leaseback Transactions" above or, if provided pursuant to Section 301 of
the Indenture, its obligations with respect to any other covenant, and any
omission to comply with such obligations shall not constitute a default or an
Event of Default with respect to such Debt Securities ("covenant defeasance").
(Section 402(3)) Defeasance or covenant defeasance, as the case may be, shall be
conditioned upon the irrevocable deposit by the Company with the Trustee, in
trust of an amount, in U.S. dollars or in the Foreign Currency in which such
Debt Securities are payable at Stated Maturity, or Government Obligations (as
defined below), or both, applicable to such Debt Securities which through the
scheduled payment of principal and interest in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any) and interest on such Debt Securities on the scheduled due dates therefor.
(Section 402(4))
Such a trust may only be established if, among other things, (i) the
applicable defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the Indenture or any other material
agreement or instrument to which the Company is a party or by which it is bound,
(ii) no default or Event of Default with respect to the Debt Securities to be
defeased shall have occurred and be continuing on the date of the establishment
of such a trust and (iii) the Company has delivered to the Trustee an Opinion of
Counsel (as specified in the Indenture) to the effect that the holders of such
Debt Securities will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such defeasance or covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred, and such Opinion of Counsel, in the case of
defeasance, must refer to and be based upon a letter ruling of the Internal
Revenue Service received by the Company, a Revenue Ruling published by the
Internal Revenue Service or a change in applicable U.S. federal income tax law
occurring after the date of the Indenture. (Section 402(4)(d) and (e))
"Foreign Currency" means any currency, currency unit or composite currency,
including, without limitation, the ECU, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments. (Section 101)
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government or the governments in the
confederation which issued the Foreign Currency in which the Debt Securities of
a particular series are payable, 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 or
such government or governments which issued the Foreign Currency in which the
Debt Securities of such series are payable, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government or governments, which, in the case of
clauses (i) and (ii), are not callable or redeemable at the option of the issuer
or issuers thereof, and shall also include a depository receipt issued by a bank
or trust company as custodian with respect to any such Government Obligation or
a specific payment of interest on or principal of or any other amount with
respect to any such Government Obligation held by such custodian for the account
of the holder of such depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian with respect to the Government Obligation or the specific payment of
interest on or principal of or any other amount with respect to the Government
Obligation evidenced by such depository receipt. (Section 101)
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to Section 301 of the Indenture or the terms of such Debt Security to
receive payment in a currency other than that in which such deposit has been
made in respect of such Debt Security, or (b) a Conversion Event (as defined
below) occurs in respect of the Foreign Currency in which such deposit has been
made, the indebtedness represented by such Debt Security shall be deemed to have
been, and will be, fully discharged
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and satisfied through the payment of the principal of (and premium, if any) and
interest, if any, on such Debt Security as such Debt Security becomes due out of
the proceeds yielded by converting the amount or other properties so deposited
in respect of such Debt Security into the currency in which such Debt Security
becomes payable as a result of such election or such Conversion Event based on
(x) in the case of payments made pursuant to clause (a) above, the applicable
market exchange rate for such currency in effect on the second business day
prior to such payment date, or (y) with respect to a Conversion Event, the
applicable market exchange rate for such Foreign Currency in effect (as nearly
as feasible) at the time of the Conversion Event. (Section 402(5))
"Conversion Event" means the cessation of use of (i) a Foreign Currency
other than the ECU both by the government of the country or the confederation
which issued such Foreign Currency and for the settlement of transactions by a
central bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Community or (iii) any currency unit or composite currency other than the ECU
for the purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that are payable in a Foreign Currency
that ceases to be used by the government or confederation of issuance shall be
made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than an Event of Default with
respect to Sections 1005 and 1006 of the Indenture (which Sections would no
longer be applicable to such Debt Securities after such covenant defeasance) or
with respect to any other covenant as to which there has been covenant
defeasance, the amount in such Foreign Currency in which such Debt Securities
are payable, and Government Obligations on deposit with the Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of the Stated
Maturity but may not be sufficient to pay amounts due on such Debt Securities at
the time of the acceleration resulting from such Event of Default. However, the
Company would remain liable to make payment of such amounts due at the time of
acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
Under the Indenture, the Company is required to furnish to the Trustee
annually a statement as to performance by the Company of certain of its
obligations under the Indenture and as to any default in such performance. The
Company is also required to deliver to the Trustee, within five days after
occurrence thereof, written notice of any event which after notice or lapse of
time or both would constitute an Event of Default. (Section 1009)
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of not less than a majority in
aggregate principal amount of the Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the holder of each Debt Security affected thereby, (a) change the
Stated Maturity of the principal of, or premium, if any, on, or any installment
of principal, if any, of or interest on, or any Additional Amounts with respect
to, any Debt Security, (b) reduce the principal amount of, or premium or
interest on, or any Additional Amounts with respect to any Debt Security, (c)
change the coin or currency in which any Debt Security or any premium or any
interest thereon or any Additional Amounts with respect thereto is payable, (d)
impair the right to institute suit for the enforcement of any payment on or
after the Stated Maturity of any Debt Securities (or, in the case of redemption,
on or after the Redemption Date or, in the case of repayment at the option of
any holder, on or after the date for repayment or in the case of a change in
control, after the change in control purchase date), (e) reduce the percentage
and principal amount of the outstanding Debt Securities, the consent of whose
holders is required in order to take certain actions, (f) change any obligation
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of the Company to maintain an office or agency in the places and for the
purposes required by the Indenture, or (g) modify any of the above provisions.
(Section 902)
The holders of at least a majority in aggregate principal amount of Debt
Securities of any series may, on behalf of the holders of all Debt Securities of
such series, waive compliance by the Company with certain restrictive provisions
of the Indenture. (Section 1008) The holders of not less than a majority in
aggregate principal amount of Debt Securities of any series may, on behalf of
all holders of Debt Securities of such series, waive any past default and its
consequences under the Indenture with respect to the Debt Securities of such
series, except a default (a) in the payment of principal of (or premium, if any)
or any interest on or any Additional Amounts with respect to Debt Securities of
such series or (b) in respect of a covenant or provision of the Indenture that
cannot be modified or amended without the consent of the holder of each Debt
Security of any series. (Section 513)
Consolidation, Merger and Sale of Assets
The Company may, without the consent of the holders of the Debt Securities,
consolidate or merge with or into, or convey, transfer or lease its properties
and assets substantially as an entirety to, any Person that is a corporation,
limited liability company, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction, or may permit any such Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, provided that
any successor Person assumes the Company's obligations on the Debt Securities
and under the Indenture, that after giving effect to the transaction no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing, and that certain
other conditions are met. (Section 801)
Concerning the Trustee
Unless otherwise specified in the applicable Prospectus Supplement,
Chemical Bank, New York, New York will be the Trustee under the Indenture.
PROVISIONS APPLICABLE TO REMARKETED NOTES
Interest
General. Each Remarketed Note initially will earn interest at the rate per
annum (the "Initial Interest Rate") for the period of time (the "Initial
Interest Rate Period") specified in the applicable Prospectus Supplement.
Thereafter, unless otherwise specified in the applicable Prospectus Supplement,
each Remarketed Note will earn interest at the Company's option in either the
Short Term Rate Mode or the Long Term Rate Mode (collectively, "Interest Rate
Modes"), in each case as described below under "Interest Rate Modes." A
Remarketed Note will have Interest Rate Periods of 365 days or less ("Short Term
Rate Periods") if in the Short Term Rate Mode and more than 365 days ("Long Term
Rate Periods" ) if in the Long Term Rate Mode. Unless otherwise specified in the
applicable Prospectus Supplement, each Remarketed Note may bear interest at
different rates and have different Interest Rate Modes, Interest Rate Periods
and other terms as described herein.
Following the Initial Interest Rate Period, the interest rate for each
Remarketed Note will be established by a remarketing agent (the "Remarketing
Agent") selected by the Company or otherwise as specified herein. While a
Remarketed Note is in the Short Term Rate Mode, it will earn interest during
each Short Term Rate Period at fixed rates established by the Remarketing Agent
on the first day of such Short Term Rate Period as described below under
"Interest -- Determination of Interest Rates, Spreads and Spread Multipliers."
While a Remarketed Note is in the Long Term Rate Mode, it will earn interest
during each Long Term Rate Period at fixed rates established by the Remarketing
Agent prior to the commencement of such Long Term Rate Period and/or rates
established on the Interest Rate Adjustment Date (as defined below) for such
Long Term Rate Period and reset at intervals established by the Remarketing
Agent with the consent of the Company prior to the commencement of such Long
Term Rate Period by reference to an Interest Rate Basis or Interest Rate Bases
established by the Company prior to the commencement of such Long Term Rate
Period as adjusted by a Spread, if any, and a Spread Multiplier, if any,
established prior to the commencement of such
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Long Term Rate Period by the Remarketing Agent, in each case as specified below
under "Interest --Determination of Interest Rates, Spreads and Spread
Multipliers" and "Determination of Floating Interest Rates."
Interest on each Remarketed Note during the Initial Interest Rate Period
will be payable on the Interest Payment Dates to holders on the Record Dates, in
each case, specified in the applicable Prospectus Supplement. Thereafter, unless
otherwise specified in the applicable Prospectus Supplement, the Interest
Payment Dates for such Remarketed Note will be determined as follows: (i)
interest with respect to each Short Term Rate Period will be payable on the
Business Day next following such Short Term Rate Period; and (ii) interest with
respect to each Long Term Rate Period will be payable no less than semiannually
on such dates as are established by the Remarketing Agent prior to the
commencement of each Long Term Rate Period in the case of a fixed interest rate,
and as described below under "Floating Interest Rates" in the case of a floating
interest rate. Also thereafter, unless otherwise specified in the applicable
Prospectus Supplement, the Record Date for each Interest Payment Date will be
(y) in the case of each Short Term Rate Period, the Business Day next preceding
such Interest Payment Date, and (z) in the case of each Long Term Rate Period,
the 15th day (whether or not a Business Day) prior to such Interest Payment
Date.
Interest on each Remarketed Note will be computed during the Initial
Interest Rate Period as specified in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, (i) interest
earned during a Short Term Rate Period and interest earned at a floating rate
during a Long Term Rate Period will be computed on the basis of actual days
elapsed over 360 (or over the actual number of days in the year if an applicable
Interest Rate Basis is the CMT Rate or Treasury Rate (each as defined below)),
and (ii) interest on Remarketed Notes bearing interest at a fixed rate during a
Long Term Rate Period will be computed on the basis of a year of 360 days
consisting of twelve 30-day months.
In the event that interest on any Remarketed Note is not paid when due on
any Interest Payment Date, such Remarketed Note will be subject to Special
Mandatory Purchase. See "Purchase and Redemption of Remarketed Notes" below.
Payments of principal of, and interest on, Remarketed Notes will be made by
the Company through the Trustee to DTC, except that, in the event of a Special
Mandatory Purchase, such payments shall be made by the Company through the
Remarketing Agent to DTC. See "DTC Book-Entry Only System" and "Purchase and
Redemption of Remarketed Notes -- Special Mandatory Purchase" below.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in New
York, New York; provided, however, that with respect to Debt Securities in the
Long Term Rate Mode as to which LIBOR (as hereinafter defined) is an applicable
Interest Rate Basis, such day is also a London Business Day (as hereinafter
defined). "London Business Day" means (i) if the Index Currency (as hereinafter
defined) is other than European Currency Units ("ECU"), any day on which
dealings in such Index Currency are transacted in the London interbank market or
(ii) if the Index Currency is ECU, any day that does not appear as a ECU
non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or a day so designated by the ECU Banking Association) or,
if ECU non-settlement days do not appear on the page (and are not so
designated), is not a day on which payments in ECU cannot be settled in the
international interbank market.
Determination of Interest Rates, Spreads and Spread Multipliers. The
interest rate and, in the case of a floating interest rate, the Spread (if any)
and the Spread Multiplier (if any) for each Remarketed Note following the
Initial Interest Rate Period will be adjusted by the Remarketing Agent on the
first day of each succeeding Interest Rate Period, which must be a Business Day
(each, an "Interest Rate Adjustment Date"), and will be the minimum interest
rate and, in the case of a floating interest rate, Spread (if any) and Spread
Multiplier (if any) necessary in the judgment of the Remarketing Agent to
produce a par bid in the remarketing of such Remarketed Note for such Interest
Rate Period. Each remarketing will take place at the times described below under
"Interest Rate Modes." The floating interest rate for any Long Term Rate Period
for any Remarketed Note will be determined in the manner discussed below under
"Determination of Floating Interest Rates."
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In the event that (i) the Remarketing Agent for any Remarketed Note has
been removed or has resigned and no successor has been appointed, or (ii) the
Remarketing Agent for such Remarketed Note has failed to announce the
appropriate interest rate, Spread or Spread Multiplier, as the case may be, on
the Interest Rate Adjustment Date for such Remarketed Note for whatever reason,
or (iii) the appropriate interest rate, Spread, Spread Multiplier or Interest
Rate Period cannot be determined for such Remarketed Note for whatever reason,
or (iv) the interest on such Remarketed Note is not paid when due on any
Interest Payment Date therefor, then in each case (y) the Interest Rate Period
for such Remarketed Note will be converted automatically to a Weekly Rate Period
(a Short Term Rate Period described below) and the rate of interest thereon will
be equal to the rate per annum announced by The First National Bank of Chicago
(or such other nationally recognized bank located in the United States as the
Company may select) as its prime lending rate (such rate of interest being
referred to herein as the "Special Interest Rate") and (z) such Remarketed Note
will be subject to Special Mandatory Purchase. See "Purchase and Redemption of
Remarketed Notes" below.
The interest rate on the Remarketed Notes will not exceed the "Maximum
Rate," which, unless otherwise indicated in the applicable Prospectus
Supplement, is defined to mean 15% per annum or such higher rate as may be
established from time to time by the Board of Directors of the Company.
After any Interest Rate Adjustment Date, any Beneficial Owner may contact
the Trustee or the Remarketing Agent in order to be advised of the interest rate
and, in the case of a floating interest rate, Interest Rate Basis or Bases,
Spread (if any) and Spread Multiplier (if any), and in each case the other terms
applicable to such Beneficial Owner's Remarketed Notes. Except as described
below under "Floating Interest Rates" with respect to Remarketed Notes earning
interest at floating rates, no notice of the applicable interest rate, Spread
(if any) or Spread Multiplier (if any) will be sent to Beneficial Owners.
The interest rate, Spread (if any) and Spread Multiplier (if any) announced
by the Remarketing Agent, as well as the other matters disclosed to holders and
prospective purchasers of Remarketed Notes as described below under
"Determination of Floating Interest Rates," absent manifest error, will be
binding and conclusive upon the Beneficial Owners, the Company and the Trustee.
Interest Rate Modes
The Short Term Rate Mode and the Long Term Rate Mode, and conversion from
one Interest Rate Mode to another and among Interest Rate Periods within a
particular Interest Rate Mode, are described below.
The times specified below are subject to extension pursuant to standby
remarketing arrangements, if any, as described herein and in the applicable
Prospectus Supplement. See "Remarketing -- Interest Rate Adjustment Date;
Determination of Interest Rate" below.
Short Term Rate Mode. The Interest Rate Period for each Remarketed Note in
the Short Term Rate Mode will be a Short Term Rate Period, which will be a
period of not less than one nor more than 365 consecutive calendar days, as
determined by the Company (as described below under "Conversion Between Short
Term Rate Periods") or, if not so determined, by the Remarketing Agent for such
Remarketed Note (in its best judgment in order to obtain the lowest interest
cost for such Remarketed Note). Each Short Term Rate Period will commence on the
Interest Rate Adjustment Date therefor and end on the day preceding the date
specified by such Remarketing Agent as the first day of the next Interest Rate
Period for such Remarketed Note, which day must be a Business Day and will be
the Interest Adjustment Date for such next Interest Rate Period. The interest
rate for any Short Term Rate Period relating to a Remarketed Note will be a
fixed rate determined not later than 11:50 a.m., New York City time, on the
Interest Rate Adjustment Date for such Short Term Rate Period.
A Weekly Rate Period is a Short Term Rate Period and will generally be a
seven-day period commencing on any Interest Rate Adjustment Date and ending on
the day preceding the first day of the next Interest Rate Period for such
Remarketed Note.
Long Term Rate Mode. The Interest Rate Period for each Remarketed Note in
the Long Term Rate Mode will be a Long Term Rate Period, which will be a period
of more than 365 consecutive days and less
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than the remaining term of such Remarketed Note established by the Company upon
fifteen (15) days prior notice to the Remarketing Agent, the Trustee and DTC.
The last day of each Long Term Rate Period must end on the day prior to the last
Interest Payment Date for such period. The interest rate for any Long Term Rate
Period for a Remarketed Note will be a fixed rate or a floating rate determined
not later than 4:00 p.m., New York City time, on the third Business Day
preceding the Interest Rate Adjustment Date for such Long Term Rate Period.
With respect to any Remarketed Note in the Long Term Rate Mode, the Company
may elect a floating interest rate by providing notice, which will be in or
promptly confirmed in writing (which includes facsimile or appropriate
electronic media), received by the Trustee, the Remarketing Agent for such
Remarketed Note and DTC (the "Floating Interest Rate Notice") not less than
fifteen (15) days prior to the Interest Rate Adjustment Date for such Long Term
Rate Period. Each Floating Interest Rate Notice must state each Remarketed Note
to which it relates and the Long Term Rate Period to which it relates, and must
also state that the Beneficial Owners of each such Remarketed Note will be
deemed to have tendered each such Remarketed Note as of the Conversion Date and
will not be entitled to further accrual of interest on each such Remarketed Note
after such date. See "Tender of Remarketed Notes" below. Each Floating Interest
Rate Notice must also state whether the floating interest rate is a "Regular
Floating Rate," a "Floating Rate/Fixed Rate" or an "Inverse Floating Rate," the
Fixed Rate Commencement Date, if applicable, the Fixed Interest Rate, if
applicable, the Interest Rate Basis or Bases, the Initial Interest Rate, if any,
the Initial Interest Reset Date, the Interest Reset Period and Dates, the
Interest Payment Period and Dates, the Index Maturity and the Maximum Interest
Rate and/or Minimum Interest Rate, if any, as such terms are defined below. If
one or more of the applicable Interest Rate Bases is LIBOR or the CMT Rate, the
Floating Interest Rate Notice will also specify the Index Currency and
Designated LIBOR Page or the Designated CMT Maturity Index and Designated CMT
Telerate Page, respectively, as such terms are defined below. See "Determination
of Floating Interest Rates" below.
Conversion
Conversion Between Short Term Rate Periods. Each Remarketed Note in a Short
Term Rate Period may be remarketed into the same Interest Rate Period or
converted at the option of the Company to a different Short Term Rate Period
(notwithstanding the determination that the Remarketing Agent may make as
described above under "Interest Rate Modes -- Short Term Rate Mode") on any
Interest Rate Adjustment Date (i) by the entry of instructions to the
Remarketing Agent through an electronic issuance system (the "System"), if
available, or (ii) if the System is not available, upon receipt by the
Remarketing Agent, the Trustee and DTC of a notice, which will be in or promptly
confirmed in writing (which includes facsimile or appropriate electronic media),
from the Company (a "Conversion Notice"), in any case, prior to 9:30 a.m., New
York City time, or the remarketing of such Remarketed Note, whichever later
occurs, on such Interest Rate Adjustment Date.
Conversion from the Short Term Rate Mode to the Long Term Rate Mode. Each
Remarketed Note in the Short Term Rate Mode may be converted at the option of
the Company to the Long Term Rate Mode on any Interest Rate Adjustment Date upon
receipt not less than ten (10) days prior to such Interest Rate Adjustment Date
by the Remarketing Agent, the Trustee and DTC of a Conversion Notice from the
Company.
Conversion Between Long Term Rate Periods or from the Long Term Rate Mode
to the Short Term Mode. Each Remarketed Note in a Long Term Rate Period may be
remarketed in the same Interest Rate Period or converted at the option of the
Company to a different Long Term Rate Period or from the Long Term Rate Mode to
the Short Term Rate Mode on any Interest Rate Adjustment Date for such
Remarketed Note upon receipt by the Trustee, the Remarketing Agent for such
Remarketed Note and DTC of a Conversion Notice from the Company not less than
fifteen (15) days prior to such Interest Rate Adjustment Date.
Conversion Notice. Each Conversion Notice must state each Remarketed Note
to which it relates and the new Interest Rate Mode (if applicable), the new
Interest Rate Period and the date of the applicable
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conversion (the "Conversion Date") for each such Remarketed Note, and must also
state that the Beneficial Owners of each such Remarketed Note will be deemed to
have tendered each such Remarketed Note as of the Conversion Date and will not
be entitled to further accrual of interest on each such Remarketed Note after
such date. If the Company revokes a Conversion Notice or the Trustee, the
Remarketing Agent and DTC fail to receive a Conversion Notice from the Company
by the specified date in advance of the Interest Rate Adjustment Date for a
Remarketed Note, the Remarketed Note shall be converted automatically to the
Weekly Rate Period. See "Tender of Remarketed Notes" below.
Revocation or Change of Conversion Notice. The Company may, upon written
notice (which includes facsimile or appropriate electronic media) received by
the Remarketing Agent, the Trustee and DTC, revoke any Conversion Notice or
change any Interest Rate Mode or Interest Rate Period specified in such
Conversion Notice not later than (i) 9:30 a.m., New York City time, on the
Conversion Date with respect to any attempted conversion of the applicable
Remarketed Note to a Short Term Rate Period, or (ii) 4:00 p.m., New York City
time, on the third Business Day preceding the Conversion Date with respect to
any attempted conversion of the applicable Remarketed Note to a Long Term Rate
Period.
Tender of Remarketed Notes
Unless otherwise indicated in the applicable Prospectus Supplement, any
Remarketed Note bearing interest at the Initial Interest Rate or in the Long
Term Rate Mode or the Short Term Rate Mode will be automatically tendered for
purchase, or deemed tendered for purchase, on each Interest Rate Adjustment Date
relating thereto. Remarketed Notes will be purchased on the Interest Rate
Adjustment Date relating thereto as described below. See "Remarketing" below.
Remarketing
When any Remarketed Note is tendered for remarketing, the Remarketing Agent
therefor will use its best efforts to remarket such Remarketed Note on behalf of
the Beneficial Owner thereof at a price equal to 100% of the principal amount
thereof. The Remarketing Agent may purchase tendered Remarketed Notes for its
own account in a remarketing, but will not be obligated to do so. The Company
may offer to purchase Remarketed Notes in a remarketing, provided that the
interest rate established with respect to Remarketed Notes in such remarketing
is not different from the interest rate that would have been established if the
Company had not purchased such Remarketed Notes. Any Remarketed Notes for which
the Company shall have given a notice of redemption shall not be considered in a
remarketing.
Interest Rate Adjustment Date; Determination of Interest Rate. In
connection with any Remarketed Note that is being remarketed into a Short Term
Rate Period on the next Interest Rate Adjustment Date for such Remarketed Note,
by 11:00 a.m., New York City time, on such Interest Rate Adjustment Date, the
Remarketing Agent will determine the interest rate for such Remarketed Note
being remarketed to the nearest one hundred-thousandth of one percent per annum
for the next Interest Rate Period; provided, that between 11:00 a.m., New York
City time, and 11:50 a.m., New York City time, the Remarketing Agent and Standby
Remarketing Agent (if any) shall use their best efforts to determine the
interest rate for any Notes not successfully remarketed as of 11:00 a.m., New
York City time.
In connection with any Remarketed Note that is being remarketed into a Long
Term Rate Period on the next Interest Rate Adjustment Date for such Remarketed
Note, by 4:00 p.m., New York City time, on the third Business Day preceding such
Interest Rate Adjustment Date, the Remarketing Agent will determine the interest
rate for such Remarketed Note to the nearest one hundred-thousandth of one
percent per annum for the next Interest Rate Period; provided that, if for any
reason the Remarketing Agent is unable to determine such interest rate at such
time, the next Interest Rate Period for such Remarketed Note shall be a Weekly
Rate Period or such other Short Term Rate Period as the Company may determine by
9:30 a.m., New York City time, on such Interest Rate Adjustment Date.
In determining the applicable interest rate for any Remarketed Note and
other terms, the Remarketing Agent will, after taking into account market
conditions as reflected in the prevailing yields on fixed and variable rate
taxable debt securities, (i) consider the principal amount of all Remarketed
Notes of such series
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tendered or to be tendered on the applicable Interest Rate Adjustment Date and
the principal amount of such Remarketed Notes prospective purchasers are or may
be willing to purchase and (ii) contact, by telephone or otherwise, prospective
purchasers and ascertain the interest rates therefor at which they would be
willing to hold or purchase such Remarketed Notes.
Notification of Results; Settlement. By 12:30 p.m., New York City time, on
the Interest Rate Adjustment Date for any Remarketed Notes, the Remarketing
Agent will notify the Company, the Trustee and DTC in writing (which includes
facsimile or appropriate electronic media) of (i) the interest rate applicable
to such Remarketed Notes for the next Interest Rate Period, (ii) the aggregate
principal amount of tendered Remarketed Notes, and (iii) the aggregate principal
amount of such tendered Remarketed Notes which the Remarketing Agent and the
Standby Remarketing Agent, if any, were able to remarket, at a price equal to
100% of the principal amount thereof.
By telephone at approximately 1:00 p.m., New York City time, on such
Interest Rate Adjustment Date, the Remarketing Agent will advise each purchaser
of such Remarketed Notes (or the DTC Participant of each such purchaser who it
is expected in turn will advise such purchaser) of the principal amount of such
Remarketed Notes that such purchaser is to purchase.
As long as DTC's nominee holds the certificates representing any Remarketed
Notes in the book entry system of DTC, no certificates for such Remarketed Notes
will be delivered by any selling Beneficial Owner to reflect any transfer of
such Remarketed Notes effected in any remarketing and the following procedures
will apply.
Each purchaser of Remarketed Notes in a remarketing will be required to
give instructions to its DTC Participant to pay the purchase price therefor in
same day funds to the Remarketing Agent against delivery of the principal amount
of such Remarketed Notes by book entry through DTC by 3:00 p.m., New York City
time, on the Interest Rate Adjustment Date.
All tendered Remarketed Notes will be automatically delivered to the
account of the Remarketing Agent, by book entry through DTC against payment of
the purchase price or redemption price therefor, on the Interest Rate Adjustment
Date relating thereto.
The Remarketing Agent will make payment to the DTC Participant of each
Beneficial Owner tendering Remarketed Notes subject to a remarketing, by book
entry through DTC by the close of business on the Interest Rate Adjustment Date
against delivery through DTC of such Beneficial Owner's tendered Remarketed
Notes, of: (i) the purchase price for tendered Remarketed Notes that have been
sold in the remarketing, and (ii) if any such Remarketed Notes were purchased
pursuant to a Special Mandatory Purchase, the purchase price of such Remarketed
Notes plus, in each case, accrued interest, if any to such date.
The transactions described above for a remarketing of any Remarketed Notes
will be executed on the Interest Rate Adjustment Date for such Remarketed Notes
through DTC in accordance with the procedures of DTC, and the accounts of the
respective DTC Participants will be debited and credited and such Remarketed
Notes delivered by book entry as necessary to effect the purchases and sales
thereof, in each case as determined in the related remarketing. See "DTC
Book-Entry-Only System."
Except as otherwise set forth herein under "Purchase and Redemption of
Remarketed Notes" below, any Remarketed Notes tendered in a remarketing will be
purchased solely out of the proceeds received from purchasers of such Remarketed
Notes in such remarketing, and neither the Remarketing Agent for such Remarketed
Notes, the Standby Remarketing Agent, if any, nor the Company will be obligated
to provide funds to make payment upon any Beneficial Owner's tender in a
remarketing.
Although tendered Remarketed Notes will be subject to purchase by the
Remarketing Agent in a remarketing, the Remarketing Agent will not be obligated
to purchase any such Remarketed Notes.
The remarketing procedures set forth above will apply to all Remarketed
Notes except to the extent otherwise indicated in the applicable Prospectus
Supplement for such Remarketed Notes. The settlement and remarketing procedures
described above, including the notice provisions and provisions for payment by
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purchasers of tendered Remarketed Notes or for payment to selling Beneficial
Owners of tendered Remarketed Notes, may be modified to the extent required by
DTC. In addition, the Remarketing Agent may, in accordance with the terms of the
Indenture, modify the settlement and remarketing procedures set forth above in
order to facilitate the settlement and remarketing process.
Failed Remarketing. Unless otherwise provided in the applicable Prospectus
Supplement, any Remarketed Notes not successfully remarketed will be purchased
by the Company. By 12:30 p.m., New York City time, on any Interest Rate
Adjustment Date, the Remarketing Agent for such Remarketed Notes will notify the
Trustee and the Company by telephone, confirmed in writing (which includes
facsimile or appropriate electronic media), of the principal amount of
Remarketed Notes that such Remarketing Agent and the Standby Remarketing Agent,
if any, were unable to remarket on such date. Payment of the principal amount of
unremarketed Remarketed Notes by the Company and payment of accrued and unpaid
interest, if any, by the Company, shall be made by deposit of same-day funds
with the Remarketing Agent by 3:00 p.m., New York City time, on such Interest
Rate Adjustment Date. See "Purchase and Redemption of Remarketed Notes" below.
The Remarketing Agent. The Company and the Remarketing Agent for Remarketed
Notes will enter into a Remarketing Agreement, a form of which has been filed as
an exhibit to the Registration Statement of which this Prospectus is a part. The
summaries below are summaries of certain provisions of the form of Remarketing
Agreement and do not purport to be complete and are subject to and qualified in
their entirety by, the provisions of the Remarketing Agreement.
For its services in determining the interest rate and remarketing
Remarketed Notes, the Remarketing Agent will receive from the Company a fee to
be determined at the time of execution of the Remarketing Agreement. The
Remarketing Agent may pay to selected broker-dealers, including any Standby
Remarketing Agent, a portion of any fees it receives from the Company for its
services as Remarketing Agent reflecting Remarketed Notes sold through such
broker-dealers to purchasers in remarketings.
The Company will agree to indemnify the Remarketing Agent and the Standby
Remarketing Agent against certain liabilities, including liabilities under the
Securities Act arising out of or in connection with its duties under the
Remarketing Agreement.
The Remarketing Agreement will provide that the Company may in its absolute
discretion replace the Remarketing Agent by giving 30 days prior notice to the
Remarketing Agent and the Trustee, such replacement to be effective upon the
Company's appointment of a successor to perform the services of the Remarketing
Agent under the Remarketing Agreement. The Remarketing Agreement will also
provide that the Company reserves the right to appoint or replace any Standby
Remarketing Agent at any time.
The Remarketing Agreement will also provide that the Remarketing Agent or
any Standby Remarketing Agent may resign at any time as Remarketing Agent, such
resignation to be effective 30 days after the delivery to the Company and the
Trustee of notice of such resignation. In such case, it shall be the sole
obligation of the Company to appoint a successor Remarketing Agent.
Purchase and Redemption of Remarketed Notes
Special Mandatory Purchase. Remarketed Notes which have not been remarketed
by 12 o'clock noon, New York City time, on an Interest Rate Adjustment Date for
such Remarketed Notes will be purchased by the Company pursuant to the Special
Mandatory Purchase Right. In such event the Company will deposit same-day funds
with the Remarketing Agent for such Remarketed Notes irrevocably in trust for
the benefit of the Beneficial Owners of Remarketed Notes subject to Special
Mandatory Purchase by 3:00 p.m., New York City time, on such Interest Rate
Adjustment Date. Such funds shall be in an amount sufficient to pay the
aggregate purchase price of such unremarketed Remarketed Notes, equal to 100% of
the principal amount thereof and accrued and unpaid interest, if any. Such
Remarketed Notes will remain outstanding and enjoy the benefits of the Indenture
until such time as the Company delivers certificates for the Remarketed Notes to
the Trustee for cancellation.
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Redemption While Remarketed Notes are in the Initial Interest Rate Period.
During the Initial Interest Rate Period for any Remarketed Notes, such
Remarketed Notes will be subject to redemption only to the extent provided, and
upon the terms set forth, in the applicable Prospectus Supplement.
Optional Redemption While Remarketed Notes are in the Short Term Rate Mode.
Unless otherwise provided in the applicable Prospectus Supplement, any
Remarketed Notes in the Short Term Rate Mode are subject to redemption at the
option of the Company in whole or in part on any Interest Rate Adjustment Date
relating thereto, upon 15 days notice to the holders thereof at a redemption
price equal to the aggregate principal amount of such Remarketed Notes to be
redeemed plus accrued interest thereon to the redemption date.
Redemption While Remarketed Notes are in the Long Term Rate Mode. Unless
otherwise provided in the applicable Prospectus Supplement, any Remarketed Notes
in the Long Term Rate Mode are subject to redemption at the option of the
Company at the times and upon the terms specified at the time of conversion to
such Long Term Rate Mode.
Allocation. Except in the case of a Special Mandatory Purchase, if the
Remarketed Notes are to be redeemed in part, and as long as DTC's nominee holds
the certificates representing any Remarketed Notes, DTC, after receiving notice
of redemption specifying the aggregate principal amount of Remarketed Notes to
be so redeemed, will determine by lot (or otherwise in accordance with the
procedures of DTC) the principal amount of such Remarketed Notes to be redeemed
from the account of each DTC Participant. After making its determination as
described above, DTC will give notice of such determination to each DTC
Participant from whose account such Remarketed Notes are to be redeemed. Each
such DTC Participant, upon receipt of such notice, will in turn determine the
principal amount of Remarketed Notes to be redeemed from the accounts of the
Beneficial Owners of such Remarketed Notes for which it serves as DTC
Participant, and give notice of such determination to the Remarketing Agent.
Events of Default
In addition to the Events of Default set forth above under "Provisions
Applicable to All Debt Securities -- Events of Default," failure by the Company
to purchase Remarketed Notes after written notice of a failed remarketing by the
Remarketing Agent on behalf of the Beneficial Owners of such Remarketed Notes in
the manner provided in the Remarketed Notes will constitute an Event of Default
under the Indenture with respect to such Remarketed Notes.
If an Event of Default occurs and is continuing with respect to the
Remarketed Notes of any series, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the holders of Remarketed Notes
of such series by all appropriate judicial proceedings. (Section 504)
The Bank Credit Facility Agreement
In order to fulfill its obligations under the Special Mandatory Purchase
Right, the Company may from time to time, at its option, modify, amend and
restate its existing bank credit agreements or enter into one or more credit
agreements (the "Bank Credit Facility Agreement") with one or more banks or
other credit providers (referred to individually and collectively herein as the
"Bank"). The Company will retain the right to replace, add or discharge any or
all Banks at any time. Purchasers of the Remarketed Notes should not rely upon
the presence of Banks in making an investment decision regarding the Remarketed
Notes.
The Banks' obligation to advance funds may be subject to conditions
specified in the Bank Credit Facility Agreement. Unless otherwise indicated in
the applicable Prospectus Supplement, such conditions include: availability for
borrowing under such credit facility; receipt by the Banks of various documents,
certificates and opinions from the Company; the continued accuracy of certain
representations and warranties made by the Company in the Bank Credit Facility
Agreement; that no event has occurred and is continuing which would constitute
an Event of Default under the Bank Credit Facility Agreement (such events
include failure by the Company to pay amounts owing under the Bank Credit
Facility Agreement, inaccuracy of representations and warranties when made,
failure to perform covenants under the Bank Credit Facility Agreement, failure
to pay
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any debt owing by the Company in excess of $25,000,000, certain events of
bankruptcy or insolvency of the Company, an Event of Default under the Indenture
or the non-enforceability of certain related documents); and receipt by the
Banks of a borrowing request from the Company.
The Company may indemnify a Bank against certain liabilities arising out of
or in connection with its duties under the Bank Credit Facility Agreement. A
copy of the Company's current Bank Credit Facility Agreement has been filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
The summaries of certain provisions of any Bank Credit Facility Agreement do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of such Bank Credit Facility Agreement.
Determination of Floating Interest Rates
Unless otherwise specified in the applicable Prospectus Supplement, with
the consent of the Remarketing Agent, a floating interest rate described below
will apply to any Long Term Rate Period for a Remarketed Note specified by the
Company upon receipt by the Trustee, the Remarketing Agent for such Remarketed
Note and DTC of a notice in or confirmed in writing (the "Floating Interest Rate
Notice") from the Company not less than fifteen (15) days prior to the Interest
Rate Adjustment Date for such Long Term Rate Period. Each Floating Interest Rate
Notice must state each Remarketed Note to which it relates and the Long Term
Rate Period to which it relates, and must also state that the Beneficial Owners
of each such Remarketed Note will be deemed to have tendered each such
Remarketed Note as of the Conversion Date and will not be entitled to further
accrual of interest on each such Remarketed Note after such date. See "Tender of
Remarketed Notes" above. Each Floating Interest Rate Notice must also state
whether the floating interest rate is a "Regular Floating Rate," a "Floating
Rate/Fixed Rate" or an "Inverse Floating Rate," the Fixed Rate Commencement
Date, if applicable, the Fixed Interest Rate, if applicable, the Interest Rate
Basis or Bases, the Initial Interest Rate, if any, the Initial Interest Reset
Date, the Interest Reset Period and Dates, the Interest Payment Period and
Dates, the Index Maturity and the Maximum Interest Rate and/or Minimum Interest
Rate, if any, as such terms are defined below. If one or more of the applicable
Interest Rate Bases is LIBOR or the CMT Rate, the Floating Interest Rate Notice
will also specify the Index Currency and Designated LIBOR Page or the Designated
CMT Maturity Index and Designated CMT Telerate Page, respectively, as such terms
are defined below.
The floating interest rate for any Long Term Rate Period for any Remarketed
Note will be determined as follows:
(i) Unless the floating interest rate is a "Floating Rate/Fixed Rate"
or an "Inverse Floating Rate," such floating interest rate will be a
"Regular Floating Rate" and, except as described below or in the applicable
Floating Interest Rate Notice, will be the interest rate determined by
reference to the applicable Interest Rate Basis or Bases (a) plus or minus
the applicable Spread, if any, and/or (b) multiplied by the applicable
Spread Multiplier, if any. Commencing on the Interest Rate Adjustment Date
for such Long Term Rate Period, the rate at which interest on such
Remarketed Note will be payable will be reset as of each Interest Reset
Date during such Long Term Rate Period.
(ii) If the floating interest rate is designated as a "Floating
Rate/Fixed Rate," then, except as described below or in the applicable
Floating Interest Rate Notice, such floating interest rate will be the
interest rate determined by reference to the applicable Interest Rate Basis
or Bases (a) plus or minus the applicable Spread, if any, and/or (b)
multiplied by the applicable Spread Multiplier, if any. Commencing on the
Interest Rate Adjustment Date for such Long Term Rate Period, the rate at
which interest on such Remarketed Note shall be payable shall be reset as
of each Interest Reset Date during such Long Term Rate Period; provided,
however, that the interest rate in effect for the period commencing on the
Fixed Rate Commencement Date to the last day of such Long Term Rate Period
will be the Fixed Interest Rate if such rate is specified in the applicable
Floating Interest Rate Notice or, if no such Fixed Interest Rate is
specified, the interest rate in effect thereon on the day immediately
preceding the Fixed Rate Commencement Date.
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(iii) If the floating interest rate is designated as an "Inverse
Floating Rate," then, except as described below or in the applicable
Floating Interest Rate Notice, such Remarketed Note will bear interest at
the Fixed Interest Rate minus the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the applicable
Spread, if any, and/or (b) multiplied by the applicable Spread Multiplier,
if any; provided, however, that, unless otherwise specified in the
applicable Floating Interest Rate Notice, the interest rate thereon will
not be less than zero. Commencing on the Interest Rate Adjustment Date for
such Long Term Rate Period, the rate at which interest on such Remarketed
Note shall be payable shall be reset as of each Interest Reset Date during
such Long Term Rate Period.
The "Spread" is the number of basis points to be added to or subtracted
from the related Interest Rate Basis or Bases applicable to such Long Term Rate
Period for such Remarketed Note. The "Spread Multiplier" is the percentage of
the related Interest Rate Basis or Bases applicable to such Long Term Rate
Period by which such Interest Rate Basis or Bases will be multiplied to
determine the applicable interest rate from time to time for such Long Term Rate
Period. The "Index Maturity" is the period to maturity of the instrument or
obligation with respect to which the related Interest Rate Basis or Bases will
be calculated.
Unless otherwise specified in the applicable Floating Interest Rate Notice,
the interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth above or in
the applicable Floating Interest Rate Notice, the interest rate in effect on
each day during such Long Term Rate Period shall be (i) if such day is an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as hereinafter defined) immediately preceding such Interest
Reset Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date.
The applicable floating interest rate on Remarketed Notes during any Long
Term Rate Period will be determined by reference to the applicable Interest Rate
Basis or Interest Rate Bases, which may, as described below, include (i) the CD
Rate, (ii) the CMT Rate, (iii) the Commercial Paper Rate, (iv) the Eleventh
District Cost of Funds Rate, (v) the Federal Funds Rate, (vi) LIBOR, (vii) the
Prime Rate, (viii) the Treasury Rate, or (ix) such other Interest Rate Basis or
interest rate formula as may be specified in the applicable Floating Interest
Rate Notice; provided, however, in the case of a Floating Rate/Fixed Rate, the
interest rate in effect for the period commencing on the Fixed Rate Commencement
Date to the last day of such Long Term Rate Period will be the Fixed Interest
Rate, if such rate is specified in the applicable Floating Interest Rate Notice
or, if no such Fixed Interest Rate is specified, the interest rate in effect
thereon on the day immediately preceding the Fixed Rate Commencement Date.
The applicable Floating Interest Rate Notice will specify whether the rate
of interest will be reset daily, weekly, monthly, quarterly, semiannually or
annually or on such other specified basis (each, an "Interest Reset Period") and
the dates on which such rate of interest will be reset (each, an "Interest Reset
Date"). Unless otherwise specified in the applicable Floating Interest Rate
Notice, the Interest Reset Dates will be, in the case of a floating interest
rate which resets: (i) daily, each Business Day; (ii) weekly, the Wednesday of
each week (unless the Treasury Rate is an applicable Interest Rate Basis, in
which case the Tuesday of each week except as described below); (iii) monthly,
the third Wednesday of each month (unless the Eleventh District Cost of Funds
Rate is an applicable Interest Rate Basis, in which case the first calendar day
of the month); (iv) quarterly, the third Wednesday of March, June, September and
December of each year, (v) semiannually, the third Wednesday of the two months
specified in the applicable Prospectus Supplement; and (vi) annually, the third
Wednesday of the month specified in the applicable Floating Interest Rate
Notice; provided however, that, with respect to a Floating Rate/Fixed Rate, the
rate of interest thereon will not reset after the applicable Fixed Rate
Commencement Date. If any Interest Reset Date would otherwise be a day that is
not a Business Day, such Interest Reset Date will be postponed to the next
succeeding Business Day, unless LIBOR is an applicable Interest Rate Basis and
such Business Day falls in the next succeeding calendar month, in which case
such Interest Reset Date will be the immediately preceding Business Day. In
addition, if the Treasury Rate is an applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
such Interest Reset Date will be postponed to the next succeeding Business Day.
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<PAGE> 23
The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be the rate determined as of the applicable
Interest Determination Date on or prior to the Calculation Date (as hereinafter
defined). The "Interest Determination Date" with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will
be the second Business Day immediately preceding the applicable Interest Reset
Date; the "Interest Determination Date" with respect to the Eleventh District
Cost of Funds Rate will be the last working day of the month immediately
preceding the applicable Interest Reset Date on which the Federal Home Loan Bank
of San Francisco (the "FHLB of San Francisco") publishes the Index (as
hereinafter defined); and the "Interest Determination Date" with respect to
LIBOR will be the second London Business Day immediately preceding the
applicable Interest Reset Date, unless the Index Currency is British pounds
sterling, in which case the "Interest Determination Date" will be the applicable
Interest Reset Date. With respect to the Treasury Rate, the "Interest
Determination Date" will be the day that Treasury Bills (as hereinafter defined)
are auctioned during or for the week in which the applicable Interest Reset Date
falls (Treasury Bills are normally sold at an auction held on Monday of each
week, unless that day is a legal holiday, in which case the auction is normally
held on the following Tuesday, except that such auction may be held on the
preceding Friday); provided, however, that if an auction is held on the Friday
of the week preceding the applicable Interest Reset Date, the Interest
Determination Date will be such preceding Friday. The "Interest Determination
Date" pertaining to a floating interest rate which is determined by reference to
two or more Interest Rate Bases will be the most recent Business Day which is at
least two Business Days prior to the applicable Interest Reset Date on which
each Interest Rate Basis is determinable. Each Interest Rate Basis will be
determined as of such date, and the applicable interest rate will take effect on
the applicable Interest Reset Date.
Either or both of the following may also apply to the floating interest
rate on a Remarketed Note for a Long Term Rate Period: (i) a Maximum Interest
Rate, or ceiling, that may accrue during any Interest Reset Period and (ii) a
Minimum Interest Rate, or floor, that may accrue during any Interest Reset
Period. In addition to any Maximum Interest Rate that may apply, the interest
rate on any Remarketed Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States laws of
general application.
Except as provided below or in the applicable Floating Interest Rate
Notice, interest will be payable, in the case of floating interest rates which
reset: (i) daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified in the applicable Floating Interest Rate Notice; (ii) quarterly, on
the third Wednesday of March, June, September and December of each year, (iii)
semiannually, on the third Wednesday of the two months of each year specified in
the applicable Floating Interest Rate Notice; and (iv) annually, on the third
Wednesday of the month of each year specified in the applicable Floating
Interest Rate Notice and, in each case, on the Business Day immediately
following the applicable Long Term Rate Period. If any Interest Payment Date for
the payment of interest at a floating rate (other than following the end of the
applicable Long Term Rate Period) would otherwise be a day that is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day, except that if LIBOR is an applicable Interest Rate
Basis and such Business Day falls in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business Day.
All percentages resulting from any calculation of floating interest rates
will be rounded to the nearest one hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upwards (e.g., 9.876545%
(or .09876545) would be rounded to 9.87655% (or .0987655)), and all amounts used
in or resulting from such calculation will be rounded, in the case of United
States dollars, to the nearest cent or, in the case of a foreign currency or
composite currency, to the nearest unit (with one-half cent or unit being
rounded upwards).
Accrued floating rate interest will be calculated by multiplying the
principal amount of the Remarketed Note to which it relates by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factor calculated for each day in the applicable Interest Reset Period.
Unless otherwise specified in the applicable Floating Interest Rate Notice, the
interest factor for each such day will be computed by dividing the interest rate
applicable to such day by 360, if an applicable Interest Rate Basis is the CD
Rate,
22
<PAGE> 24
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR or the Prime Rate, or by the actual number of days in the year
if an applicable Interest Rate Basis is the CMT Rate or the Treasury Rate.
Unless otherwise specified in the applicable Floating Interest Rate Notice, if
the floating interest rate is calculated with reference to two or more Interest
Rate Bases, the interest factor will be calculated in each period in the same
manner as if only one of the applicable Interest Rate Bases applied as specified
in the applicable Floating Interest Rate Notice.
Unless otherwise specified in the applicable Floating Interest Rate Notice,
Chemical Bank will be the "Calculation Agent." Upon request of the Beneficial
Owner of any Remarketed Note, the Calculation Agent will disclose the interest
rate then in effect and, if determined, the interest rate that will become
effective as a result of a determination made for the next succeeding Interest
Reset Date with respect to such Remarketed Note. Unless otherwise specified in
the applicable Floating Interest Rate Notice, the "Calculation Date," if
applicable, pertaining to any Interest Determination Date will be the earlier of
(i) the tenth calendar day after such Interest Determination Date or, if such
day is not a Business Day, the next succeeding Business Day or (ii) the Business
Day immediately preceding the applicable Interest Payment Date or the Maturity
Date, as the case may be.
Unless otherwise specified in the applicable Floating Interest Rate Notice,
the Calculation Agent shall determine each Interest Rate Basis in accordance
with the following provisions.
CD Rate. Unless otherwise specified in the applicable Floating Interest
Rate Notice, "CD Rate" means, with respect to any Interest Determination Date
relating to a Long Term Rate Period for which the interest rate is determined
with reference to the CD Rate (a "CD Rate Interest Determination Date"), the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified in the applicable Floating Interest Rate
Notice as published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication ("H.15(519)") under the heading "CDs (Secondary Market)," or, if not
published by 3:00 p.m., New York City time, on the related Calculation Date, the
rate on such CD Rate Interest Determination Date for negotiable United States
dollar certificates of deposit of the Index Maturity specified in the applicable
Floating Interest Rate Notice as published by the Federal Reserve Bank of New
York in its daily statistical release "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or any successor publication ("Composite Quotations")
under the heading "Certificates of Deposit." If such rate is not yet published
in either H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on
the related Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York
City time, on such CD Rate Interest Determination Date, of three leading nonbank
dealers in negotiable United States dollar certificates of deposit in The City
of New York (which may include the Remarketing Agent or its affiliates) selected
by the Calculation Agent, after consultation with the Company, for negotiable
United States dollar certificates of deposit of major United States money market
banks for negotiable certificates of deposit with a remaining maturity closest
to the Index Maturity specified in the applicable Floating Interest Rate Notice
in an amount that is representative for a single transaction in that market at
that time; provided, however, that if the dealers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the CD Rate determined as
of such CD Rate Interest Determination Date will be the CD Rate in effect on
such CD Rate Interest Determination Date.
CMT Rate. Unless otherwise specified in the applicable Floating Interest
Rate Notice, "CMT Rate" means, with respect to any Interest Determination Date
relating to a Long Term Rate Period for which the interest rate is determined
with reference to the CMT Rate (a "CMT Rate Interest Determination Date"), the
rate displayed on the Designated CMT Telerate Page under the caption
". . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15
. . . Mondays Approximately 3:45 p.m.," under the column for the Designated CMT
Maturity Index for (i) if the Designated CMT Telerate Page is 7055, the rate on
such CMT Rate Interest Determination Date and (ii) if the Designated CMT
Telerate Page is 7052, the week, or the month, as applicable, ended immediately
preceding the week in which the related CMT Rate Interest Determination Date
occurs. If such rate is no longer displayed on the relevant page or is not
displayed by 3:00 p.m., New York City time, on the related Calculation Date,
then the CMT Rate for such CMT Rate
23
<PAGE> 25
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published or is not published by 3:00 p.m., New York City
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate on the CMT Rate
Interest Determination Date will be calculated by the Calculation Agent and will
be a yield to maturity, based on the arithmetic mean of the secondary market
closing offer side prices as of approximately 3:30 p.m., New York City time, on
such CMT Rate Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
(each, a "Reference Dealer") in New York, New York (which may include the
Remarketing Agent or its affiliates) selected by the Calculation Agent, after
consultation with the Company, (from five such Reference Dealers selected by the
Calculation Agent, after consultation with the Company, and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States ("Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent is
unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT
Rate Interest Determination Date will be calculated by the Calculation Agent and
will be a yield to maturity based on the arithmetic mean of the secondary market
offer side prices as of approximately 3:30 p.m., New York City time, on such CMT
Rate Interest Determination Date of three Reference Dealers in New York, New
York (from five such Reference Dealers selected by the Calculation Agent, after
consultation with the Company, and eliminating the highest quotation (or, in the
event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least $100 million. If three or four (and
not five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers so selected by the
Calculation Agent, after consultation with the Company, are quoting as mentioned
herein, the CMT Rate determined as of such CMT Rate Interest Determination Date
will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the second
preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the Calculation Agent, after consultation with
the Company, will obtain from five Reference Dealers quotations for the Treasury
Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page specified in the applicable Floating Interest Rate Notice
(or any other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)) for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Floating Interest Rate Notice, the
Designated CMT Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Floating Interest Rate Notice with respect to which
the CMT Rate will be calculated. If no such maturity is specified in the
applicable Floating Interest Rate Notice, the Designated CMT Maturity Index
shall be 2 years.
Commercial Paper Rate. Unless otherwise specified in the applicable
Floating Interest Rate Notice, "Commercial Paper Rate" means, with respect to
any Interest Determination Date relating to a Long Term
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<PAGE> 26
Rate Period for which the interest rate is determined with reference to the
Commercial Paper Rate (a "Commercial Paper Rate Interest Determination Date"),
the Money Market Yield (as hereinafter defined) on such date of the rate for
commercial paper having the Index Maturity specified in the applicable Floating
Interest Rate Notice as published in H.15(519) under the heading "Commercial
Paper." In the event that such rate is not published by 3:00 p.m., New York City
time, on the related Calculation Date, then the Commercial Paper Rate on such
Commercial Paper Rate Interest Determination Date will be the Money Market Yield
of the rate for commercial paper having the Index Maturity specified in the
applicable Floating Interest Rate Notice as published in Composite Quotations
under the heading "Commercial Paper" (with an Index Maturity of one month or
three months being deemed to be equivalent to an Index Maturity of 30 days or 90
days, respectively). If such rate is not yet published in either H.15(519) or
Composite Quotations by 3:00 p.m., New York City time, on the related
Calculation Date, then the Commercial Paper Rate on such Commercial Paper Rate
Interest Determination Date will be calculated by the Calculation Agent and will
be the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00, New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of commercial paper in New York, New
York (which may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent, after consultation with the Company, for commercial paper
having the Index Maturity specified in the applicable Floating Interest Rate
Notice placed for an industrial issuer whose bond rating is "AA", or the
equivalent, from a nationally recognized statistical rating organization;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate determined
as of such Commercial Paper Rate Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
<TABLE>
<S> <C> <C>
D X 360
-------------
Money Market Yield = 360 - (D X M) X 100
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.
Eleventh District Cost of Funds Rate. Unless otherwise specified in the
applicable Floating Interest Rate Notice, "Eleventh District Cost of Funds Rate"
means, with respect to any Interest Determination Date relating to a Long Term
Rate Period for which the interest rate is determined with reference to the
Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate
Interest Determination Date"), the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 as of 11:00
a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
Federal Funds Rate. Unless otherwise specified in the applicable Floating
Interest Rate Notice, "Federal Funds Rate" means, with respect to any Interest
Determination Date relating to a Long Term Rate Period for which the interest
rate is determined with reference to the Federal Funds Rate (a "Federal Funds
Rate
25
<PAGE> 27
Interest Determination Date"), the rate on such date for United States dollar
federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if not published by 3:00 p.m., New York City time, on the
related Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate
Interest Determination Date will be calculated by the Calculation Agent, after
consultation with the Company, and will be the arithmetic mean of the rates for
the last transaction in overnight United States dollar federal funds arranged by
three leading brokers of federal funds transactions in New York City (which may
include the Remarketing Agent or its affiliates) selected by the Calculation
Agent prior to 9:00 a.m., New York City time, on such Federal Funds Rate
Interest Determination Date; provided, however that if the brokers so selected
by the Calculation Agent are not quoting as mentioned in this sentence, the
Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Rate Interest Determination Date.
LIBOR. Unless otherwise specified in the applicable Floating Interest Rate
Notice, "LIBOR" means the rate determined in accordance with the following
provisions:
(i) With respect to any Interest Determination Date relating to a Long
Term Rate Period for which the interest rate is determined with reference
to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will be either: (a)
if "LIBOR Reuters" is specified in the applicable Floating Interest Rate
Notice, the arithmetic mean of the offered rates (unless the Designated
LIBOR Page by its terms provides only for a single rate, in which case such
single rate shall be used) for deposits in the Index Currency having the
Index Maturity specified in such Floating Interest Rate Notice, commencing
on the applicable Interest Reset Date, that appear (or, if only a single
rate is required as aforesaid, appears) on the Designated LIBOR Page as of
11:00 a.m., London time, on such LIBOR Interest Determination Date, or (b)
if "LIBOR Telerate" is specified in the applicable Floating Interest Rate
Notice or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in
the applicable Floating Interest Rate Notice as the method for calculating
LIBOR, the rate for deposits in the Index Currency having the Index
Maturity specified in such Floating Interest Rate Notice, commencing on
such Interest Reset Date, that appears on the Designated LIBOR Page as of
11:00 a.m., London time, on such LIBOR Interest Determination Date. If
fewer than two such offered rates appear, or if no such rate appears, as
applicable, LIBOR on such LIBOR Interest Determination Date will be
determined in accordance with the provisions described in clause (ii)
below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear, or no rate appears, as the case may
be, on the Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, after consultation with the Company, to provide the
Calculation Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity specified in the applicable
Floating Interest Rate Notice, commencing on the applicable Interest Reset
Date, to prime banks in the London interbank market at approximately 11:00
a.m., London time, on such LIBOR Interest Determination Date and in a
principal amount that is representative for a single transaction in such
Index Currency in such market at such time. If at least two such quotations
are so provided, then LIBOR on such LIBOR Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00
a.m., in the applicable Principal Financial Center, on such LIBOR Interest
Determination Date by three major banks in such Principal Financial Center
selected by the Calculation Agent, after consultation with the Company, for
loans in the Index Currency to leading European banks, having the Index
Maturity specified in the applicable Floating Interest Rate Notice and in a
principal amount that is representative for a single transaction in such
Index Currency in such market at such time; provided, however, that if the
banks so selected by the Calculation Agent are not quoting as
26
<PAGE> 28
mentioned in this sentence, LIBOR determined as of such LIBOR Interest
Determination Date will be LIBOR in effect on such LIBOR Interest
Determination Date.
"Index Currency" means the currency or composite currency specified in the
applicable Floating Interest Rate Notice as to which LIBOR shall be calculated.
If no such currency or composite currency is specified in the applicable
Floating Interest Rate Notice, the Index Currency shall be United States
dollars.
"Principal Financial Center" means the capital city of the country issuing
the Index Currency, except that with respect to United States dollars,
Australian dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss francs
and ECUs, the Principal Financial Center shall be New York City, Sydney,
Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in the
applicable Floating Interest Rate Notice, the display on the Reuters Monitor
Money Rates Service (or any successor service) for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency, or (b)
if "LIBOR Telerate" is specified in the applicable Floating Interest Rate Notice
or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
Floating Interest Rate Notice as the method for calculating LIBOR, the display
on the Dow Jones Telerate Service (or any successor service) for the purpose of
displaying the London interbank rates of major banks for the applicable Index
Currency.
Prime Rate. Unless otherwise specified in the applicable Floating Interest
Rate Notice, "Prime Rate" means, with respect to any Interest Determination Date
relating to a Long Term Rate Period for which the interest rate is determined
with reference to the Prime Rate (a "Prime Rate Interest Determination Date"),
the rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 p.m., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as hereinafter defined) as such bank's
prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
NYMF Page for such Prime Rate Interest Determination Date, then the Prime Rate
shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by a 360-day year as of the close of
business on such Prime Rate Interest Determination Date by four major money
center banks in New York City selected by the Calculation Agent, after
consultation with the Company. If fewer than four such quotations are so
provided, then the Prime Rate shall be the arithmetic mean of four prime rates
quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date as furnished in New York City by the major money center
banks, if any, that have provided such quotations and by as many substitute
banks or trust companies as necessary in order to obtain four such prime rate
quotations, provided such substitute banks or trust companies are organized and
doing business under the laws of the United States, or any State thereof, have
total equity capital of at least $500 million and are subject to supervision or
examination by Federal or State authority, selected by the Calculation Agent,
after consultation with the Company, to provide such rate or rates; provided,
however, that if the banks or trust companies so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate determined
as of such Prime Rate Interest Determination Date will be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
Treasury Rate. Unless otherwise specified in the applicable Floating
Interest Rate Notice, "Treasury Rate" means, with respect to any Interest
Determination Date relating to a Long Term Rate Period for which the interest
rate is determined by reference to the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified in the applicable
Floating Interest Rate Notice, as such rate is published in H.15(519) under the
heading "Treasury Bills-auction average (investment)" or, if not published by
3:00 p.m., New York City time, on the related
27
<PAGE> 29
Calculation Date, the auction average rate of such Treasury Bills (expressed as
a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the Auction of Treasury Bills
having the Index Maturity specified in the applicable Floating Interest Rate
Notice are not reported as provided by 3:00 p.m., New York City time, on the
related Calculation Date, or if no such Auction is held, then the Treasury Rate
will be calculated by the Calculation Agent, after consultation with the
Company, and will be a yield to maturity (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates, as of approximately
3:30 p.m., New York City time, on such Treasury Rate Interest Determination
Date, of three leading primary United States government securities dealers
(which may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent, after consultation with the Company, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity specified
in the applicable Floating Interest Rate Notice; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate determined as of such Treasury Rate Interest
Determination Date will be the Treasury Rate in effect on such Treasury Rate
Interest Determination Date.
DTC BOOK-ENTRY-ONLY SYSTEM
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be registered under a book-entry-only system maintained by
The Depository Trust Company, New York, New York ("DTC"). The book-entry-only
system will evidence ownership interests in the Debt Securities in book-
entry-only form. Purchasers of ownership interests in the Debt Securities will
not receive certificates representing their interests in the Debt Securities
purchased. Transfers of ownership interests will be effected on the records of
DTC and its participating organizations (the "DTC Participants") pursuant to
rules and procedures established by DTC.
Certain of the following information concerning the procedures and record
keeping with respect to ownership interests in the Debt Securities, payment of
interest and other payments on the Debt Securities to DTC Participants or
Beneficial Owners (as hereafter defined), confirmation and transfer of ownership
interests in the Debt Securities and other related transactions by and between
DTC, the DTC Participants and Beneficial Owners is based solely on information
contained in a published report of DTC.
DTC, an automated clearinghouse for securities transactions, will act as
securities depository for the Debt Securities. DTC is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the 1934 Act. DTC was created to hold securities of
the DTC Participants and to facilitate the clearance and settlement of
securities transactions among DTC Participants in such securities through
electronic book-entry changes in accounts of the DTC Participants, thereby
eliminating the need for physical movement of security certificates. DTC
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations, some of which (and/or
their representatives) own DTC. Access to the DTC system is also available to
others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or
indirectly (the "Indirect Participants").
The ownership of the fully-registered Debt Securities will be registered in
the name of Cede & Co., as nominee for DTC. Ownership interests in the Debt
Securities may be purchased by or through DTC Participants and will be recorded
on the records of the DTC Participants, whose interests in turn will be recorded
on a computerized book-entry-only system operated by DTC. Such DTC Participants
and the person for whom they acquire interests in the Debt Securities as
nominees ("Beneficial Owner") will not receive Debt Security certificates, but
each such DTC Participant will receive a credit balance in the records of DTC in
the amount of such DTC Participant's interest in the Debt Securities, which will
be confirmed in accordance with DTC's standard procedures. Each such Beneficial
Owner for whom a DTC Participant acquires an interest in the Debt Securities, as
nominee, may desire to make arrangements with such DTC Participant to have all
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communications of the Company and the Trustee to DTC which may affect such
Beneficial Owner forwarded in writing by such DTC Participant and to have
notifications made of all payments of principal and interest with respect to his
beneficial interest. The Company and the Trustee will treat DTC (or its nominee)
as the sole and exclusive owner of the Debt Securities registered in its name
for the purposes of payment of the principal and interest on the Notes, giving
any notice permitted or required to be given to holders under the Indenture,
registering the transfer of Notes, and for all other purposes whatsoever, and
shall not be affected by any notice to the contrary. The Company and the Trustee
shall not have any responsibility or obligation to any DTC Participant, any
person claiming a beneficial ownership interest in the Debt Securities under or
through DTC or any DTC Participant, or any other person which is not shown on
the registration books of the Trustee as being a holder, with respect to: (i)
the accuracy of any records maintained by DTC or any DTC Participant; (ii) the
payment by DTC or any DTC Participant of any amount in respect of the principal
or interest on the Debt Securities; (iii) any notice which is permitted or
required to be given to holders thereunder or under the conditions to transfers
or exchanges adopted by the Company; or (iv) any other action taken by DTC as a
holder. Principal and interest on the Debt Securities will be paid by the
Trustee or, in the case of any Remarketed Notes, the Remarketing Agent to DTC or
its nominee. Disbursement of such payments to the DTC Participants is the
responsibility of DTC and disbursement of such payments to the Beneficial Owners
is the responsibility of the DTC Participants or the Indirect Participants.
NEITHER THE COMPANY NOR THE TRUSTEE NOR, IN THE CASE OF ANY SERIES OF REMARKETED
NOTES, THE REMARKETING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO SUCH
DTC PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO
THE PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE DTC PARTICIPANTS, OR THE
INDIRECT PARTICIPANTS, OR THE BENEFICIAL OWNERS.
SO LONG AS CEDE & CO., AS NOMINEE OF DTC, IS THE REGISTERED OWNER OF THE
DEBT SECURITIES, REFERENCES HEREIN TO THE SECURITY HOLDERS OR REGISTERED OWNERS
OF THE DEBT SECURITIES SHALL MEAN CEDE & CO., AND SHALL NOT MEAN THE BENEFICIAL
OWNERS.
For every transfer and exchange of beneficial ownership of Debt Securities,
a Beneficial Owner may be charged a sum sufficient to cover any tax, fee or
other governmental charge that may be imposed in relation thereto.
When reference is made to any action which is required or permitted to be
taken by the Beneficial Owners, such reference shall only relate to action by
such Beneficial Owner, or others permitted to act (by statute, regulation or
otherwise) on behalf of such Beneficial Owners for such purposes. When notices
are given, they shall be sent by the Trustee to DTC only. Conveyance of notices
and other communications by DTC to DTC Participants and Indirect Participants
and in turn by DTC Participants and Indirect Participants to Beneficial Owners
will be governed by arrangements among them, subject to any statutory and
regulatory requirements then in effect.
Principal and interest payments on the Debt Securities will be made to DTC
or its nominee, Cede & Co., as registered owner of the Debt Securities. Upon
receipt of any such payments, DTC's current practice is to immediately credit
the accounts of the DTC Participants in accordance with their respective
holdings shown on the records of DTC. Payments by DTC Participants and Indirect
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such DTC Participant or Indirect Participant.
DTC may determine to discontinue providing its services with respect to the
Debt Securities at any time by giving notice to the Company and discharging its
responsibilities with respect thereto under applicable law. In addition, the
Company may determine that continuation of the system of book-entry-only
transfers through DTC (or a successor securities depository) is not in the best
interests of the Beneficial Owners or is burdensome to the Company. If for
either reason the book-entry-only system is discontinued, certificates for the
Debt Securities will be delivered to the Beneficial Owners thereof.
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Certain of the information contained in this sub-section has been extracted
from a report from DTC. No representation is made by the Company as to the
completeness or the accuracy of such information or as to the absence of
material adverse changes in such information subsequent to the date hereof.
Same-Day Settlement and Payment
Unless otherwise indicated in the applicable Prospectus Supplement,
settlement for the Debt Securities will be made by a purchaser in immediately
available funds. While the Debt Securities are in the book-entry-only system
described above, all payments of principal and interest will be made by the
Trustee or, in the case of any series of Remarketed Notes, the Remarketing Agent
on behalf of the Company to DTC in immediately available funds.
Secondary trading in long-term debt securities is generally settled in
clearing-house or next-day funds. Unless otherwise set forth in the applicable
Prospectus Supplement, while the Debt Securities are in the book-entry-only
system described above, they will trade in DTC's Same-Day Fund Settlement System
until maturity. During such period, secondary market trading activity in the
Debt Securities will settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
the trading activity in the Debt Securities.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary, which is based upon the advice of Woodard, Hall &
Primm, P.C., Houston, Texas, special tax counsel to the Company whose opinion is
set forth herein, of certain United States Federal income tax consequences of
the purchase, ownership and disposition of the Debt Securities is based upon
laws, regulations, rulings and decisions now in effect (or, in the case of
certain regulations, in proposed form), all of which are subject to change
(including changes in effective dates) or possible differing interpretations. It
deals only with Debt Securities held as capital assets and does not purport to
deal with persons in special tax situations, such as financial institutions,
insurance companies, regulated investment companies, dealers in securities or
currencies, persons holding Debt Securities as a hedge against currency risks or
as a position in a "straddle" for tax purposes, or persons whose functional
currency is not the United States dollar. It also does not deal with holders
other than original purchasers (except where otherwise specifically noted).
Persons considering the purchase of the Debt Securities should consult their own
tax advisors concerning the application of United States Federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the Debt Securities arising under the laws of any
other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Debt
Security that is for United States Federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source or
(iv) any other person whose income or gain in respect of a Debt Security is
effectively connected with the conduct of a United States trade or business. As
used herein, the term "non-U.S. Holder" means a holder of a Debt Security that
is not a U.S. Holder.
U.S. Holders
Payments of Interest. Payments of interest on a Debt Security generally
will be taxable to a U.S. Holder as ordinary interest income at the time such
payments are accrued or are received (in accordance with the U.S. Holder's
regular method of tax accounting).
Original Issue Discount. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of Debt Securities issued with original
issue discount ("Discount Debt Securities"). The following summary is based upon
final Treasury regulations (the "OID Regulations") released by the Internal
Revenue Service ("IRS") on January 27, 1994 under the original issue discount
provisions of the Internal Revenue Code of 1986, as
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amended (the "Code"). The OID Regulations, which replaced certain proposed
original issue discount regulations that were issued on December 21, 1992 ("the
1992 Proposed Regulations"), generally apply to debt instruments issued on or
after April 4, 1994.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Debt Security over
its issue price, if such excess equals or exceeds a de minimis amount (generally
1/4 of 1% of the Debt Security's stated redemption price at maturity multiplied
by the number of complete years to its maturity from its issue date or, in the
case of a Debt Security providing for the payment of any amount other than
qualified stated interest, as defined below, prior to maturity, multiplied by
the weighted average maturity of such Debt Security). The issue price of an
issue of Debt Securities equals the first price at which a substantial amount of
such Debt Securities has been sold (ignoring sales to bond houses, brokers, or
similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers). The stated redemption price at maturity of a
Debt Security is the sum of all payments provided by the Debt Security other
than "qualified stated interest" payments. The term "qualified stated interest"
generally means stated interest that is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually at a
single fixed rate. In addition, under the OID Regulations, if a Debt Security
bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of such Debt Security (e.g., Debt Securities
with teaser rates or interest holidays), and if the greater of either the
resulting foregone interest on such Debt Security or any "true" discount on such
Debt Security (i.e., the excess of the Debt Security's stated principal amount
over its issue price) equals or exceeds a specified de minimis amount, then the
stated interest on the Debt Security would be treated as original issue discount
rather than qualified stated interest.
Payments of qualified stated interest on a Debt Security are taxable to a
U.S. Holder as ordinary interest income at the time such payments are accrued or
are received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Debt Security must include original
issue discount in income as ordinary interest for United States Federal income
tax purposes as it accrues over the entire term of the Discount Debt Security
under a constant yield method in advance of receipt of the cash payments
attributable to such income, regardless of such U.S. Holder's regular method of
tax accounting. In general, the amount of original issue discount includible in
income by the initial U.S. Holder of a Discount Debt Security is the sum of the
daily portions of original issue discount with respect to such Discount Debt
Security for each day during the taxable year (or portion of the taxable year)
on which such U.S. Holder held such Discount Debt Security. The "daily portion"
of original issue discount on any Discount Debt Security is determined by
allocating to each day in any accrual period a ratable portion of the original
issue discount allocable to that accrual period. An "accrual period" may be of
any length and the accrual period may vary in length over the term of the
Discount Debt Security, provided that each accrual period is no longer than one
year and each scheduled payment of principal or interest occurs either on the
final day of an accrual period or on the first day of an accrual period. The
amount of original issue discount allocable to each accrual period is generally
equal to the difference between (i) the product of the Discount Debt Security's
adjusted issue price at the beginning of such accrual period and its yield to
maturity (determined on the basis of compounding at the close of each accrual
period and appropriately adjusted to take into account the length of the
particular accrual period) and (ii) the amount of any qualified stated interest
payments, allocable to such accrual period. The "adjusted issue price" of a
Discount Debt Security at the beginning of any accrual period is the sum of the
issue price of the Discount Debt Security plus the amount of original issue
discount allocable to all prior accrual periods minus the amount of any prior
payments on the Discount Debt Security that were not qualified stated interest
payments. Under these rules, U.S. Holders generally will have to include in
income increasingly greater amounts of original issue discount in successive
accrual periods.
A U.S. Holder who purchases a Discount Debt Security for an amount that is
greater than its adjusted issue price as of the purchase date and less than or
equal to the sum of all amounts payable on the Discount Debt Security after the
purchase date other than payments of qualified stated interest, will be
considered to have purchased the Discount Debt Security at an "acquisition
premium." Under the acquisition premium rules, the amount of original issue
discount which such U.S. Holder must include in its gross income with respect to
such Discount Debt Security for any taxable year (or portion thereof in which
the U.S. Holder
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holds the Discount Debt Security) will be reduced (but not below zero) by the
portion of the acquisition premium properly allocable to the period.
Under the OID Regulations, Debt Securities that provide for stated interest
at one or more variable interest rates ("Floating Rate Debt Securities") are
subject to special rules whereby a Floating Rate Debt Security will qualify as a
"variable rate debt instrument" if (a) its issue price does not exceed the total
noncontingent principal payments due under the Floating Rate Debt Security by
more than a specified de minimis amount and (b) it provides for stated interest,
paid or compounded at least annually, at current values of (i) one or more
qualified floating rates, (ii) a single fixed rate and one or more qualified
floating rates, (iii) a single objective rate, or (iv) a single fixed rate and a
single objective rate that is a qualified inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Floating Rate Debt Security is denominated. Although a multiple of a qualified
floating rate will generally not itself constitute a qualified floating rate, a
variable rate equal to the product of a qualified floating rate and a fixed
multiple that is greater than zero but not more than 1.35 will constitute a
qualified floating rate. A variable rate equal to the product of a qualified
floating rate and a fixed multiple that is greater than zero but not more than
1.35, increased or decreased by a fixed rate, will also constitute a qualified
floating rate. In addition, under the OID Regulations, two or more qualified
floating rates that can reasonably be expected to have approximately the same
values throughout the term of the Floating Rate Debt Security (e.g., two or more
qualified floating rates with values within 25 basis points of each other as
determined on the Floating Rate Debt Security's issue date) will be treated as a
single qualified floating rate. Notwithstanding the foregoing, a variable rate
that would otherwise constitute a qualified floating rate but which is subject
to one or more restrictions such as a maximum numerical limitation (i.e., a cap)
or a minimum numerical limitation (i.e., a floor) may under certain
circumstances, fail to be treated as a qualified floating rate under the OID
Regulations. An "objective rate" is a rate that is not itself a qualified
floating rate but which is determined using a single fixed formula and which is
based upon (i) one or more qualified floating rates, (ii) one or more rates
where each rate would be a qualified floating rate for a debt instrument
denominated in a currency other than the currency in which the Floating Rate
Debt Security is denominated, (iii) either the yield or changes in the price of
one or more items of actively traded personal property (other than stock or debt
of the issuer or a related party) or (iv) a combination of objective rates. The
OID Regulations also provide that other variable interest rates may be treated
as objective rates if so designated by the IRS in the future. Despite the
foregoing, a variable rate of interest on a Floating Rate Debt Security will not
constitute an objective rate if it is reasonably expected that the average value
of such rate during the first half of the Floating Rate Debt Security's term
will be either significantly less than or significantly greater than the average
value of the rate during the final half of the Floating Rate Debt Security term.
In 1994 the Treasury Department issued new proposed regulations (the "1994
Proposed Regulations") which, if adopted, would redefine "objective rate," to
mean a rate (other than a qualified floating rate) determined using a single
fixed formula and based on objective financial or economic information. Under
the 1994 Proposed Regulations, a rate unique to the circumstances of the issuer
or a related party, or based on information within the control of the issuer or
a related party, would not qualify as an objective rate, but a rate based on the
credit quality of the issuer would not, solely on that basis, be disqualified as
an objective rate. The 1994 Proposed Regulations are generally proposed to be
effective for debt obligations issued on or after the date that is 60 days after
the date on which the 1994 Proposed Regulations (or successor regulations
thereto) are published as final Treasury regulations in the Federal Register.
The Treasury Department has not indicated whether taxpayers willing to apply the
1994 Proposed Regulations to debt obligations issued after publication of the
1994 Proposed Regulations but prior to their publication as final regulations
will be able to do so. In the absence of such permission the present definition
of "objective rate" discussed above would continue to be applied.
A "qualified inverse floating rate" is any objective rate where such rate
is equal to a fixed rate minus a qualified floating rate, as long as variations
in the rate can reasonably be expected to inversely reflect contemporaneous
variations in the cost of newly borrowed funds. The OID Regulations also provide
that if a
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Floating Rate Debt Security provides for stated interest at a fixed rate for an
initial period of less than one year followed by a variable rate that is either
a qualified floating rate or an objective rate and if the variable rate on the
Floating Rate Debt Security's issue date is intended to approximate the fixed
rate (e.g., the value of the variable rate on the issue date does not differ
from the value of the fixed rate by more than 25 basis points), then the fixed
rate and the variable rate together will constitute either a single qualified
floating rate or objective rate, as the case may be.
If a Floating Rate Debt Security that provides for stated interest at
either a single qualified floating rate or a single objective rate throughout
the term thereof qualifies as a "variable rate debt instrument" under the OID
Regulations, then any stated interest on such Debt Security which is
unconditionally payable in cash or property (other than debt instruments of the
issuer) at least annually will constitute qualified stated interest and will be
taxed accordingly. Thus, a Floating Rate Debt Security that provides for stated
interest at either a single qualified floating rate or a single objective rate
throughout the term thereof and that qualifies as a "variable rate debt
instrument" under the OID Regulations will generally not be treated as having
been issued with original issue discount unless the Floating Rate Debt Security
is issued at a "true" discount (i.e., at a price below the Debt Security's
stated principal amount) in excess of a specified de minimis amount. Original
issue discount on such a Floating Rate Debt Security arising from "true"
discount is allocated to an accrual period using the constant yield method
described above by assuming that the variable rate is a fixed rate equal to (i)
in the case of a qualified floating rate or qualified inverse floating rate, the
value, as of the issue date, of the qualified floating rate or qualified inverse
floating rate, or (ii) in the case of an objective rate (other than a qualified
floating rate or qualified inverse floating rate), a fixed rate that reflects
the yield that is reasonably expected for the Floating Rate Debt Security.
In general, any other Floating Rate Debt Security that qualifies as a
"variable rate debt instrument" will be converted into an "equivalent" fixed
rate debt instrument for purposes of determining the amount and accrual of
original issue discount and qualified stated interest on the Floating Rate Debt
Security. The OID Regulations generally require that such a Floating Rate Debt
Security be converted into an "equivalent" fixed rate debt instrument by
substituting any qualified floating rate or qualified inverse floating rate
provided for under the terms of the Floating Rate Debt Security with a fixed
rate equal to the value of the qualified floating rate or qualified inverse
floating rate, as the case may be, as of the Floating Rate Debt Security's issue
date. Any objective rate (other than a qualified inverse floating rate) provided
for under the terms of the Floating Rate Debt Security is converted into a fixed
rate that reflects the yield that is reasonably expected for the Floating Rate
Debt Security. In the case of a Floating Rate Debt Security that qualifies as a
"variable rate debt instrument" and provides for stated interest at a fixed rate
in addition to either one or more qualified floating rates or a qualified
inverse floating rate, the fixed rate is initially converted into a qualified
floating rate (or a qualified inverse floating rate, if the Floating Rate Debt
Security provides for a qualified inverse floating rate). Under such
circumstances, the qualified floating rate or qualified inverse floating rate
that replaces the fixed rate must be such that the fair market value of the
Floating Rate Debt Security as of the Floating Rate Debt Security's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Floating Rate Debt Security is then converted into an
"equivalent" fixed rate debt instrument in the manner described above.
Once the Floating Rate Debt Security is converted into an "equivalent"
fixed rate debt instrument pursuant to the foregoing rules, the amount of
original issue discount and qualified stated interest, if any, are determined
for the "equivalent" fixed rate debt instrument by applying the general original
issue discount rules to the "equivalent" fixed rate debt instrument and a U.S.
Holder of the Floating Rate Debt Security will account for such original issue
discount and qualified stated interest as if the U.S. Holder held the
"equivalent" fixed rate debt instrument. Each accrual period appropriate
adjustments will be made to the amount of qualified stated interest or original
issue discount assumed to have been accrued or paid with respect to the
"equivalent" fixed rate debt instrument in the event that such amounts differ
from the actual amount of interest accrued or paid on the Floating Rate Debt
Security during the accrual period.
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If a Floating Rate Debt Security does not qualify as a "variable rate debt
instrument" under the OID Regulations, the Floating Rate Debt Security would be
treated as a contingent payment debt obligation. It is not entirely clear under
current law how a Floating Rate Debt Security would be taxed if such Floating
Rate Debt Security were treated as a contingent payment debt obligation. The
proper United States Federal income tax treatment of Floating Rate Debt
Securities that are treated as contingent payment debt obligations will be more
fully described in the applicable Pricing Supplement. Furthermore, any other
special United States Federal income tax considerations not otherwise discussed
herein, which are applicable to any particular issue of Floating Rate Debt
Securities, will be discussed in the applicable Pricing Supplement.
Certain of the Debt Securities (i) may be redeemable at the option of the
Company prior to their stated maturity (a "call option") and/or (ii) may be
repayable at the option of the holder prior to their stated maturity (a "put
option"). Debt Securities containing such features may be subject to rules that
differ from the general rules discussed above. Investors intending to purchase
Debt Securities with such features should consult their own tax advisors, since
the original issue discount consequences will depend, in part, on the particular
terms and features of the purchased Debt Securities. Additionally, upon the
occurrence of a "Change in Control" as defined in the Indenture, each Holder of
Debt Securities of any series then outstanding may elect, by proper execution
and delivery of a Change in Control Purchase Notice, to require the Company to
purchase such Debt Securities prior to their stated maturity. The original issue
discount consequences of such an election and purchase will depend on the
particular terms and features of the Debt Securities, and Holders should consult
their own tax advisors prior to making such an election.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions. This election is only available for debt instruments
acquired on or after April 4, 1994.
Remarketed Notes. Under general principles of current United States Federal
income tax law, payments of interest on a Remarketed Note generally would be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular method
of tax accounting). Under these principles, all interest payable with respect to
the Remarketed Notes at the Initial Interest Rate generally would be includible
in income by a U.S. Holder as ordinary interest when such interest is accrued or
received. Any amounts payable on Remarketed Notes in the Short Term Rate Mode or
in the Long Term Rate Mode would be treated as contingent interest and generally
would be includible in income by a U.S. Holder as ordinary interest on the
respective dates that the amount of such interest is accrued or when such amount
is received.
Although the matter is not free from doubt, each Short Term Rate Mode and
certain Long Term Rate Modes should individually constitute separate qualified
floating rates under the OID Regulations. The Remarketed Notes will initially
bear interest at the Initial Interest Rate. Thereafter, each Remarketed Note
will bear interest in either the Short Term Rate Mode or the Long Term Rate
Mode.
Since the Remarketed Notes provide for payment of 100% of the principal
amount thereof at maturity and assuming that the Remarketed Notes will not be
issued at a premium in excess of the de minimis premium permitted under the OID
Regulations for qualification as a "variable rate debt instrument", depending
upon how often the Remarketed Notes are converted into different Interest Rate
Modes and depending upon which Interest Rate Modes the Remarketed Notes are
converted into, it could be argued that some of the Remarketed Notes should
qualify as "variable rate debt instruments" under the OID Regulations and should
not be treated as contingent payment debt obligations. If any of the Remarketed
Notes were to qualify as "variable rate debt instruments" under the OID
Regulations, all payments of interest on such Remarketed Notes generally should
constitute payments of qualified stated interest and should be taxed
accordingly.
Despite the foregoing, because it will be unknown, as of the original
issuance of the Remarketed Notes, whether or to what extent the Company will
convert the Remarketed Notes from one Interest Rate Mode to
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another, none of the Remarketed Notes may qualify as "variable rate debt
instruments" under the OID Regulations and all of the Remarketed Notes may be
treated as contingent payment debt obligations, regardless of the extent to
which the Company actually converts the Remarketed Notes from one Interest Rate
Mode to another. Due to the uncertainty surrounding the proper treatment of the
Remarketed Notes under the OID Regulations, prospective investors in the
Remarketed Notes are advised to consult their own tax advisors regarding the
proper treatment of the Remarketed Notes under the OID Regulations.
If the Remarketed Notes do not qualify as "variable rate debt instruments"
under the OID Regulations, the Remarketed Notes will be treated as contingent
payment debt obligations. It is not entirely clear under current law how the
Remarketed Notes would be taxed if they were treated as contingent payment debt
obligations. As previously discussed, under general principles of current United
States Federal income tax law, any amounts payable with respect to Remarketed
Notes in the Short Term Rate Mode or in the Long Term Rate Mode should be
treated as contingent interest and generally should be includible in income by a
U.S. Holder as ordinary interest on the respective dates that the amount of such
interest is accrued or when such amount is received. All interest payable with
respect to the Remarketed Notes at the Initial Interest Rate generally should be
includible in a U.S. Holder's income as ordinary interest when such interest is
accrued or received.
In 1986, the Treasury Department issued proposed regulations (the "1986
Proposed Regulations") under the original issue discount provisions of the Code
concerning contingent payment debt obligations. In 1991, the Treasury Department
proposed an amendment to the 1986 Proposed Regulations (the "1991 Amendment")
that would have required bifurcation of certain contingent debt obligations into
their component parts. Neither the 1992 Proposed Regulations nor the OID
Regulations contained rules for contingent payment debt obligations. In response
to criticism of the proposed treatment of contingent payment debt obligations
under both the 1986 Proposed Regulations and the 1991 Amendment, the Treasury
Department in 1994 issued the 1994 Proposed Regulations concerning contingent
payment debt obligations, superseding both the 1986 Proposed Regulations and the
1991 Amendment which were withdrawn.
The 1994 Proposed Regulations are generally proposed to be effective for
debt obligations issued on or after the date that is 60 days after the date on
which the 1994 Proposed Regulations (or successor regulations thereto) are
published as final Treasury regulations in the Federal Register. The Treasury
Department has not indicated whether taxpayers willing to apply the 1994
Proposed Regulations consistently to contingent payment debt obligations issued
after publication of the 1994 Proposed Regulations, but prior to their
publication as final regulations will be permitted to do so. In the absence of
such permission, contingent payment debt obligations issued in advance of final
regulations will be treated for tax purposes under general principles of Federal
income tax law as described above. Thus, if (a) the Remarketed Notes were
treated as contingent payment debt obligations, (b) the Treasury Department
provides that the 1994 Proposed Regulations may be applied to contingent payment
debt obligations issued in advance of adoption of final regulations, and (c) the
1994 Proposed Regulations are ultimately adopted in their current form, then the
1994 Proposed Regulations could be applied to the Remarketed Notes.
Under the 1994 Proposed Regulations, contingent payment debt obligations
issued for cash or publicly traded property are subject to the "noncontingent
bond method," under which interest on the debt obligation is taken into account
whether or not the amount of any payment is fixed or determinable in the taxable
year, based on a projected payment schedule including each noncontingent payment
and the projected amount of each contingent payment. The issuer determines the
projected payment schedule as of the issue date of the obligation, which remains
fixed throughout the term of the obligation, and to which all holders of the
obligation are bound unless the projected schedule is unreasonable. Debt
obligations subject to the noncontingent bond method are required to set forth
the projected payment schedule on the face of the debt instrument. Interest
generally is accrued under the noncontingent bond method according to generally
applicable rules provided by the OID Regulations. Since no interest on these
instruments is treated as qualified stated interest under the OID Regulations,
all interest income and expense is calculated as original issue discount.
Differences between the projected amount of a contingent payment and the actual
amount of the payment result in periodic positive and negative adjustments that
are netted for each taxable year.
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If the 1994 Proposed Regulations were applied to the Remarketed Notes, the
adjusted positive amount, after netting, of interest that accrues with respect
to a Remarketed Note in a taxable year in which interest is payable at a rate
other than the Initial Interest Rate should be treated as ordinary interest, and
generally should be includible in income by a U.S. Holder for the taxable year.
The adjusted negative amount, after netting, of actual interest first reduces
projected interest considered to accrue for the taxable year, then is treated as
ordinary loss by a U.S. Holder and as ordinary income by the issuer, up to the
amount of previously accrued interest income on the obligation, to the extent
not previously affected by prior years' net negative adjustments. The amount of
principal due and payable with respect to a Remarketed Note at maturity, or upon
earlier redemption of the Remarketed Note, should be treated by a U.S. Holder as
a return of principal. Under the noncontingent bond method, any gain recognized
by a U.S. Holder on the sale, exchange, or retirement of a contingent payment
debt obligation is treated as interest income. Any loss recognized by a U.S.
Holder on the sale, exchange or retirement of a contingent payment debt
obligation is treated as ordinary loss, to the extent of the U.S. Holder's prior
interest inclusions (reduced by prior ordinary losses attributable to net
negative adjustments) on the obligation. Any residual negative adjustment
carryforward remaining on such obligation at its sale, exchange or retirement is
treated as a capital loss.
There is no assurance that the 1994 Proposed Regulations will be adopted,
or if adopted, adopted in their current form. The 1994 Proposed Regulations are
not binding upon either the IRS or taxpayers prior to becoming effective as
temporary or final regulations. Thus, the Company, where required, intends to
file information returns with the IRS reporting payments on any Debt Securities
that are treated as contingent payment debt obligations in accordance with
general principles of current United States Federal Income tax law, in the
absence of any change or clarification in the law, by regulation or otherwise,
requiring that another method be used. In general, if ultimately adopted in
their current form, the 1994 Proposed Regulations would cause the timing and
character of income, gain or loss reported on a contingent payment debt
obligation to differ substantially from the timing and character of income, gain
or loss reported on a contingent payment debt obligation under general
principles of Federal income tax law. Prospective investors in the Remarketed
Notes are urged to consult their own tax advisors regarding the application of
the 1994 Proposed Regulations and the OID Regulations to their investment in the
Remarketed Notes and the effect on their investment in the Remarketed Notes of
possible changes to the 1994 Proposed Regulations and the OID Regulations.
Short-Term Debt Securities. Debt Securities that have a fixed maturity of
one year or less ("Short-Term Debt Securities") will be treated as having been
issued with original issue discount. In general, an individual or other cash
method U.S. Holder is not required to accrue such original issue discount unless
the U.S. Holder elects to do so. If such an election is not made, any gain
recognized by the U.S. Holder on the sale, exchange or maturity of the
Short-Term Debt Security will be ordinary income to the extent of the original
issue discount accrued on a straight-line basis, or upon election under the
constant yield method (based on daily compounding), through the date of sale or
maturity, and a portion of the deductions otherwise allowable to the U.S. Holder
for interest on borrowings allocable to the Short-Term Debt Security will be
deferred until a corresponding amount of income is realized. U.S. Holders who
report income for United States Federal income tax purposes under the accrual
method, and certain other holders including banks and dealers in securities, are
required to accrue original issue discount on a Short-Term Debt Security on a
straight-line basis unless an election is made to accrue the original issue
discount under a constant yield method (based on daily compounding).
Market Discount. If a U.S. Holder purchases a Debt Security, other than a
Discount Debt Security, for an amount that is less than its issue price (or, in
the case of a subsequent purchaser, its stated redemption price at maturity) or,
in the case of a Discount Debt Security, for an amount that is less than its
adjusted issue price as of the purchase date, such U.S. Holder will be treated
as having purchased such Debt Security "market discount," unless such market
discount is less than a specified de minimis amount.
Under the market discount rules a U.S. Holder will be required to treat any
partial principal payment (or, in the case of a Discount Debt Security, any
payment that does not constitute qualified stated interest) on, or any gain
realized on the sale, exchange, retirement or other disposition of, a Debt
Security as ordinary income to the extent of the lesser of (i) the amount of
such payment or realized gain or (ii) the market discount which has not
previously been included in income and is treated as having accrued on such Debt
Security at
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<PAGE> 38
the time of such payment or disposition. Market discount will be considered to
accrue ratably during the period from the date of acquisition to the maturity
date of the Debt Security, unless the U.S. Holder elects to accrue market
discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Debt Security with market discount until the maturity of the
Debt Security or its earlier disposition in a taxable transaction, because a
current deduction is only allowed to the extent the interest expense exceeds an
allocable portion of market discount. A U.S. Holder may elect to include market
discount in income currently as it accrues (on either a ratable or semiannual
compounding basis), in which case the rules described above regarding the
treatment as ordinary income of gain upon the disposition of the Debt Security
and upon the receipt of certain cash payments and regarding the deferral of
interest deductions will not apply. Generally, such currently included market
discount is treated as ordinary interest for United States Federal income tax
purposes.
Premium. If a U.S. Holder purchases a Debt Security for an amount that is
greater than the sum of all amounts payable on the Debt Security after the
purchase date other than payments of qualified stated interest, such U.S. Holder
will be considered to have purchased the Debt Security with "amortizable bond
premium" equal in amount to such excess. A U.S. Holder may elect to amortize
such premium using a constant yield method over the remaining term of the Debt
Security and may offset interest otherwise required to be included in respect of
the Debt Security during any taxable year by the amortized amount of such excess
for the taxable year. However, if the Debt Security may be optionally redeemed
after the U.S. Holder acquires it at a price in excess of its stated redemption
price at maturity, special rules would apply which could result in a deferral of
the amortization of some bond premium until later in the term of the Debt
Security.
Disposition of a Note. Except as discussed above, upon the sale, exchange
or retirement of a Debt Security, a U.S. Holder generally will recognize taxable
gain or loss equal to the difference between the amount realized on the sale,
exchange or retirement and such U.S. Holder's adjusted tax basis in the Debt
Security. A U.S. Holder's adjusted tax basis in a Debt Security generally will
equal such U.S. Holder's initial investment in the Debt Security increased by
any original issue discount included in income (and accrued market discount, if
any, if the U.S. Holder has included such market discount in income) and
decreased by the amount of any payments, other than qualified stated interest
payments, received and amortizable bond premium taken with respect to such Debt
Security. Such gain or loss generally will be long-term capital gain or loss if
the Debt Security were held for more than one year.
Foreign Currency Debt Securities. Any special United States Federal income
tax considerations applicable to Debt Securities that provide for the payment of
principal, premium (if any) or interest in a currency other than U.S. dollars
will be discussed in the applicable Prospectus Supplement.
Non-U.S. Holders
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount, if any) on a Debt Security, unless such non-U.S. Holder is a direct or
indirect 10% or greater shareholder of the Company, a controlled foreign
corporation related to the Company or a bank receiving interest described in
section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation,
the last United States payor in the chain of payment prior to payment to a
non-U.S. Holder (the "Withholding Agent") must have received in the year in
which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the beneficial owner
of the Debt Security under penalties of perjury, (ii) certifies that such owner
is not a U.S. Holder and (iii) provides the name and address of the beneficial
owner. The statement may be made on an IRS Form W-8 or a substantially similar
form, and the beneficial owner must inform the Withholding Agent of any change
in the information on the statement within 30 days of such change. If a Debt
Security is held through a securities clearing organization or certain other
financial institutions, the organization or institution may provide a signed
statement to the Withholding Agent. However, in such case, the signed statement
must be accompanied by a copy of the IRS Form W-8 or the substitute form
provided by the beneficial owner to the organization or institution. The
Treasury Department is considering implementation of
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<PAGE> 39
further certification requirements aimed at determining whether the issuer of a
debt obligation is related to holders thereof.
Generally, a non-U.S. Holder will not be subject to Federal income taxes on
any amount which constitutes capital gain upon retirement or disposition of a
Debt Security, provided the gain is not effectively connected with the conduct
of a trade or business in the United States by the non-U.S. Holder. Certain
other exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
The Debt Securities will not be includible in the estate of a non-U.S.
Holder unless the individual is a direct or indirect 10% or greater shareholder
of the Company or, at the time of such individual's death, payments in respect
of the Debt Securities would have been effectively connected with the conduct by
such individual of a trade or business in the United States.
Backup Withholding
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the Debt Securities to registered owners
who are not "exempt recipients" and who fail to provide certain identifying
information (such as the registered owner's taxpayer identification number) in
the required manner. Generally, individuals are not exempt recipients, whereas
corporations and certain other entities generally are exempt recipients.
Payments made in respect of the Debt Securities to a U.S. Holder must be
reported to the IRS, unless the U.S. Holder is an exempt recipient or
establishes an exemption. Compliance with the identification procedures
described in the preceding section would establish an exemption from backup
withholding for those non-U.S. Holders who are not exempt recipients.
In addition, upon the sale of a Debt Security to (or through) a broker, the
broker must withhold 31% of the entire purchase price, unless either (i) the
broker determines that the seller is a corporation or other exempt recipient or
(ii) the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such seller is
a non-U.S. Holder (and certain other conditions are met). Such a sale must also
be reported by the broker to the IRS, unless either (i) the broker determines
that the seller is an exempt recipient or (ii) the seller certifies its non-U.S.
status (and certain other conditions are met). Certification of the registered
owner's non-U.S. status would be made normally on an IRS Form W-8 under
penalties of perjury, although in certain cases it may be possible to submit
other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through underwriters or
dealers, (ii) directly to a limited number of institutional purchasers or to a
single purchaser, (iii) through agents or (iv) through any combination of the
above. An accompanying Prospectus Supplement will set forth the terms of the
offering of the Debt Securities offered thereby, including the name or names of
any underwriters, the purchase price of the Debt Securities and the net proceeds
to the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers.
If underwriters are used in the sale of Debt Securities, such Debt
Securities will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Unless otherwise set forth in the Prospectus Supplement,
the several obligations of the underwriters to purchase any Debt Securities
offered thereby will be subject to certain conditions precedent and the
underwriters will be obligated to take and pay for all of such Debt Securities,
if any are taken.
The Debt Securities may be sold directly by the Company or through
underwriters or agents designated by the Company from time to time. Any agent
involved in the offer or sale of the Debt Securities will be
38
<PAGE> 40
named, and any commissions payable by the Company to such agents will be set
forth, in an accompanying Prospectus Supplement. Unless otherwise indicated in
such Prospectus Supplement, any such agent will be acting on a reasonable
efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under such contract will be
subject to the condition that the purchase of the offered Debt Securities shall
not at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will not
have any responsibility in respect to the validity of performance of such
contracts.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act.
The place and time of delivery for the Debt Securities in respect of which
this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
LEGAL MATTERS
Certain legal matters regarding the Debt Securities offered hereby under
laws other than federal or state securities laws have been passed upon for the
Company by its Vice President and General Counsel, Z. S. Kobiashvili. As of the
date of this Prospectus, Mr. Kobiashvili owns 541 shares of Common Stock through
the Company's retirement/401(k) savings plan and holds employee stock options to
purchase 18,000 shares of Common Stock, of which 2,500 options are currently
exercisable. Certain legal matters will also be passed upon for the Company by
Woodard, Hall & Primm, P.C., Houston, Texas, and for any of the underwriters or
agents by Brown & Wood, New York, New York.
EXPERTS
The audited consolidated financial statements of the Company and the
audited statement of Combined Revenues and Direct Operating Expenses for the Oil
and Gas Properties of Texaco Exploration and Production Inc. Sold to Apache
Corporation, each incorporated by reference into this Prospectus, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto. In its report on the consolidated financial
statements of the Company, that firm states that with respect to DEKALB its
opinion is based on the report of other independent public accountants, namely
Coopers & Lybrand. The financial statements referred to above have been
incorporated by reference or included herein in reliance upon the authority of
those firms as experts in accounting and auditing in giving said reports.
The audited consolidated financial statements of DEKALB incorporated by
reference in this Registration Statement have been audited by Coopers & Lybrand,
Chartered Accountants, as indicated in their report with respect thereto, and
are incorporated herein in reliance upon the authority of said firm as experts
in accounting and auditing in giving said reports.
The information included and incorporated by reference herein regarding the
total proved reserves of the Company was prepared by the Company and reviewed by
Ryder Scott Company Petroleum Engineers ("Ryder Scott"), as stated in their
letter reports with respect thereto, and is so included and so incorporated by
reference in reliance upon the authority of said firm as experts in such
matters. The information included and incorporated by reference herein regarding
the total estimated proved reserves acquired from Texaco was prepared by the
Company and reviewed by Ryder Scott, as stated in their letter reports with
respect thereto,
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<PAGE> 41
and is so included and so incorporated by reference in reliance upon the
authority of said firm as experts in such matters. The information included and
incorporated by reference herein regarding the total proved reserves of DEKALB
was prepared by DEKALB and for the four years ended December 31, 1994 was
reviewed by Ryder Scott, as stated in their letter reports with respect thereto,
and is so included and so incorporated by reference in reliance upon the
authority of said firm as experts in such matters. The reserve review letters of
Ryder Scott as of December 31, 1994, are filed as exhibits to the Registration
Statement of which this Prospectus is a part, in reliance upon the authority of
said firm as experts with respect to the matters covered by their reports and
the giving of their reports.
A portion of the information included herein regarding the total proved
reserves of Aquila acquired by the Company was prepared by Netherland, Sewell &
Associates, Inc. ("Netherland, Sewell") as of December 31, 1994, as stated in
their letter report with respect thereto. Netherland, Sewell has not reviewed
any of the reserves of Aquila acquired during 1995, including those set forth in
this Prospectus on a pro forma basis as of December 31, 1994. The reserve review
letter of Netherland, Sewell is filed as an exhibit to the Registration
Statement of which this Prospectus is a part in reliance upon the authority of
said firm as experts with respect to the matters covered by their report and the
giving of their report.
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<PAGE> 42
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses, other than underwriting discounts and commissions, in
connection with the issuance and distribution of the Debt Securities are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............................. $ 86,307
Blue Sky fees and expenses................................................ 15,000
Rating agency fees........................................................ 50,000
Legal fees and expenses................................................... 350,000
Accounting fees and expenses.............................................. 75,000
Trustee's fees and expenses............................................... 12,000
Printing and engraving.................................................... 100,000
Miscellaneous............................................................. 11,693
----------
Total........................................................... 700,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, inter alia, authorizes
a 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 (other than an action by or in the right of the corporation) because
such person is or was a director, officer, employee or agent of the corporation
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such suit or
proceeding 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 reason to believe his conduct was
unlawful. Similar indemnity is authorized for such persons against expenses
(including attorneys' fees) actually and reasonably incurred in defense or
settlement of any such pending, completed or threatened action or suit by or in
the right of the corporation if such person 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 provided further that (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Section 145 further authorizes a corporation 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 or 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 otherwise have the power to indemnify him. The Company maintains policies
insuring its and its subsidiaries' officers and directors against certain
liabilities for actions taken in such capacities, including liabilities under
the Securities Act of 1933, as amended.
Article VII of the Company's bylaws provides, in substance, that directors,
officers, employees and agents of the Company shall be indemnified to the extent
permitted by Section 145 of the Delaware General Corporation Law. Additionally,
Article Seventeen of the Company's Restated Certificate of Incorporation
eliminates in certain circumstances the monetary liability of directors of the
Company for a breach of their fiduciary duty as directors. These provisions do
not eliminate the liability of a director (i) for a breach of the director's
duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions by the director not in good faith; (iii) for acts or omissions by a
director involving intentional misconduct or a knowing violation of the law;
(iv) under Section 174 of the Delaware General Corporation Law (relating to the
declaration of
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<PAGE> 43
dividends and purchase or redemption of shares in violation of the Delaware
General Corporation Law); and (v) for transactions from which the director
derived an improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Company pursuant to the above provisions or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
against the Company by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
Reference is made to Section 8 of the form of Distribution Agreement filed
as Exhibit 1.1 hereto for a description of the indemnification arrangements the
Company is prepared to make in connection with the proposed offering of the
Remarketed Notes registered hereby.
Reference is made to Section 9 of the form of Remarketing Agreement filed
as Exhibit 99.1 hereto for a description of the indemnification arrangements the
Company is prepared to make in connection with the remarketing of the Remarketed
Notes registered hereby.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<S> <C>
1.1 -- Form of Distribution Agreement (Remarketed Notes).
4.1 -- Form of indenture between the Company and Chemical Bank, Trustee,
governing the Debt Securities.
4.2 -- Form of Note (Remarketed Notes).(1)
5.1 -- Opinion of legal counsel regarding legality of securities being
registered.
8.1 -- Opinion of Woodard, Hall & Primm, P.C. as to certain United States
federal income tax matters.
12.1 -- Statement of computation of ratio of earnings to fixed charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Coopers & Lybrand, Chartered Accountants.
23.3 -- Consent of Ryder Scott Company Petroleum Engineers.
23.4 -- Consent of Netherland, Sewell & Associates, Inc.
23.5 -- Consent of legal counsel (included in Exhibit 5.1).
23.6 -- Consent of Woodard, Hall & Primm, P.C. (included in Exhibit 8.1).
24.1 -- Power of Attorney (included in Part II as a part of the signature
pages of the Registration Statement).
25.1 -- Statement of Eligibility and Qualification under Trust Indenture Act
of 1939 of Chemical Bank, Trustee, is filed separately on Form T-1.
99.1 -- Form of Remarketing Agreement (Remarketed Notes).
99.2 -- Third Amended and Restated Credit Agreement, dated March 1, 1995,
among Registrant, the lenders named therein, and The First National
Bank of Chicago, as Administrative Agent and Arranger, and Chemical
Bank, as Co-Agent and Arranger (incorporated by reference to Exhibit
10.2 to Registrant's Annual Report on Form 10-K for year ended
December 31, 1994, SEC File No. 1-4300).
</TABLE>
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<PAGE> 44
<TABLE>
<S> <C>
99.3 -- First Amendment to Third Amended and Restated Credit Agreement dated
as of April 14, 1995, among Registrant, the lenders named therein,
and the First National Bank of Chicago, as Administrative Agent and
Arranger, and Chemical Bank, as Co-Agent and Arranger.
99.4 -- Second Amendment to Third Amended and Restated Credit Facility dated
as of October 23, 1995, among Registrant, the lenders named therein,
and The First National Bank of Chicago, as Administrative Agent and
Arranger, and Chemical Bank, as Co-Agent and Arranger.
</TABLE>
- ---------------
(1) To be filed by amendment.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in this registration statement relating
to the securities offered therein, shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act of 1933 shall be
deemed to be part of this registration statement as of the time it was
declared effective.
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<PAGE> 45
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions of Article 15, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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<PAGE> 46
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Houston, State of Texas.
APACHE CORPORATION
<TABLE>
<S> <C>
Date: November 2, 1995 By: /s/ RAYMOND PLANK
---------------------------
Raymond Plank
Chairman and
Chief Executive Officer
</TABLE>
POWER OF ATTORNEY
The undersigned directors and officers of Apache Corporation do hereby
constitute and appoint Raymond Plank, G. Steven Farris, Z. S. Kobiashvili and
Clyde E. McKenzie, and each of them, with full power of substitution, our true
and lawful attorneys-in-fact to sign and execute, on behalf of the undersigned,
any and all amendments (including post-effective amendments) to this
Registration Statement; and each of the undersigned does hereby ratify and
confirm all that said attorneys-in-fact shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. (Apache Corporation does not have a
Principal Financial Officer.)
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ RAYMOND PLANK Chairman and Chief Executive November 2, 1995
- -------------------------------------------- Officer (Principal Executive
Raymond Plank Officer)
/s/ MARK A. JACKSON Vice President, Finance November 2, 1995
- --------------------------------------------
Mark A. Jackson
/s/ R. KENT SAMUEL Controller and Chief November 2, 1995
- -------------------------------------------- Accounting Officer
R. Kent Samuel (Principal Accounting
Officer)
/s/ FREDERICK M. BOHEN Director November 2, 1995
- --------------------------------------------
Frederick M. Bohen
/s/ VIRGIL B. DAY Director November 2, 1995
- --------------------------------------------
Virgil B. Day
/s/ G. STEVEN FARRIS Director November 2, 1995
- --------------------------------------------
G. Steven Farris
/s/ RANDOLPH M. FERLIC Director November 2, 1995
- --------------------------------------------
Randolph M. Ferlic
/s/ EUGENE C. FIEDOREK Director November 2, 1995
- --------------------------------------------
Eugene C. Fiedorek
</TABLE>
II-5
<PAGE> 47
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ W. BROOKS FIELDS Director November 2, 1995
- --------------------------------------------
W. Brooks Fields
/s/ ROBERT V. GISSELBECK Director November 2, 1995
- --------------------------------------------
Robert V. Gisselbeck
/s/ STANLEY K. HATHAWAY Director November 2, 1995
- --------------------------------------------
Stanley K. Hathaway
/s/ JOHN A. KOCUR Director November 2, 1995
- --------------------------------------------
John A. Kocur
/s/ JOSEPH A. RICE Director November 2, 1995
- --------------------------------------------
Joseph A. Rice
</TABLE>
II-6
<PAGE> 48
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ---------- ----------- ------------
<S> <C> <C>
1.1 -- Form of Distribution Agreement (Remarketed Notes).
4.1 -- Form of indenture between the Company and Chemical Bank, Trustee,
governing the Debt Securities.
4.2 -- Form of Note (Remarketed Notes).(1)
5.1 -- Opinion of legal counsel regarding legality of securities being
registered.
8.1 -- Opinion of Woodard, Hall & Primm, P.C. as to certain United States
federal income tax matters.
12.1 -- Statement of computation of ratio of earnings to fixed charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Coopers & Lybrand, Chartered Accountants.
23.3 -- Consent of Ryder Scott Company Petroleum Engineers.
23.4 -- Consent of Netherland, Sewell & Associates, Inc.
23.5 -- Consent of legal counsel (included in Exhibit 5.1).
23.6 -- Consent of Woodard, Hall & Primm, P.C. (included in Exhibit 8.1).
24.1 -- Power of Attorney (included in Part II as a part of the signature
pages of the Registration Statement).
25.1 -- Statement of Eligibility and Qualification under Trust Indenture Act
of 1939 of Chemical Bank, Trustee, is filed separately on Form T-1.
99.1 -- Form of Remarketing Agreement (Remarketed Notes).
99.2 -- Third Amended and Restated Credit Agreement, dated March 1, 1995,
among Registrant, the lenders named therein, and The First National
Bank of Chicago, as Administrative Agent and Arranger, and Chemical
Bank, as Co-Agent and Arranger (incorporated by reference to Exhibit
10.2 to Registrant's Annual Report on Form 10-K for year ended
December 31, 1994, SEC File No. 1-4300).
99.3 -- First Amendment to Third Amended and Restated Credit Agreement dated
as of April 14, 1995, among Registrant, the lenders named therein,
and the First National Bank of Chicago, as Administrative Agent and
Arranger, and Chemical Bank, as Co-Agent and Arranger.
99.4 -- Second Amendment to Third Amended and Restated Credit Facility dated
as of October 23, 1995, among Registrant, the lenders named therein,
and The First National Bank of Chicago, as Administrative Agent and
Arranger, and Chemical Bank, as Co-Agent and Arranger.
</TABLE>
- ---------------
(1) To be filed by amendment.
<PAGE> 1
EXHIBIT 1.1
APACHE CORPORATION
REMARKETED NOTES
DISTRIBUTION AGREEMENT
______ __, 1995
FIRST CHICAGO CAPITAL MARKETS, INC.
1 First National Plaza
Suite 0826
Chicago, Illinois 60670
LEHMAN BROTHERS INC.
3 World Financial Center, 12th Floor
New York, NY 10285-1200
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, NY 10260
Dear Sirs:
Apache Corporation, a Delaware corporation (the "Company"), confirms
its agreement with First Chicago Capital Markets, Inc., Lehman Brothers Inc.
and J.P. Morgan Securities Inc. (each, an "Agent", and collectively, the
"Agents") with respect to the issue and sale by the Company of its Remarketed
Notes in one or more series (the "Notes"). The Notes are to be issued pursuant
to an Indenture, dated as of _______, 1995, as amended, supplemented or
modified from time to time (the "Indenture"), between the Company and Chemical
Bank, as trustee (the "Trustee"). As of the date hereof, the Company has
authorized the issuance and sale of up to U.S. $250,000,000 aggregate initial
offering price of Notes to or through the Agents pursuant to the terms of this
Agreement.
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers
and for the sale of Notes by the Company directly to investors (as may from
time to time be agreed to by the Company and the applicable Agent), in which
case such Agent will act as an agent of the Company in soliciting purchases of
the Notes.
<PAGE> 2
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. 33-________) for the
registration of debt securities, including the Notes and a Special Mandatory
Purchase Right, under the Securities Act of 1933, as amended (the "1933 Act"),
and the offering thereof from time to time in accordance with Rule 415 of the
rules and regulations of the SEC under the 1933 Act (the "1933 Act
Regulations"). Such registration statement has been declared effective by the
SEC and the Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act"). Such registration statement (and any
further registration statements which may be filed by the Company for the
purpose of registering additional Notes and in connection with which this
Agreement is included or incorporated by reference as an exhibit) and the
prospectus constituting a part thereof, and any prospectus supplement and
pricing supplement relating to the Notes, including all documents incorporated
therein by reference, as from time to time amended or supplemented by the
filing of documents pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act") or the 1933 Act or otherwise, are referred to herein as the
"Registration Statement" and the "Prospectus," respectively, except that if any
revised prospectus shall be provided to the Agents by the Company for use in
connection with the offering of the Notes, whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of
the 1933 Act Regulations, the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Agents for such
use.
SECTION 1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated
herein and subject to the reservation by the Company to sell Notes directly on
its own behalf, the Company hereby agrees that Notes will be sold exclusively
by, through or to the Agents, except as described below. The Company agrees
that it will not appoint any other agent or agents to act on its behalf, or to
assist it, in the placement of the Notes unless the Company has entered into an
agreement or agreements (which may incorporate by reference certain provisions
hereof and which shall incorporate and be subject to the commission schedule
set forth in Schedule A hereto with respect to any Notes sold through such
agent or agents, acting as an agent) with such agent or agents and has notified
the Agents promptly upon entering into any such agreement. The Company may
select, from time to time, any one or more Agents appointed hereby to offer and
sell any Notes in accordance with the terms hereof.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the aggregate
initial offering price of Notes registered pursuant to the Registration
Statement. The Agents shall have no responsibility for maintaining records
with respect to the aggregate initial offering price of Notes sold, or of
otherwise
2
<PAGE> 3
monitoring the availability of Notes for sale, under the Registration
Statement.
(c) Purchases as Principal. The Agents shall not have any
obligation to purchase Notes from the Company as principal, except to the
extent that one or more Agents may agree subsequently from time to time to
purchase Notes as principal for resale to investors and other purchasers
determined by such Agent or Agents. Any such purchase of Notes by an Agent as
principal shall be made in accordance with Section 3(a) hereof.
(d) Solicitations as Agent. If agreed upon by an Agent and the
Company, such Agent, acting solely as agent for the Company and not as
principal, will solicit purchases of the Notes. Such Agent will communicate to
the Company, orally, each offer to purchase Notes solicited by it on an agency
basis, other than those offers rejected by such Agent. Such Agent shall have
the right, in its discretion reasonably exercised, to reject any proposed
purchase of Notes, as a whole or in part, and any such rejection shall not be
deemed a breach of its agreement contained herein. The Company may accept or
reject any proposed purchase of Notes, in whole or in part. Such Agent shall
make reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by it and accepted
by the Company. Such Agent shall not have any liability to the Company in the
event that any such purchase is not consummated for any reason. If the Company
shall default on its obligation to deliver Notes to a purchaser whose offer it
has accepted, the Company shall (i) hold such Agent harmless against any loss,
claim or damage arising from or as a result of such default by the Company and
(ii) pay to such Agent any commission to which it would otherwise be entitled
absent such default.
(e) Reliance. The Company and the Agents agree that any Notes
purchased by one or more Agents as principal shall be purchased, and any Notes
the placement of which an Agent arranges as agent shall be placed by such
Agent, in reliance on the representations, warranties, covenants and agreements
of the Company contained herein and on the terms and conditions and in the
manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the
date hereof, as of the date of each acceptance by the Company of an offer for
the purchase of Notes (whether to such Agent as principal or through such Agent
as agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to
the Agent as principal being hereafter referred to as a "Settlement Date"), and
(unless (i) the Agents shall have suspended solicitation of purchases of their
Notes in their capacity as agents pursuant to a request from the Company and
(ii) no Agent shall then hold Notes
3
<PAGE> 4
purchased as principal pursuant hereto) as of any time that the Registration
Statement or the Prospectus shall be amended or supplemented or there is filed
with the SEC any document incorporated by reference into the Prospectus (each
of the times referenced above being referred to herein as a "Representation
Date"), as follows:
(i) Due Incorporation and Qualification. The
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement; and
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in Texas and in each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify and be in good standing would
not have a material adverse effect on the condition, financial or
otherwise, or the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(ii) Subsidiaries. Each "significant subsidiary"
of the Company as defined in Rule 405 of Regulation C of the 1933 Act
Regulations (collectively, the "Significant Subsidiaries") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify and be in
good standing would not have a material adverse effect on the
condition, financial or otherwise, or the results of operations,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and, except as described in
the Prospectus, all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, except for directors' qualifying
shares (if applicable), is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. At
the time the Registration Statement became effective, the Registration
Statement complied, and as of each Representation Date will comply, in
all material respects with the requirements of
4
<PAGE> 5
the 1933 Act and the 1933 Act Regulations and the 1939 Act and the
rules and regulations of the SEC promulgated thereunder; the
Registration Statement, at the time it became effective, did not, and
at each time thereafter at which any amendment to the Registration
Statement becomes effective or any Annual Report on Form 10-K is filed
by the Company with the SEC and as of each Representation Date, will
not, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus, as of the date
hereof does not, and as of each Representation Date will not, include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Agents expressly
for use in the Registration Statement or Prospectus.
(iv) Incorporated Documents. The documents
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the SEC, complied or when so filed will
comply, as the case may be, in all material respects with the
requirements of the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations"), and, when read together and
with the other information in the Prospectus, did not and will not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were or are made, not misleading.
(v) Accountants. The accountants who certified
the financial statements included or incorporated by reference in the
Prospectus are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial
statements and any supporting schedules of the Company and its
subsidiaries included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Company and its subsidiaries as of the dates indicated
and the consolidated results of their operations for the periods
specified; except as stated therein, said financial statements have
been prepared in conformity with U.S. generally accepted accounting
principles applied on a consistent basis; and the supporting schedules
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information required to be stated
therein.
5
<PAGE> 6
(vii) Engineers. The petroleum engineers who have
consented to being named as having reviewed certain reserve data
included or incorporated by reference in the Prospectus are independent
engineers with respect to the Company and its subsidiaries.
(viii) Authorization and Validity of this Agreement,
the Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agents, will be a valid and legally binding agreement of the
Company; the Indenture has been duly authorized, executed and delivered
by the Company and, upon execution and delivery by the Trustee, will be
a valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights generally or
by general equity principles, and except further as enforcement thereof
may be limited by (1) requirements that a claim with respect to any
Notes denominated other than in U.S. dollars (or a foreign currency or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to limit,
delay or prohibit the making of payments outside the United States. The
Notes have been duly and validly authorized for issuance, offer and
sale pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor, the Notes will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and except
further as enforcement thereof may be limited by (1) requirements that
a claim with respect to any Notes denominated other than in U.S.
dollars (or a foreign currency or composite currency judgment in
respect of such claim) be converted into U.S. dollars at a rate or
exchange prevailing on a date determined pursuant to applicable law or
(2) governmental authority to limit, delay or prohibit the making of
payments outside the United States. The Notes and the Indenture will
be substantially in the form heretofore delivered to the Agents and
conform in all material respects to all statements relating thereto
contained in the Prospectus; and each Holder (as defined in the
Indenture) of Notes will be entitled to the benefits of the Indenture.
(ix) Authorization and Validity of the Remarketing
Agreement. The Remarketing Agreement (as defined in the Prospectus),
if applicable, has been duly and validly authorized, executed and
delivered by the Company and
6
<PAGE> 7
(assuming the Remarketing Agreement has been duly authorized, executed
and delivered by the applicable Remarketing Agent or Agents (as defined
in the Remarketing Agreement)) constitutes a legal, valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights generally, or
by general equity principles.
(x) Material Adverse Changes or Material
Transactions. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, (1) there has been
no material adverse change in the condition, financial or otherwise, or
in the results of operations, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business and (2) there have
been no material transactions entered into by the Company or any of its
subsidiaries other than those in the ordinary course of business.
(xi) No Defaults. Neither the Company nor any of
its subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or any of them or their properties may be bound, where
the consequences of such violation or default would have a material
adverse effect on the condition, financial or otherwise, or the results
of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and the execution
and delivery of this Agreement, the Remarketing Agreement, if
applicable, and the Indenture and the consummation of the transactions
contemplated herein and therein have been duly authorized by all
necessary corporate action of the Company and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound or to which any of the
property or assets of the Company or any such subsidiary is subject,
nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any law, administrative regulation
or administrative or court order or decree, where the consequences of
such conflict, breach, creation, imposition, violation or default would
have a material adverse
7
<PAGE> 8
effect on the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xii) Regulatory Approvals. No consent, approval,
authorization, order or decree of any court or governmental agency or
body is required for the consummation by the Company of the
transactions contemplated by this Agreement or in connection with the
sale of Notes hereunder, except such as have been obtained or rendered,
as the case may be, or as may be required under state securities laws
("Blue Sky").
(xiii) Legal Proceedings. Except as may be included
or incorporated by reference in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened against or affecting,
the Company or any of its subsidiaries, which might, in the opinion of
the Company, result in any material adverse change in the condition,
financial or otherwise, or in the results of operations, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, or could reasonably be expected to
materially and adversely affect the properties or assets thereof or
could reasonably be expected to materially and adversely affect the
consummation of this Agreement or the Indenture or any transaction
contemplated hereby or thereby.
(xiv) Contracts. There are no contracts or
documents of the Company or any of its subsidiaries which are required
to be filed as exhibits to the Registration Statement by the 1933 Act
or by the 1933 Act Regulations which have not been so filed.
(xv) Licenses. Neither the Company nor any of its
subsidiaries is in violation of any law, ordinance, governmental rule
or regulation or court decree to which it may be subject or has failed
to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure would materially
adversely affect the condition, financial or otherwise, or the results
of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and the Company and
its subsidiaries own or possess or have obtained all governmental
licenses, permits, consents, orders, approvals and other authorizations
and has properly filed with the appropriate authorities all notices,
applications and other documents necessary to lease or own their
respective properties and to carry on their respective businesses as
presently conducted, except where the failure to possess such
8
<PAGE> 9
licenses or authorizations or make such filings would not materially
adversely affect the condition, financial or otherwise, or the results
of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(xvi) Trademarks; Service Marks. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate trademarks, service marks and trade names necessary to conduct
the business now operated by them, except as set forth or incorporated
by reference in the Registration Statement or except where the failure
to own or possess would not materially adversely affect the condition,
financial or otherwise, or the results of operations, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights
of others with respect to any trademarks, service marks or trade names
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially adversely affect the
condition, financial or otherwise, or the results of operations,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xvii) Property. The Company and its subsidiaries
have legal, valid and defensible title to all of their interests in oil
and gas properties and to all other real and personal property owned by
them and any other real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting
and enforceable leases in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or
encumbrances and defects of any kind, except such as (a) are described
in the Prospectus, (b) liens and encumbrances under operating
agreements, unitization and pooling agreements, production sales
contracts, farm-out agreements and other oil and gas exploration and
productions agreements, in each case that secure payment of amounts not
yet due and payable for the performance of other inchoate obligations
and are of a scope and nature customary in connection with similar
drilling and producing operations or (c) those that do not have a
material adverse effect on the condition, financial or otherwise, the
results of operations, business affairs or business prospects of the
Company.
(xviii) Reserves. The information underlying the
estimates of oil and gas reserves as described in the Prospectus is
complete and accurate in all material respects (or, with regard to any
information underlying the estimates prepared by any petroleum
engineers retained by the seller of such oil and gas reserves, is, to
the best knowledge of the Company after reasonable investigation,
complete and accurate
9
<PAGE> 10
in all material respects); other than production of the reserves in
the ordinary course of business and intervening product price
fluctuations described in the Prospectus, the Company is not aware of
any facts or circumstances that would result in a material adverse
change in the reserves or the present value of future net cash
flows therefrom as described in the Prospectus. Estimates of such
reserves and present values comply in all material respects with the
applicable requirements of Regulation S-X and Industry Guide 2 under
the 1933 Act.
(xix) Investment Company Act. Neither the Company
nor any of its subsidiaries is required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Doing Business with Cuba. The Company has
complied and will comply with the provisions of Florida H.B. 1771,
codified as Section 517.075 of the Florida Statutes, 1987, as amended,
and all regulations promulgated thereunder relating to issuers doing
business in Cuba.
(xxi) Environmental Compliance. Except as
described in the Registration Statement, (A) neither the Company nor
any of its subsidiaries is in violation of any local or foreign laws or
regulations relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), except such violations as would not, singly or in the
aggregate, have a material adverse effect on the condition, financial
or otherwise, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, and (B) to the best of the Company's knowledge, there
are no events or circumstances that could reasonably be expected to be
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
any Hazardous Materials or the violation of any Environmental Laws,
which, singly or in the aggregate, could reasonably be expected to have
a material adverse effect on the condition, financial or otherwise, or
the results of operations, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise.
10
<PAGE> 11
(b) Additional Certifications. Any certificate signed by any
director or officer of the Company and delivered to one or more Agents or to
counsel for the Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent or Agents as to the
matters covered thereby.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by an Agent
and the Company, Notes shall be purchased by one or more Agents as principal,
severally and not jointly, in accordance with terms agreed upon by such Agent
or Agents and the Company (which terms, unless otherwise agreed, shall, to the
extent applicable, include those terms specified in Exhibit A hereto and be
agreed upon orally, with written confirmation prepared by such Agent or Agents
and mailed to the Company). An Agent's commitment to purchase Notes as
principal shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the
terms and conditions herein set forth. Unless the context otherwise requires,
references herein to "this Agreement" shall include the agreement of one or
more Agents to purchase Notes from the Company as principal. Each purchase of
Notes, unless otherwise agreed, shall be at a discount from the principal
amount of each such Note equivalent to the applicable commission set forth in
Schedule A hereto. The Agents may engage the services of any other broker or
dealer in connection with the resale of the Notes purchased by them as
principal and may allow all or any portion of the discount received in
connection with such purchases from the Company to such brokers and dealers.
At the time of each purchase of Notes by one or more Agents as principal, such
Agent or Agents shall specify the requirements for the stand-off agreement,
officers' certificate, opinions of counsel and comfort letter pursuant to
Sections 4(k), 7(b), 7(c) and 7(d) hereof.
(b) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions herein
set forth, when agreed by the Company and an Agent, such Agent, as an agent of
the Company, will use its reasonable efforts to solicit offers to purchase the
Notes upon the terms and conditions set forth in the Prospectus. The Agents
are not authorized to appoint sub-agents with respect to Notes sold through
them as agent. All Notes sold through an Agent as agent will be sold at 100%
of their principal amount unless otherwise agreed to by the Company and such
Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing
at any time for any period of time or permanently. As soon as practicable
after receipt of instructions from the Company, such Agent will suspend
solicitation of purchases from
11
<PAGE> 12
the Company until such time as the Company has advised such Agent that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as
set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate
or formula, maturity date and other terms of the Notes (as applicable)
specified in Exhibit A hereto shall be agreed upon by the Company and the
applicable Agent or Agents and specified in a pricing supplement to the
Prospectus (each, a "Pricing Supplement") to be prepared in connection with
each sale of Notes. Except as may be otherwise specified in the applicable
Pricing Supplement, the Notes will be issued in denominations of U.S. $100,000
or any larger amount that is an integral multiple of U.S. $1,000.
Administrative procedures with respect to the sale of Notes shall be agreed
upon from time to time by the Company, the Agents and the Trustee (the
"Procedures"). The Agents and the Company agree to perform, and the Company
agrees to cause the Trustee to agree to perform, their respective duties and
obligations specifically provided to be performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of
any amendment to the Registration Statement, (ii) the transmittal to the SEC
for filing of any amendment or supplement to the Prospectus or any document to
be filed pursuant to the 1934 Act (other than any amendment, supplement or
document relating solely to securities other than the Notes), (iii) the receipt
of any comments from the SEC with respect to the Registration Statement or the
Prospectus, (iv) any request by the SEC for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, (v) the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose and (vi) any change in the rating assigned by any
nationally recognized statistical rating organization to any debt securities of
the Company or the public announcement by any nationally recognized statistical
rating organization that it has under surveillance or review, with possible
negative implications, its rating of any debt securities of the Company. The
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will give the
Agents advance notice of its intention to file or prepare
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any additional registration statement with respect to the registration of
additional Notes, any amendment to the Registration Statement or any amendment
or supplement to the Prospectus (other than an amendment or supplement
providing solely for a change in the interest rate or formula applicable to the
Notes or relating solely to the issuance and/or offering of securities other
than the Notes), whether by the filing of documents pursuant to the 1934 Act or
the 1933 Act or otherwise, and (subject to subsection (1) of this Section) will
furnish to the Agents copies of any such amendment or supplement or other
documents proposed to be filed or used a reasonable time in advance of such
proposed filing or use, as the case may be, and will not file any such
amendment or supplement or other documents in a form to which the Agents or
counsel for the Agents shall reasonably object.
(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to each Agent one signed copy of the Registration
Statement (as originally filed) and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated by reference in the Prospectus) and will also deliver to the
Agents as many conformed copies of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) as the Agents reasonably
request. The Company will furnish to the Agents as many copies of the
Prospectus (as amended or supplemented) as the Agents reasonably request so
long as the Agents are required to deliver a Prospectus in connection with
sales or solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare,
with respect to any Notes to be sold to or through one or more Agents pursuant
to this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents and will file such Pricing Supplement
pursuant to Rule 424(b)(3) under the 1933 Act not later than the close of
business of the SEC on the fifth business day after the date on which such
Pricing Supplement is first used.
(e) Revisions of Prospectus -- Material Changes. Except as
otherwise provided in subsection (1) of this Section, if at any time during the
term of this Agreement any event shall occur or condition exist as a result of
which it is necessary, in the opinion of counsel for the Agents or counsel for
the Company, to amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, or if it shall be necessary, in the opinion of either
such counsel, to amend or supplement the Registration Statement or the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company shall give immediate notice, confirmed in writing,
to the Agents to cease the solicitation of offers to
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purchase the Notes in their capacity as agents and to cease sales of any Notes
they may then own as principal, and the Company will promptly amend the
Registration Statement and the Prospectus, whether by filing documents pursuant
to the 1934 Act or the 1933 Act or otherwise, as may be necessary to correct
such untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information.
Except as otherwise provided in subsection (1) of this Section, on or prior to
the date on which there shall be released to the general public interim
financial statement information related to the Company with respect to each of
the first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include or incorporate by reference financial
information with respect thereto and corresponding information for the
comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding thereof
or as shall be required by the 1933 Act or the 1933 Act Regulations.
(g) Prospectus Revisions -- Audited Financial Information. Except
as otherwise provided in subsection (1) of this Section, on or prior to the
date on which there shall be released to the general public financial
information included in or derived from the audited financial statements of the
Company for the preceding fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the
Registration Statement and the Prospectus to be amended, whether by the filing
of documents pursuant to the 1934 Act or the 1933 Act or otherwise, to include
or incorporate by reference such audited financial statements and the report or
reports, and consent or consents to such inclusion or incorporation by
reference, of the independent accountants with respect thereto, as well as such
other information and explanations as shall be necessary for an understanding
of such financial statements or as shall be required by the 1933 Act or the
1933 Act Regulations.
(h) Earnings Statements. The Company will make generally
available to its security holders as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering each twelve month period beginning, in each case, not later than the
first day of the Company's fiscal quarter next following the "effective date"
(as defined in such Rule 158) of the Registration Statement with respect to
each sale of Notes.
(i) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other
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jurisdictions of the United States as the Agents may designate, and will
maintain such qualifications in effect for as long as may be required for the
distribution of the Notes; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified. The
Company will file such statements and reports as may be required by the laws of
each jurisdiction in which the Notes have been qualified as above provided.
The Company will promptly advise the Agents of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Notes for sale in any such state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act in
connection with sales of the Notes, will file all documents required to be
filed with the SEC pursuant to Sections 13, 14 or 15(d) of the 1934 Act within
the time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) Stand-Off Agreement. If specified by the applicable Agent or
Agents in connection with a purchase of Notes from the Company as principal,
between the date of the agreement to purchase such Notes and the Settlement
Date with respect to such purchase, the Company will not, without the prior
written consent of such Agent or Agents, offer or sell, grant any option for
the sale of, or enter into any agreement to sell, any debt securities of the
Company substantially similar to the Notes (other than the Notes that are to be
sold pursuant to such agreement or commercial paper in the ordinary course of
business).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (e), (f) or (g) of this
Section, or subsection (b) of this Section insofar as it relates to documents
filed pursuant to the 1934 Act, during any period from the time (i) the Agents
shall have suspended solicitation of purchases of the Notes in their capacity
as agents pursuant to a request from the Company and (ii) no Agent shall then
hold any Notes purchased as principal pursuant hereto, until such time as the
Company shall determine that solicitation of purchases of the Notes should be
resumed or an Agent shall subsequently purchase Notes from the Company as
principal.
SECTION 5. Conditions of Obligations.
The obligations of the Agents to purchase Notes from the Company as
principal and to solicit offers to purchase Notes as agent of the Company, and
the obligations of any purchasers of Notes sold through an Agent as agent, will
be subject to the accuracy of the representations and warranties on the part of
the Company herein and to the accuracy of the statements of the Company's
officers made in any certificate furnished pursuant to
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<PAGE> 16
the provisions hereof, to the performance and observance by the Company of all
its covenants and agreements herein contained and to the following additional
conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents:
(1) Opinion of Company Counsel. The favorable opinion of
Woodard, Hall & Primm, P.C., counsel to the Company, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) This Agreement has been duly authorized, executed
and delivered by the Company.
(iii) The Indenture has been duly authorized, executed
and delivered by the Company and (assuming the Indenture has
been duly authorized, executed and delivered by the Trustee)
constitutes a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by
general equity principles, and further as enforcement thereof
may be limited by (1) requirements that a claim with respect
to any Notes denominated other than in U.S. dollars (or a
foreign currency or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States.
(iv) The Remarketing Agreement, if applicable, has been
duly and validly authorized, executed and delivered by the
Company and (assuming the Remarketing Agreement has been duly
authorized, executed and delivered by the applicable
Remarketing Agent or Agents (as defined in such Remarketing
Agreement)) constitutes a legal, valid and binding agreement
of the Company, enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally, or by general equity principles.
(v) The Notes, in the form(s) certified by the Company
as of the date hereof, have been duly authorized
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<PAGE> 17
for issuance, offer and sale pursuant to this Agreement and,
when issued, authenticated and delivered pursuant to the
provisions of this Agreement and the Indenture against payment
of the consideration therefor, will constitute valid and
legally binding obligations of the Company, enforceable in
accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement
of creditors' rights generally or by general equity
principles, and except further as enforcement thereof may be
limited by (1) requirements that a claim with respect to any
Notes denominated other than in U.S. dollars (or a foreign
currency or composite currency judgment in respect of such
claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or
(2) governmental authority to limit, delay or prohibit the
making of payments outside the United States; and each holder
of Notes will be entitled to the benefits of the Indenture.
(vi) The Notes and the Indenture conform in all
material respects to the statements relating thereto in the
Prospectus; and the statements in the Prospectus under the
captions "Description of Notes" and "Description of Debt
Securities", insofar as they purport to summarize certain
provisions of documents specifically referred to therein, are
accurate summaries of such provisions.
(vii) The Indenture has been duly qualified under the
1939 Act.
(viii) The Registration Statement has been declared
effective by the SEC under the 1933 Act and, to the best of
such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
under the 1933 Act or proceedings therefor initiated or
threatened by the SEC.
(ix) The Registration Statement and the Prospectus
(except for financial statements and engineering reports and
other financial or engineering data, and except for those
parts of the Registration Statement that constitute the Form
T-1, as to the requirements of Form T-1, as to which such
counsel need not express any opinion), as of their respective
effective or issue dates, appeared on their face to be
appropriately responsive to the requirements of the 1933 Act
and the 1933 Act Regulations.
(x) The information contained in the Prospectus under
the captions "Certain United States Federal Income Tax
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<PAGE> 18
Considerations", to the extent that such information
constitutes matters of law, summaries of legal matters or
legal conclusions, has been reviewed by such counsel and is
correct.
In rendering such opinion, counsel for the Company may rely as
to matters of fact upon the representations of officers of the Company
contained in any certificate delivered to such counsel and certificates
of public officials, which certificates shall be attached to or
delivered with such opinion. Such opinion shall be limited to the
General Corporation Law of the State of Delaware, the laws of the State
of Texas and the laws of the United States of America.
(2) The favorable opinion of Zurab S. Kobiashvili, General
Counsel of the Company, to the effect that:
(i) The Company has the corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under this Agreement.
(ii) To the best knowledge and information of such
counsel, the Company is duly qualified as a foreign
corporation to transact business and is in good standing in
Texas and in each other jurisdiction in which such
qualification is required, except where the failure to so
qualify and be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or
the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(iii) Each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and conduct its business as
described in the Prospectus, and, to the best of such
counsel's knowledge and information, is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify and be in
good standing would not have a material adverse effect on the
condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and
all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable, and is owned by the
Company, directly or indirectly, free and clear of any
mortgage,
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pledge, lien, encumbrance, claim or equity (except as
described in the Prospectus).
(iv) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus (except for
financial statements, supporting schedules and other
financial or statistical information as to which no opinion
need be rendered) appeared on their face to be appropriately
responsive when so filed to the requirements of the 1934 Act
and the 1934 Act Regulations.
(v) Neither the Company nor any of its subsidiaries is
required to be registered under the 1940 Act.
(vi) No consent, approval, authorization, order or
decree of any court or governmental authority or agency is
required that has not been obtained in connection with the
consummation by the Company of the transactions contemplated
by this Agreement or the Indenture, except such as have been
obtained or rendered, as the case may be, or as may be
required under the 1933 Act, the 1933 Act Regulations, the
1934 Act, the 1934 Act Regulations or state securities laws;
and the execution and delivery of this Agreement, the
Remarketing Agreement, if applicable, and the Indenture and
the consummation of the transactions contemplated herein and
therein have been duly authorized by all necessary corporate
action of the Company and, to the best knowledge and
information of such counsel, will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it
or any of them may be bound or to which any of the property or
assets of the Company or any such subsidiary is subject, nor
will such action result in any violation of the provisions of
the charter or by-laws of the Company or any applicable law,
administrative regulation or, to the best knowledge and
information of such counsel, administrative or court order or
decree.
(vii) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws.
(viii) To the best knowledge and information of such
counsel, neither the Company nor any of its subsidiaries is
in violation of any law, ordinance, governmental rule or
regulation or court decree to which it may be subject or has
failed to obtain any license, permit, franchise or other
governmental authorization necessary to the
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ownership of its property or to the conduct of its business,
which violation or failure would materially adversely affect
the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise;
and, to the best knowledge and information of such counsel,
the Company and its subsidiaries own or possess or have
obtained all material governmental licenses, permits,
consents, orders, approvals and other authorizations necessary
to lease or own their respective properties and to carry on
their respective businesses as presently conducted, except
where the failure to obtain such licenses or consents would
not have a material adverse effect on the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(ix) To the best of such counsel's knowledge and
information, there is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or
foreign, now pending, or threatened against or affecting, the
Company or any of its subsidiaries, which would be reasonably
expected to result in any material adverse change in the
condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, or
would materially and adversely affect the properties or assets
thereof or would materially and adversely affect the
consummation of this Agreement or the Indenture or any
transaction contemplated hereby or thereby.
(x) To the best of such counsel's knowledge and
information, there are no contracts or other documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or
references thereto are correct in all material respects, and,
to the best of such counsel's knowledge and information, no
default exists in the due performance or observance of any
material obligation, agreement, covenant or conditions
contained in any contract, or other documents so described,
referred to, filed or incorporated by reference where the
consequences of such default would have a material adverse
effect on the condition, financial or otherwise, or the
results of operation, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise.
In rendering such opinion, Zurab S. Kobiashvili may rely as to
matters of fact upon the representations of officers of the Company contained
in any certificate delivered to such counsel and certificates of public
officials, which certificates shall be attached to or delivered with such
opinion. Such opinion shall be limited to the General Corporation Law of the
State of Delaware,
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the laws of the State of Texas and the laws of the United States of America.
(3) Opinion of Counsel to the Agents. The favorable
opinion of Brown & Wood, counsel to the Agents, covering the matters
referred to in subsection (a)(1) under the subheadings (i) to (ix),
inclusive, above.
(4) Disclosure Documents. In giving their opinions
required by subsection (a)(1), (a)(2) and (a)(3), respectively, of this
Section 5, Woodard, Hall & Primm, P.C., Zurab S. Kobiashvili and Brown
& Wood shall each additionally state that in the course of the
preparation of the Registration Statement and the Prospectus such
counsel has considered the information set forth therein in light of
the matters required to be set forth therein, and has participated in
conferences with officers and representatives of the Company including
its independent public accountants, during the course of which the
contents of the Registration Statement and Prospectus and related
matters were discussed. Such counsel need not independently check the
accuracy or completeness of, or otherwise verify, and accordingly need
not pass upon, and accordingly need not assume responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and such counsel may, in good
faith, rely as materiality upon the judgment of officers and
representatives of the Company. Such counsel shall additionally state
that, however, as a result of such consideration and participation,
nothing has come to such counsel's attention which causes such counsel
to believe that the Registration Statement, at the time it became
effective (or, if an amendment to the Registration Statement or an
Annual Report on Form 10-K has been filed by the Company with the SEC
subsequent to the effectiveness of the Registration Statement, then at
the time such amendment became effective or at the time of the most
recent such filing, as the case may be) or at the date hereof,
contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading or
that the Prospectus, at the date hereof (or, if such opinion is being
delivered in connection with the purchase of Notes from the Company by
one or more Agents as principal pursuant to Section 7(c) hereof, at the
date of any agreement by such Agent or Agents to purchase Notes as
principal and at the Settlement Date with respect thereto, as the case
may be) (included or) includes an untrue statement of a material fact
or (omitted or) omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need express no opinion with respect to the financial
statements and engineering reports and other financial or engineering
data contained in
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the Registration Statement (including the Prospectus) or those parts
of the Registration Statement which constitute the Form T-1).
(b) Officers' Certificate. At the date hereof, the Agents shall
have received a certificate of the Chief Executive Officer, President or Vice
President and the Treasurer, the Assistant Treasurer, the principal financial
officer or principal accounting officer of the Company, dated as of the date
hereof, to the effect that (i) since the respective dates as of which
information is given in the Prospectus or since the date of any agreement by
one or more Agents to purchase Notes from the Company as principal, there has
not been any material adverse change in the condition, financial or otherwise,
or in the results of operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) the representations and
warranties of the Company contained in Section 2 hereof are true and correct
with the same force and effect as though expressly made at and as of the date
of such certificate and (iii) the Company has performed or complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the date of such certificate. As used in this Section
5(b), the term "Prospectus" means the Prospectus in the form first provided to
the applicable Agent or Agents for use in confirming sales of the Notes.
(c) Comfort Letter of Arthur Andersen, LLP. On the date hereof,
the Agents shall have received a letter from Arthur Andersen, LLP, dated as of
the date hereof and in form and substance satisfactory to the Agents, to the
effect that:
(i) They are independent accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations.
(ii) It is their opinion that the consolidated financial
statements and supporting schedule(s) and included or incorporated by
reference in the Registration Statement and the Prospectus and audited
by them and covered by their opinions therein comply in form in all
material respects with the applicable accounting requirements of the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations.
(iii) They have performed specified procedures, not
constituting an audit, including a reading of the latest available
interim financial statements of the Company and its indicated
subsidiaries, a reading of the minute books of the Company and such
subsidiaries since the end of the most recent fiscal year with respect
to which an audit report has been issued, inquiries of and discussions
with certain officials of
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the Company and such subsidiaries responsible for financial and
accounting matters with respect to the unaudited consolidated financial
statements included or incorporated by reference in the Registration
Statement and Prospectus and the latest available interim unaudited
financial statements of the Company and its subsidiaries, and such
other inquiries and procedures as may be specified in such letter, and
on the basis of such inquiries and procedures, nothing came to their
attention that caused them to believe that: (A) any material
modifications should be made to the unaudited consolidated financial
statements of the Company and its subsidiaries included or incorporated
by reference in the Registration Statement and Prospectus for them to
be in conformity with generally accepted accounting principles in the
United States, (B) the unaudited consolidated financial statements of
the Company and its subsidiaries included or incorporated by reference
in the Registration Statement and Prospectus do not comply as to form
in all material respects with the applicable accounting requirements of
the 1934 Act and the 1934 Act Regulations or (C) at a specified date
not more than three days prior to the date of such letter, there was
any change in the consolidated capital stock, any increase in
consolidated long-term debt or any decrease in the consolidated net
current assets or consolidated net assets of the Company and its
subsidiaries, in each case as compared with the amounts shown on the
most recent consolidated balance sheet of the Company and its
subsidiaries included or incorporated by reference in the Registration
Statement and Prospectus or, during the period from the date of such
balance sheet to a specified date not more than three days prior to the
date of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenues or
in the total or per-share amounts of income before extraordinary items
or of net income of the Company and its subsidiaries, except in all
instances for changes, increases or decreases that the Registration
Statement and Prospectus disclose have occurred or may occur or except
for such exceptions enumerated in such letter as shall have been agreed
to by the Agents and the Company.
(iv) They have performed specified procedures, not
constituting an audit, set forth in their letter, based upon which
nothing came to their attention that caused them to believe that the
unaudited pro forma consolidated condensed financial statements, if
any, included or incorporated by reference in the Registration
Statement or the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements.
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(v) In addition to the audit referred to in their opinions
and the limited procedures referred to in clauses (iii) and (iv) above,
they have carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial
information which are included or incorporated by reference in the
Registration Statement and the Prospectus and which are specified by
the Agents, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting,
financial and other records of the Company and its subsidiaries
identified in such letter.
(d) Other Documents. On the date hereof and on each Settlement
Date, counsel to the Agents shall have been furnished with such documents and
opinions as such counsel may reasonably require for the purpose of enabling
such counsel to pass upon the issuance and sale of Notes as herein contemplated
and related proceedings, or in order to evidence the accuracy and completeness
of any of the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of Notes as herein contemplated shall be
satisfactory in form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the applicable Agent or Agents by notice to the Company at any
time and any such termination shall be without liability of any party to any
other party, except that the covenant regarding provision of an earnings
statement set forth in Section 4(h) hereof, the provisions concerning payment
of expenses under Section 10 hereof, the indemnity and contribution agreement
set forth in Sections 8 and 9 hereof, the provisions concerning the
representations, warranties and agreements to survive delivery of Section 11
hereof, the provisions relating to governing law and forum set forth in Section
14 and the provisions relating to parties set forth in Section 15 hereof shall
remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through an Agent.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, such Agent shall promptly notify the Company and deliver
such Note to the Company and, if such Agent has theretofore paid the Company
for such Note, the Company will promptly return such funds to such Agent. If
such failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such Agent
on an equitable basis for its
24
<PAGE> 25
loss of the use of the funds for the period such funds were credited to the
Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties. Each
acceptance by the Company of an offer for the purchase of Notes (whether to one
or more Agents as principal or through an Agent as agent), and each delivery of
Notes (whether to one or more Agents as principal or through an Agent as
agent), shall be deemed to be an affirmation that the representations and
warranties of the Company contained in this Agreement and in any certificate
theretofore delivered to the Agents pursuant hereto are true and correct at the
time of such acceptance or sale, as the case may be, and an undertaking that
such representations and warranties will be true and correct at the time of
delivery to such Agent or Agents or to the purchaser or its agent, as the case
may be, of the Note or Notes relating to such acceptance or sale, as the case
may be, as though made at and as of each such time (and it is understood that
such representations and warranties shall relate to the Registration Statement
and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rate or formula applicable to the Notes or relating solely to the
issuance and/or offering of securities other than the Notes), (ii) there is
filed with the SEC any document incorporated by reference into the Prospectus
(other than any Current Report on Form 8-K relating solely to the issuance
and/or offering of securities other than the Notes, unless the Agents shall
otherwise specify), (iii) (if required in connection with the purchase of Notes
from the Company by one or more Agents as principal) the Company sells Notes to
such Agent or Agents as principal, (iv) the Company sells Notes in a form not
previously certified to the Agents by the Company, the Company shall furnish or
cause to be furnished to the Agent(s), forthwith a certificate dated the date
of filing with the SEC of such supplement or document or (v) the Agents resume
solicitation of purchases of the Notes in their capacity as Agents at the
request of the Company following any suspension thereof, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form satisfactory to the Agent(s) to the effect that the statements
contained in the certificate referred to in Section 5(b) hereof which were last
furnished to the Agents are true and correct at the time of such amendment,
supplement, filing or sale, as the case may be, as though made at and as of
such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
25
<PAGE> 26
certificate referred to in Section 5(b) hereof, modified as necessary to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rate or formula applicable to the Notes, providing solely for the
inclusion of additional financial information, or, unless the Agents shall
otherwise specify, relating solely to the issuance and/or offering of
securities other than the Notes), (ii) there is filed with the SEC any document
incorporated by reference into the Prospectus (other than any Current Report on
Form 8-K relating solely to the issuance and/or offering of securities other
than the Notes, unless the Agents shall otherwise specify), (iii) (if required
in connection with the purchase of Notes from the Company by one or more Agents
as principal) the Company sells Notes to such Agent or Agents as principal,
(iv) the Company sells Notes in a form not previously certified to the Agents
by the Company or (v) the Agents resume solicitation of purchases of the Notes
in their capacity as Agents at the request of the Company following any
suspension thereof, the Company shall furnish or cause to be furnished
forthwith to the Agent(s) and to counsel to the Agents the written opinion of
Woodard, Hall & Primm, P.C., counsel to the Company and Zurab S. Kobiashvili or
other counsel satisfactory to the Agent(s), dated the date of filing with the
SEC of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form and substance
satisfactory to the Agent(s), of the same tenor as the opinions referred to in
Section 5(a)(1) and (2) respectively hereof, but modified, as necessary, to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion or, in lieu of such
opinion, counsel last furnishing such opinion to the Agents shall furnish the
Agent(s) with a letter substantially to the effect that the Agent(s) may rely
on such last opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such last opinion shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i)
the Registration Statement or the Prospectus shall be amended or supplemented
to include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes), (ii) there is filed with the SEC any document incorporated by
reference into the Prospectus which contains additional financial information,
(iii) (if required in connection with the purchase of Notes from the Company by
one or more Agents as principal) the Company sells Notes to such Agent or
Agents as principal, or (iv) the Agents resume
26
<PAGE> 27
solicitation of purchases of the Notes in their capacity as Agents at the
request of the Company following any suspension thereof, the Company shall
cause Arthur Anderson, LLP forthwith to furnish to the Agent(s) a letter, dated
the date of effectiveness of such amendment, supplement or document with the
SEC, or the date of such sale, as the case may be, in form satisfactory to the
Agent(s), of the same tenor as the portions of the letter referred to in
clauses (i) and (ii) of Section 5(c) hereof but modified to relate to the
Registration Statement and Prospectus as amended and supplemented to the date
of such letter, and of the same general tenor as the portions of the letter
referred to in clauses (iii) and (iv) of said Section 5(c) with such changes as
may be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company and its
subsidiaries.
(e) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsection (b), (c) or (d) of this
Section during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Notes in their capacity as agents pursuant to
a request from the Company and (ii) no Agent shall then hold any Notes
purchased as principal pursuant hereto, until such time as the Company shall
determine that solicitation of purchases of the Notes should be resumed or an
Agent shall subsequently purchase Notes from the Company as principal.
(f) Additional Matters. Each certificate, comfort letter and
legal opinion delivered pursuant to subsections (b), (c) and (d), respectively,
of this Section shall address such additional matters, if any, or be
accompanied by such supplements, if any, as may be reasonably required by the
Agent(s).
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including
information deemed to be part of the Registration Statement pursuant to
Rule 430A(b) of the 1933 Act Regulations, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the
27
<PAGE> 28
statements therein, in the light of the circumstances under which they
were made, not misleading, unless such untrue statement or omission or
such alleged untrue statement or omission was made in reliance upon
and in conformity with written information furnished to the Company by
an Agent expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided that such
settlement is effected with the written consent of the Company, which
consent shall not be unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and expenses of counsel chosen by such Agent),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above.
(b) Indemnification of the Company. Each Agent agrees, severally
and not jointly, to indemnify and hold harmless the Company, its directors,
each of its officers who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Agent expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) General. Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. If
any such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall
28
<PAGE> 29
be entitled to participate therein and to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall
not be liable to the indemnified party under this Section for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that each Agent shall have the right to employ counsel to
represent jointly the Agents and their respective controlling persons who may
be subject to liability arising out of any claim in respect of which indemnity
may be sought by the Agents against the Company under this Section if, in the
judgment of any of the Agent or Agents, it is advisable for such Agent or
Agents and controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall be paid
by the Company. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties (which shall not unreasonably be withheld), settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 8 or Section 9 hereof (whether
or not the indemnified parties are actual or potential parties thereto),
unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) EDGAR. For purposes of this Section 8, all references to the
Registration Statement, any preliminary prospectus or the Prospectus, or any
amendment or supplement to any of the foregoing, shall be deemed to include,
without limitation, any electronically transmitted copies thereof, including,
without limitation, any copies filed with the Commission pursuant to EDGAR.
SECTION 9. Contribution.
If the indemnification provided for in Section 8 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses,
29
<PAGE> 30
liabilities, claims, damages and expenses incurred by such indemnified party,
as incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Agents on the other
hand from the offering of the Notes pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Agents on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Agents on the other
hand in connection with the offering of the Notes pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Notes pursuant to this Agreement (before
deducting expenses) received by the Company and the total commission or
underwriting discount received by each Agent, in each case as set forth on the
cover of the applicable pricing supplement, bear to the aggregate initial
public offering price of the Notes sold to or through such Agent as set forth
on such cover. The relative fault of the Company on the one hand and the
Agents on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Agents and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Agents agree that it would not
be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
9. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 9 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, no Agent shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes sold to or through such Agent were offered to the public exceeds the
amount of any damages which such Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 9, each person, if any, who controls an Agent within the
meaning of Section
30
<PAGE> 31
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Agents' respective obligations to contribute pursuant to this
Section 9 are several in proportion to the principal amount of Notes sold to
or through each Agent and not joint.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement and
all amendments thereto and the Prospectus and any amendments or supplements
thereto;
(b) The preparation, filing and reproduction of this Agreement and
the Remarketing Agreement(s), if applicable;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and issuance of
Notes in book-entry form;
(d) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel, and of any calculation agent or
exchange rate agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the program relating to the
Notes and incurred from time to time in connection with the transactions
contemplated hereby;
(f) The qualification of the Notes under state securities laws in
accordance with the provisions of Section 4(i) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation of any Blue Sky or
Legal Investment Survey;
(g) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto, and
the delivery by the Agents of the Prospectus and any amendments or supplements
thereto in connection with solicitations or confirmations of sales of the
Notes;
(h) The preparation, reproducing and delivery to the Agents of
copies of the Indenture and all amendments, supplements and modifications
thereto;
31
<PAGE> 32
(i) Any fees charged by nationally recognized statistical rating
organizations for the rating of the Notes;
(j) The fees and expenses incurred in connection with any listing
of Notes on a securities exchange;
(k) The fees and expenses incurred with respect to any filing with
the National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company; and
(m) The cost of providing any CUSIP or other identification
numbers for the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of an Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as
principal) shall terminate upon the issuance and sale by the Company of all the
Notes covered hereby and may be terminated for any reason, at any time by
either the Company or an Agent, as to itself, upon the giving of 30 days'
written notice of such termination to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. Each
Agent may suspend its obligation to solicit purchases of Notes hereunder or
terminate any agreement by such Agent to purchase Notes from the Company as
principal, and each person that has agreed to purchase Notes from the Company
through an Agent acting as agent hereunder may terminate such agreement,
immediately upon notice to the Company, at any time prior to the Settlement
Date relating thereto, if (i) there has been, since the date of such agreement
or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) there shall
have occurred any material adverse change in the financial markets in the
United States or any outbreak or escalation of hostilities or other national or
international calamity or crisis the effect of
32
<PAGE> 33
which is such as to make it, in the judgment of such Agent or purchaser, as the
case may be, impracticable to market the Notes or enforce contracts for the
sale of the Notes, or (iii) trading in any securities of the Company has been
suspended by the SEC or a national securities exchange, or if trading generally
on either the American Stock Exchange or the New York Stock Exchange shall have
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the SEC or any other governmental authority, or if a
banking moratorium shall have been declared by either Federal, New York or
Texas authorities or if a banking moratorium shall have been declared by the
relevant authorities in the country or countries of origin of any foreign
currency or currencies in which the Notes are denominated or payable, or (iv)
the rating assigned by any nationally recognized statistical rating
organization to any debt securities of the Company as of the date of such
agreement shall have been lowered since that date or if any such rating
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any debt securities
of the Company, or (v) there shall have come to the attention of such Agent or
purchaser, as the case may be, any facts that would cause them to reasonably
believe that the Prospectus, at the time it was required to be delivered to a
purchaser of Notes, included an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time of such delivery, not
misleading. As used in this Section 12(b), the term "Prospectus" means the
Prospectus in the form first provided to the applicable Agent or Agents for use
in confirming sales of the related Notes.
(c) General. In the event of any such termination, neither party
will have any liability to the other party hereto, except that (i) the Agents
shall be entitled to any commission earned in accordance with the third
paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) any
Agent shall own any Notes purchased by it as principal with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted
by the Company but the time of delivery to the purchaser or his agent of the
Note or Notes relating thereto has not occurred, the covenants set forth in
Sections 4 and 7 hereof shall remain in effect until such Notes are so resold
or delivered, as the case may be, and (iii) the covenant set forth in Section
4(h) hereof, the provisions of Section 10 hereof, the indemnity and
contribution agreements set forth in Sections 8 and 9 hereof, and the
provisions of Sections 11, 14 and 15 hereof shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram,
33
<PAGE> 34
and any such notice shall be effective when received at the address specified
below.
If to the Company:
APACHE CORPORATION
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention: Vice President and Treasurer
Telecopy No.: (713) 296-6459
If to the Agents:
FIRST CHICAGO CAPITAL MARKETS, INC.
1 First National Plaza
Suite 0463
Chicago, Illinois 60670
Attention: Walter Green, III, Managing Director
Telecopy No.: (312) 732-3055
LEHMAN BROTHERS INC.
3 World Financial Center, 12th Floor
New York, NY 10285-1200
Attention: Medium-Term Note Department
Telecopy No.: (212) 528-1718
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, NY 10260
Attention: Medium-Term Note Trading Desk
Telecopy No.: (212) 648-5907
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to
in
34
<PAGE> 35
Sections 8 and 9 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and respective successors and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Notes shall be deemed to be
a successor by reason merely of such purchase.
SECTION 16. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
35
<PAGE> 36
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agents and the Company in accordance with its terms.
Very truly yours,
APACHE CORPORATION
By: _____________________________________
Name:
Title:
Confirmed and Accepted, as of the date
first above written:
FIRST CHICAGO CAPITAL MARKETS, INC.
By:__________________________________________
Name:
Title:
LEHMAN BROTHERS INC.
By:__________________________________________
Name:
Title:
J.P. MORGAN SECURITIES INC.
By:_________________________________________
Name:
Title:
36
<PAGE> 37
EXHIBIT A
APACHE CORPORATION
$__________________
REMARKETED NOTES
TERMS AGREEMENT
Dated: __________ __, 1995
TO: Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Re: Distribution Agreement dated _________ __, 1995.
Registration Statement No. 33-_____
Agent or Principal
Transaction: [Agent] [Principal]
Principal Amount: $______________
Initial Interest Rate:
First Interest Rate
Adjustment Date:
Initial Interest Rate
Payment Date(s):
Date of Maturity: ______ __, ____
[Agent's Commission: ______% per Note.]
[Public Offering Price: ______%, plus accrued interest, if
any, from __________, 19__.
Purchase Price: _____%, plus accrued interest, if
any, from ____________, 19__
(payable in [same day][next day]
funds)]
<PAGE> 38
Current ratings:
Closing date and location:
Additional [Agents]
[co-managers], if any:
Specify any requirement for:
Legal Opinions, if any, pursuant to Section 5(b) of the Distribution Agreement
[ ] Woodard, Hall & Primm, P.C.
[ ] Brown & Wood
[ ] Comfort Letter, if any, pursuant to Section 5(c) of the Distribution
Agreement
[ ] Officer's Certificate, if any, pursuant to Section 5(d) of the
Distribution Agreement
[ ] Stand-Off Agreement pursuant to Section 4(k) of the Distribution
Agreement:
* [Each Underwriter severally agrees, subject to the terms and provisions of
the above-referenced Distribution Agreement, which is incorporated herein in
its entirety and made a part hereof, to purchase the principal amount of Notes
set forth opposite its name.
Name Principal Amount of Notes
---- -------------------------
_________________________
Total . . . . . . . . . ]
=========================
[AGENT(S)]
[Managing Underwriters]
By_____________________________________
[Acting on behalf of themselves
and the other named Underwriters]
Accepted:
APACHE CORPORATION
By_____________________________________
__________________________________
* Applies only to principal transactions.
<PAGE> 39
SCHEDULE A
REMARKETED NOTE FEE SCHEDULE
<TABLE>
<CAPTION>
Maturity* Commission
--------- ----------
<S> <C>
1 Day to ( 9 Months .100%
9 Months to (18 Months .150%
18 Months to ( 2 years .200%
2 years to ( 3 years .250%
3 years to ( 4 years .350%
4 years to ( 5 years .450%
5 years to ( 6 years .500%
6 years to ( 7 years .550%
7 years to ( 8 years .600%
8 years to ( 9 years .600%
9 years to (10 years .600%
10 years to (15 years .625%
15 years to (20 years .700%
20 years to (30 years** .750%
</TABLE>
__________________________________
* Period to First Interest Rate Adjustment Date.
** Commissions with respect to Notes with a Maturity (as such term is used in
this Schedule) of 30 years or more will be negotiated between the Company
and the applicable Agent.
<PAGE> 1
APACHE CORPORATION,
Issuer
to
CHEMICAL BANK
Trustee
_______________
INDENTURE
_______________
Dated as of ___________ __, 1995
Debt Securities
<PAGE> 2
Reconciliation and tie between
Trust Indenture Act of 1939 (the "Trust Indenture Act")
and Indenture
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
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Section 310(a)(1) 607
(a)(2) 607
(b) 608
Section 312(a) 701
(b) 702
(c) 702
Section 313(a) 703
(c) 703
(d) 703
Section 314(a) 704
(c)(1) 102
(c)(2) 102
(e) 102
(f) 102
Section 316(a) (last sentence) 101
(a)(1)(A) 502, 512
(a)(1)(B) 513
(b) 508
Section 317(a)(1) 503
(a)(2) 504
(b) 1003
Section 318(a) 108
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Note: This reconciliation and tie shall not, for any purpose, be deemed to
be part of the Indenture.
Attention should also be directed to Section 318(c) of the Trust
Indenture Act, which provides that the provisions of Sections 310 to and
including 317 are a part of and govern every qualified indenture, whether or
not physically contained therein.
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Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Change in Control Purchase Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Change in Control Purchase Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Change in Control Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request and Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Dollars or $ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
European Monetary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indexed Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
New York Banking Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Ordinary Course Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Required Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Sale\Leaseback Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Security or Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Security Register and Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
United States Alien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
U.S. Depository or Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 102. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 103. Form of Documents Delivered to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 104. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 105. Notices, etc. to Trustee and Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 106. Notice to Holders of Securities; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . 15
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Section 107. Language of Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 108. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 109. Effect of Headings and Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 110. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 111. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 112. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 113. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 114. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 115. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 116. Judgment Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE TWO
SECURITIES FORMS
Section 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 202. Form of Trustee's Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . . 19
Section 203. Securities in Global Form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 302. Currency; Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 303. Execution, Authentication, Delivery and Dating. . . . . . . . . . . . . . . . . . . . . . . 24
Section 304. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 305. Registration, Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . . . . . . . . . . . . . . . . . . . 30
Section 307. Payment of Interest and Certain Additional Amounts; Rights to Interest and Certain
Additional Amounts Preserved. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 310. Computation of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401. Satisfaction and Discharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 402. Defeasance and Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 403. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 404. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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ARTICLE FIVE
REMEDIES
Section 501. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 502. Acceleration of Maturity; Rescission and Annulment. . . . . . . . . . . . . . . . . . . . . 43
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee. . . . . . . . . . . . . . 44
Section 504. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 505. Trustee May Enforce Claims without Possession of Securities or Coupons. . . . . . . . . . . 46
Section 506. Application of Money Collected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 507. Limitations on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 508. Unconditional Right of Holders to Receive Principal and any Premium, Interest and
Additional Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 509. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 512. Control by Holders of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 514. Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 515. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 603. Not Responsible for Recitals or Issuance of Securities. . . . . . . . . . . . . . . . . . . 53
Section 604. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 605. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 606. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 607. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 608. Resignation and Removal; Appointment of Successor. . . . . . . . . . . . . . . . . . . . . 54
Section 609. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 610. Merger, Conversion, Consolidation or Succession to Business. . . . . . . . . . . . . . . . 57
Section 611. Appointment of Authenticating Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders. . . . . . . . . . . . . . . . . 60
Section 702. Preservation of Information; Communications to Holders. . . . . . . . . . . . . . . . . . . 60
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Section 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 704. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms. . . . . . . . . . . . . . . . . . . . 62
Section 802. Successor Person Substituted for Company. . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders. . . . . . . . . . . . . . . . . . . . . 63
Section 902. Supplemental Indentures with Consent of Holders. . . . . . . . . . . . . . . . . . . . . . 64
Section 903. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 904. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 905. Reference in Securities to Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . 66
Section 906. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, any Premium, Interest and Additional Amounts. . . . . . . . . . . . . 67
Section 1002. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 1003. Money for Securities Payments to Be Held in Trust. . . . . . . . . . . . . . . . . . . . . 68
Section 1004. Additional Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1005. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 1006. Limitation on Sale/Leaseback Transactions. . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 1007. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 1008. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 1009. Company Statement as to Compliance; Notice of Certain Defaults. . . . . . . . . . . . . . . 75
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 1102. Election to Redeem; Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 1103. Selection by Trustee of Securities to be Redeemed. . . . . . . . . . . . . . . . . . . . . 76
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Section 1104. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 1105. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 1106. Securities Payable on Redemption Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 1107. Securities Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE TWELVE
REPAYMENT AT THE OPTION OF HOLDERS
Section 1201. Applicability of Article. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE THIRTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1301. Applicability of Article. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1401. Purposes for Which Meetings May Be Called. . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 1402. Call, Notice and Place of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 1403. Persons Entitled to Vote at Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 1404. Quorum; Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings. . . . . . . . . . . . 83
Section 1406. Counting Votes and Recording Action of Meetings. . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE FIFTEEN
PURCHASES OF SECURITIES UPON CHANGE IN CONTROL
Section 1501. Purchase of Securities at Option of the Holder upon Change in Control . . . . . . . . . . . 85
Section 1502. Effect of Change in Control Purchase Notice . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 1503. Deposit of Change in Control Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 1504. Covenant to Comply With Securities Laws Upon Purchase of Securities . . . . . . . . . . . . 89
Section 1505. Repayment to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
</TABLE>
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EXHIBIT 4.1
INDENTURE, dated as of ________ __, 1995 (the "Indenture"),
among APACHE CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (hereinafter called the "Company"), having its
principal executive office located at One Post Oak Central, 20000 Post Oak
Boulevard, Suite 100, Houston, Texas 77056-4400, and CHEMICAL BANK, a banking
corporation duly organized and existing under the laws of the State of New York
(hereinafter called the "Trustee"), having its Corporate Trust Office located
at 450 West 33rd Street, 15th Floor, New York, New York 10001.
RECITALS
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its senior
unsecured debentures, notes or other evidences of Indebtedness (hereinafter
called the "Securities"), unlimited as to principal amount, to bear such rates
of interest, to mature at such time or times, to be issued in one or more
series and to have such other provisions as shall be fixed as hereinafter
provided.
The Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder that are required to
be part of this Indenture and, to the extent applicable, shall be governed by
such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders (as herein defined) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of the Securities or of any series thereof and any Coupons (as herein defined)
as follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
Except as otherwise expressly provided in or pursuant to this
Indenture or unless the context otherwise requires, for all purposes of this
Indenture:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles and, except as otherwise herein expressly
provided, the terms "generally accepted accounting principles" or
"GAAP" with respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally accepted at the
date of such computation;
(4) the words "herein", "hereof", "hereto" and "hereunder"
and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision; and
(5) the word "or" is always used inclusively (for example,
the phrase "A or B" means "A or B or both", not "either A or B but not
both").
Certain terms used principally in certain Articles hereof are
defined in those Articles.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" means any additional amounts which are
required hereby or by any Security, under circumstances specified herein or
therein, to be paid by the Company in respect of certain taxes, assessments or
other governmental charges imposed on Holders specified therein and which are
owing to such Holders.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
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<PAGE> 11
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have the meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 611 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper, in an official
language of the place of publication or in the English language, customarily
published on each day that is a Business Day in the place of publication,
whether or not published on days that are Legal Holidays in the place of
publication, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Where
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different newspapers in
the same city meeting the foregoing requirements and in each case on any day
that is a Business Day in the place of publication.
"Bearer Security" means any Security in the form established
pursuant to Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the
Company or any committee of that board duly authorized to act generally or in
any particular respect for the Company hereunder.
"Board Resolution" means a copy of one or more resolutions,
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification, delivered to the Trustee.
"Business Day", with respect to any Place of Payment or other
location, means, unless otherwise specified with respect to any Securities
pursuant to Section 301, any day other than a Saturday, Sunday or other day on
which banking institutions in such Place of Payment or other location are
authorized or obligated by law, regulation or executive order to close.
"Change in Control" has the meaning specified in Section 1501.
"Change in Control Purchase Date" has the meaning specified in
Section 1501.
"Change in Control Purchase Notice" has the meaning specified
in Section 1501.
"Change in Control Purchase Price" has the meaning specified
in Section 1501.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this Indenture such
Commission is not existing and performing the
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<PAGE> 12
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which is not subject to redemption by the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a
written request or order, as the case may be, signed in the name of the Company
by the Chairman of the Board of Directors, a Vice Chairman, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee.
"Consolidated Net Worth" has the meaning specified in Section
1005.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency (other than the ECU) both by the government of the country or the
confederation which issued such Foreign Currency and for the settlement of
transactions by a central bank or other public institutions of or within the
international banking community, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Union or (iii) any currency unit or composite currency
other than the ECU for the purposes for which it was established.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee 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 450 West 33rd Street, 15th Floor, New York, New
York 10001.
"Corporation" includes corporations and limited liability
companies and, except for purposes of Article Eight, associations, companies
and business trusts.
"Coupon" means any interest coupon appertaining to a Bearer
Security.
"Currency", with respect to any payment, deposit or other
transfer in respect of the principal of or any premium or interest on or any
Additional Amounts with respect to any Security, means Dollars or the Foreign
Currency, as the case may be, in which such payment, deposit or other transfer
is required to be made by or pursuant to the terms hereof or such Security and,
with respect to any other payment, deposit or transfer pursuant to or
contemplated by the terms hereof or such Security, means Dollars.
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<PAGE> 13
"CUSIP number" means the alphanumeric designation assigned to
a Security by Standard & Poor's Ratings Group, CUSIP Service Bureau.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollars" or "$" means a dollar or other equivalent unit of
legal tender for payment of public or private debts in the United States of
America.
"ECU" means the European Currency Units as defined and revised
from time to time by the Council of the European Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Community.
"European Union" means the European Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
"Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the ECU, issued by the
government of one or more countries other than the United States of America or
by any recognized confederation or association of such governments.
"GAAP" means such accounting principles as are generally
accepted in the United States of America as of the date or time of any
computation required hereunder.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the other government or
governments in the confederation which issued the Foreign Currency in which the
principal of or any premium or interest on such Security or any Additional
Amounts in respect thereof shall be payable, in each case where the payment or
payments thereunder are supported by the full faith and credit of such
government or governments or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America or such other government or governments, in each case where the
timely payment or payments thereunder are unconditionally guaranteed as a full
faith and credit obligation by the United States of America or such other
government or governments, and which, in the case of (i) or (ii), are not
callable or redeemable at the option of the issuer or issuers thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of or other amount with respect to any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of
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<PAGE> 14
interest on or principal of or other amount with respect to the Government
Obligation evidenced by such depository receipt.
"Holder", in the case of any Registered Security, means the
Person in whose name such Security is registered in the Security Register and,
in the case of any Bearer Security, means the bearer thereof and, in the case
of any Coupon, means the bearer thereof.
"Indebtedness", with respect to any Person, means (a)
indebtedness for borrowed money or for the unpaid purchase price of real or
personal property of, or guaranteed by, such Person, other than accounts
payable arising in the ordinary course of business payable on terms customary
in the trade, (b) indebtedness secured by Liens or payable out of the proceeds
of production from property, (c) indebtedness which is evidenced by mortgages,
notes, bonds, debentures, acceptances or other instruments, (d) indebtedness
which must be capitalized as liabilities under GAAP, (e) liabilities under
interest rate swap, exchange, collar or cap agreements and all other agreements
or arrangements designed to protect against fluctuations in interest rates or
currency exchange rates, (f) liabilities under commodity hedge, commodity swap,
exchange, collar or cap agreements, fixed price agreements and all other
agreements or arrangements designed to protect against fluctuations in oil and
gas prices, and (g) indebtedness relative to the amount of all letters of
credit; provided, however, that such term shall not include any amounts
included as deferred credits on the financial statements of such Person or of a
consolidated group including such Person, and computed in accordance with GAAP.
"Indenture" means this instrument as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof and, with respect to
any Security, by the terms and provisions of such Security and any Coupon
appertaining thereto established pursuant to Section 301 (as such terms and
provisions may be amended pursuant to the applicable provisions hereof).
"Independent Public Accountants" means accountants or a firm
of accountants that, with respect to the Company and any other obligor under
the Securities or the Coupons, are independent public accountants within the
meaning of the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission thereunder, who may be the
independent public accountants regularly retained by the Company or who may be
other independent public accountants. Such accountants or firm shall be
entitled to rely upon any Opinion of Counsel as to the interpretation of any
legal matters relating to this Indenture or certificates required to be
provided hereunder.
"Indexed Security" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be more or
less than the principal face amount thereof at original issuance.
"Interest", with respect to any Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity and, when used with
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<PAGE> 15
respect to a Security which provides for the payment of Additional Amounts
pursuant to Section 1004, includes such Additional Amounts.
"Interest Payment Date", with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 116.
"Legal Holidays", with respect to any Place of Payment or
other location, means a Saturday, a Sunday or a day on which banking
institutions in such Place of Payment or other location are not authorized or
obligated to be open.
"Lien" has the meaning specified in Section 1005.
"Limited Recourse Indebtedness" means Indebtedness of a Person
for which there is no recourse whatsoever to such Person for the repayment
thereof other than recourse limited to the cash flow from the assets
constituting collateral therefor and recourse to the extent necessary to enable
amounts to be claimed in respect of such Indebtedness upon an enforcement of
any Lien on any such assets; provided that (a) the extent of such recourse is
limited solely to the amount of any recoveries made on any such enforcement,
and (b) the holder of such Indebtedness is not entitled, by virtue of any right
or claim arising out of or in connection with such Indebtedness to commence
proceedings for the winding up or dissolution of, or to appoint or procure the
appointment of any receiver, trustee or similar person or official in respect
of, such Person or any of its assets (other than the assets the subject of such
Lien).
"Maturity", 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 provided in or pursuant to this Indenture, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption or repurchase,
notice of option to elect repayment or otherwise, and includes the Redemption
Date and Change in Control Purchase Date.
"New York Banking Day" has the meaning specified in Section
116.
"Office" or "Agency", with respect to any Securities, means an
office or agency of the Company maintained or designated in a Place of Payment
for such Securities pursuant to Section 1002 or any other office or agency of
the Company maintained or designated for such Securities pursuant to Section
1002 or, to the extent designated or required by Section 1002 in lieu of such
office or agency, the Corporate Trust Office of the Trustee.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, that complies with the requirements of Section 314(e)
of the Trust Indenture Act and is delivered to the Trustee.
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<PAGE> 16
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel for the Company or other counsel who shall be
reasonably acceptable to the Trustee, that, if required by the Trust Indenture
Act, complies with the requirements of Section 314(e) of the Trust Indenture
Act and is delivered to the Trustee.
"Ordinary Course Lien" has the meaning specified in Section
1005.
"Original Issue Discount Security" means a Security issued
pursuant to this Indenture which provides for declaration of an amount less
than the principal face amount thereof to be due and payable upon acceleration
pursuant to Section 502.
"Outstanding", when used with respect to any Securities,
means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except:
(a) any such Security theretofore cancelled by the
Trustee or the Security Registrar or delivered to the
Trustee or the Security Registrar for cancellation;
(b) any such Security for whose payment either at the
Maturity thereof or upon the Company becoming
obligated (subject to withdrawal of any Change in
Control Purchase Notice) to pay the Change in Control
Purchase Price, money in the necessary amount has
been theretofore deposited pursuant hereto (other
than pursuant to Section 402) 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 and any Coupons
appertaining thereto, 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;
(c) any such Security with respect to which the Company
has effected defeasance or covenant defeasance
pursuant to Section 402, except to the extent
provided in Section 402; and
(d) any such Security which has been paid pursuant to
Section 306 or in exchange for or in lieu of which
other Securities have been authenticated and
delivered pursuant to this Indenture, unless there
shall have been presented to the Trustee proof
satisfactory to it that such Security is held by a
bona fide purchaser in whose hands such Security is a
valid obligation of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent
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<PAGE> 17
or waiver hereunder or are present at a meeting of Holders of Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount
Security that may be counted in making such determination and that shall be
deemed to be Outstanding for such purposes shall be equal to the amount of the
principal thereof that pursuant to the terms of such Original Issue Discount
Security would be declared (or shall have been declared to be) due and payable
upon a declaration of acceleration thereof pursuant to Section 502 at the time
of such determination, and (ii) the principal amount of any Indexed Security
that may be counted in making such determination and that shall be deemed
outstanding for such purpose shall be equal to the principal face amount of
such Indexed Security at original issuance, unless otherwise provided in or
pursuant to this Indenture, and (iii) the principal amount of a Security
denominated in a Foreign Currency shall be the Dollar equivalent, determined on
the date of original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent on the
date of original issuance of such Security of the amount determined as provided
in (i) above) of such Security, and (iv) Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor, shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making any such
determination or relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee knows to be so owned shall be so disregarded.
Securities so owned which shall have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee
(A) the pledgee's right so to act with respect to such Securities and (B) that
the pledgee is not the Company or any other obligor upon the Securities or any
Coupons appertaining thereto or an Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of, or any premium or interest on, or any Additional Amounts
with respect to, any Security or any Coupon on behalf of the Company.
"Person" means any individual, Corporation, partnership, joint
venture, joint-stock company, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Place of Payment", with respect to any Security, means the
place or places where the principal of, or any premium or interest on, or any
Additional Amounts with respect to such Security are payable as provided in or
pursuant to this Indenture or such Security.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same Indebtedness as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a lost, destroyed, mutilated or stolen Security or
any Security to which a mutilated, destroyed, lost or stolen Coupon appertains
shall be deemed to evidence the same Indebtedness as the lost, destroyed,
mutilated or stolen Security or the Security to which a mutilated, destroyed,
lost or stolen Coupon appertains.
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<PAGE> 18
"Redemption Date", with respect to any Security or portion
thereof to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture or such Security.
"Redemption Price", with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed as
determined by or pursuant to this Indenture or such Security.
"Registered Security" means any Security established pursuant
to Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any
Registered Security on any Interest Payment Date therefor means the date, if
any, specified in or pursuant to this Indenture or such Security as the
"Regular Record Date".
"Required Currency" has the meaning specified in Section 116.
"Responsible Officer" means any officer of the Trustee in its
Corporate Trust Office with direct responsibility for the administration of
this Indenture 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.
Sale\Leaseback Transaction" has the meaning specified in
Section 1006.
"Security" or "Securities" means any note or notes, bond or
bonds, debenture or debentures, or any other evidences of Indebtedness, as the
case may be, authenticated and delivered under this Indenture; provided,
however, that, if at any time there is more than one Person acting as Trustee
under this Indenture, "Securities", with respect to any such Person, shall mean
Securities authenticated and delivered under this Indenture, exclusive,
however, of Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest on any Registered Security means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity" with respect to any Security or any
installment of principal thereof or interest thereon or any Additional Amounts
with respect thereto, means the date established by or pursuant to this
Indenture or such Security as the fixed date on which the
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<PAGE> 19
principal of such Security or such installment of principal or interest is, or
such Additional Amounts are, due and payable.
"Subsidiary" means any Corporation of which at the time of
determination the Company or one or more Subsidiaries owns or controls directly
or indirectly more than 50% of the shares of Voting Stock.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Act or provision, as the case may be, as
amended or replaced from time to time or as supplemented from time to time by
rules or regulations adopted by the Commission under or in furtherance of the
purposes of such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
with respect to one or more series of Securities pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean each Person
who is then a Trustee hereunder; provided, however, that if at any time there
is more than one such Person, "Trustee" shall mean each such Person and as used
with respect to the Securities of any series shall mean the Trustee with
respect to the Securities of such series.
"United States", except as otherwise provided in or pursuant
to this Indenture or any Security, means the United States of America
(including the states thereof and the District of Columbia), its territories
and possessions and other areas subject to its jurisdiction.
"United States Alien", except as otherwise provided in or
pursuant to this Indenture or any Security, means any Person who, for United
States Federal income tax purposes, is a foreign corporation, a non-resident
alien individual, a non-resident alien fiduciary of a foreign estate or trust,
or a foreign partnership one or more of the members of which is, for United
States Federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to any
Security issuable or issued in the form of one or more global Securities, the
Person designated as U.S. Depository or Depository by the Company in or
pursuant to this Indenture, which Person must be, to the extent required by
applicable law or regulation, a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and, if so provided with respect to any
Security, any successor to such Person. If at any time there is more than one
such Person, "U.S. Depository" or "Depository" shall mean, with respect to any
Securities, the qualifying entity which has been appointed with respect to such
Securities.
"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".
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<PAGE> 20
"Voting Stock" means stock of a Corporation of the class or
classes having general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such
Corporation provided that, for the purposes hereof, stock which carries only
the right to vote conditionally on the happening of an event shall not be
considered voting stock whether or not such event shall have happened.
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon
any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents or any of them is specifically required by any provision of
this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the opinion with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture or any Security, they may, but need not,
be consolidated and form one instrument.
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Section 104. Acts of Holders.
(1) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by or pursuant to this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing. If, but only if, Securities of a series
are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in or pursuant to
this Indenture to be given or taken by Holders of Securities of such series
may, alternatively, be embodied in and evidenced by the record of Holders of
Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and (subject to Section 315 of the Trust Indenture Act)
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 1406.
Without limiting the generality of this Section 104, unless
otherwise provided in or pursuant to this Indenture, a Holder, including a U.S.
Depository that is a Holder of a global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other Act provided in or
pursuant to this Indenture to be made, given or taken by Holders, and a U.S.
Depository that is a Holder of a global Security may provide its proxy or
proxies to the beneficial owners of interests in any such global Security
through such U.S. Depository's standing instructions and customary practices.
The Trustee shall fix a record date for the purpose of
determining the Persons who are beneficial owners of interest in any permanent
global Security held by a U.S. Depository entitled under the procedures of such
U.S. Depository to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other Act provided in or pursuant to this Indenture to be made, given or
taken by Holders. If such a record date is fixed, the Holders on such record
date or their duly appointed proxy or proxies, and only such Persons, shall be
entitled to make, give or take such request, demand, authorization, direction,
notice, consent, waiver or other Act, whether or not such Holders remain
Holders after such record date. No such request, demand, authorization,
direction, notice, consent, waiver or other Act shall be valid or effective if
made, given or taken more than 90 days after such record date.
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(2) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient and in accordance with such reasonable rules as the
Trustee may determine; and the Trustee may in any instance require further
proof with respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of
Registered Securities held by any Person, and the date of the commencement and
the date of the termination of holding the same, shall be proved by the
Security Register.
(4) The ownership, principal amount and serial numbers of
Bearer Securities held by any Person, and the date of the commencement and the
date of the termination of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary reasonably acceptable to the
Company, wherever situated, if such certificate shall be deemed by the Company
and the Trustee to be satisfactory, showing that at the date therein mentioned
such Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such certificate or
affidavit is deemed by the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Security continues until
(1) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Security is produced, or (2) such Bearer Security is produced
to the Trustee by some other Person, or (3) such Bearer Security is surrendered
in exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The ownership, principal amount and serial numbers of Bearer
Securities held by the Person so executing such instrument or writing and the
date of the commencement and the date of the termination of holding the same
may also be proved in any other manner which the Company and the Trustee deem
sufficient.
(5) If the Company shall solicit from the Holders of any
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may at its option (but is not
obligated to), by Board Resolution, fix in advance a record date for the
determination of Holders of Registered Securities entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of Registered Securities of record at
the close of business on such record date shall be deemed to be Holders for the
purpose of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
of Registered Securities shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six
months after the record date.
(6) Any request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holder of any Security shall bind every
future Holder of the same Security and
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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 or
suffered to be done by the Trustee, any Security Registrar, any Paying Agent or
the Company in reliance thereon, whether or not notation of such Act is made
upon such Security.
Section 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or other 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 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 Trustee Administration Department, or
(2) the Company by the Trustee or 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 the attention of its Treasurer at
the address of its principal office specified in the first paragraph
of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
Section 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided in or pursuant to this
Indenture, where this Indenture provides for notice to Holders of Securities of
any event,
(1) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such
event, at his address as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of
Bearer Securities, if any, if published in an Authorized Newspaper in
The City of New York and, if such Securities are then listed on any
stock exchange outside the United States, in an Authorized Newspaper
in such city as the Company shall advise the Trustee that such stock
exchange so requires, on a Business Day at least twice, the first such
publication to be not earlier than the earliest date and the second
such publication not later than the latest date prescribed for the
giving of such notice.
In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular
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Holder of a Registered Security shall affect the sufficiency of such notice
with respect to other Holders of Registered Securities or the sufficiency of
any notice to Holders of Bearer Securities given as provided herein. Any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given or provided. In the 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.
In case by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause
it shall be impracticable to publish any notice to Holders of Bearer
Securities as provided above, then such notification to Holders of Bearer
Securities as shall be given with the approval of the Trustee shall constitute
sufficient notice to such Holders for every purpose hereunder. Neither failure
to give notice by publication to Holders of Bearer Securities as provided
above, nor any defect in any notice so published, shall affect the sufficiency
of any notice mailed to Holders of Registered Securities as provided above.
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 of Securities 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.
Section 107. Language of Notices.
Any request, demand, authorization, direction, notice,
consent, election or waiver required or permitted under this Indenture shall be
in the English language, except that, if the Company so elects, any published
notice may be in an official language of the country of publication.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
any duties under any required provision of the Trust Indenture Act imposed
hereon by Section 318(c) thereof, such required provision shall control.
Section 109. 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.
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Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture, any Security or any
Coupon shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture, any Security or any Coupon, express
or implied, shall give to any Person, other than the parties hereto, any
Security Registrar, any Paying Agent and their successors hereunder and the
Holders of Securities or Coupons, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 113. Governing Law.
This Indenture, the Securities and any Coupons shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made or instruments entered into and, in each case,
performed in said state without regard to the conflict of laws principles
thereof.
Section 114. Legal Holidays.
Unless otherwise specified in or pursuant to this Indenture or
any Securities, in any case where any Interest Payment Date, Business Day
following any Change in Control Purchase Date or Stated Maturity or Maturity of
any Security shall be a Legal Holiday at any Place of Payment, then
(notwithstanding any other provision of this Indenture, any Security or any
Coupon other than a provision in any Security or Coupon that specifically
states that such provision shall apply in lieu hereof) payment need not be made
at such Place of Payment on such date, and no interest shall accrue on the
amount payable on such date or at such time for the period from and after such
Interest Payment Date, Business Day following any Change in Control Purchase
Date, Stated Maturity or Maturity, as the case may be, to the next succeeding
Business Day.
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Section 115. Counterparts.
This Indenture may be executed in several counterparts, each
of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 116. Judgment Currency.
The Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of, or premium or interest, if any, or Additional
Amounts on the Securities of any series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding that on which a final unappealable judgment is given and (b) the
Company's obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means
any day except a Saturday, Sunday or a legal holiday in The City of New York or
a day on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to be closed.
ARTICLE TWO
SECURITIES FORMS
Section 201. Forms Generally.
Each Registered Security, Bearer Security, Coupon and
temporary or permanent global Security issued pursuant to this Indenture shall
be in the form established by or pursuant to a Board Resolution, an Officer's
Certificate or in one or more indentures supplemental hereto, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by or pursuant to this Indenture or any indenture
supplemental hereto and may have such letters, numbers or other marks of
identification and such legends or
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endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon.
Unless otherwise provided in or pursuant to this Indenture or
any Securities, the Securities shall be issuable in registered form without
Coupons and shall not be issuable upon the exercise of warrants.
Definitive Securities and definitive Coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers of the Company executing such
Securities or Coupons, as evidenced by their execution of such Securities or
Coupons.
Section 202. Form of Trustee's Certificate of
Authentication.
Subject to Section 611, the Trustee's certificate of
authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
CHEMICAL BANK,
as Trustee
By ________________________________
Authorized Officer
Section 203. Securities in Global Form.
Unless otherwise provided in or pursuant to this Indenture or
any Securities, the Securities shall not be issuable in temporary or permanent
global form. If Securities of a series shall be issuable in global form, any
such Security may provide that it or any number of such Securities shall
represent the aggregate amount of all Outstanding Securities of such series (or
such lesser amount as is permitted by the terms thereof) from time to time
endorsed thereon and may also provide that the aggregate amount of Outstanding
Securities represented thereby may from time to time be increased or reduced to
reflect exchanges. Any endorsement of any Security in global form to reflect
the amount, or any increase or decrease in the amount, or changes in the rights
of Holders, of Outstanding Securities represented thereby shall be made in such
manner and by such Person or Persons as shall be specified therein or in the
Company Order to be delivered pursuant to Section 303 or 304 with respect
thereto. Subject to the provisions of Section 303 and, if applicable, Section
304, the Trustee shall deliver and redeliver any Security in permanent global
form in the manner and upon instructions given by the Person
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or Persons specified therein or in the applicable Company Order. If a Company
Order pursuant to Section 303 or 304 has been, or simultaneously is, delivered,
any instructions by the Company with respect to a Security in global form shall
be in writing but need not be accompanied by or contained in an Officers'
Certificate and need not be accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Section 307, unless
otherwise specified in or pursuant to this Indenture or any Securities, payment
of principal of, any premium and interest on, and any Additional Amounts in
respect of, any Security in temporary or permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent of
the Company and the Trustee shall treat as the Holder of such principal amount
of Outstanding Securities represented by a global Security (i) in the case of a
global Security in registered form, the Holder of such global Security in
registered form, or (ii) in the case of a global Security in bearer form, the
Person or Persons specified pursuant to Section 301.
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more series.
With respect to any Securities to be authenticated and
delivered hereunder, there shall be established in or pursuant to a Board
Resolution, an Officers' Certificate or established in one or more indentures
supplemental hereto,
(1) the title of such Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the
Securities of such title or the Securities of such series which may be
authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration or transfer
of, or in exchange for, or in lieu of, other Securities of such series
pursuant to Section 304, 305, 306, 905 or 1107, upon repayment on part
of any Registered Security of such series pursuant to Article Thirteen
or pursuant to the terms of such Securities);
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(3) if such Securities are to be issuable as Registered
Securities, as Bearer Securities or alternatively as Bearer Securities
and Registered Securities, and whether the Bearer Securities are to be
issuable with Coupons, without Coupons or both, and any restrictions
applicable to the offer, sale or delivery of the Bearer Securities and
the terms, if any, upon which Bearer Securities may be exchanged for
Registered Securities and vice versa;
(4) if any of such Securities are to be issuable in global
form, when any of such Securities are to be issuable in global form
and (i) whether such Securities are to be issued in temporary or
permanent global form or both, (ii) whether beneficial owners of
interests in any such global Security may exchange such interests for
Securities of the same series and of like tenor and of any authorized
form and denomination, and the circumstances under which any such
exchanges may occur, if other than in the manner specified in Section
305, and (iii) the name of the Depository or the U.S. Depository, as
the case may be, with respect to any global Security;
(5) if any of such Securities are to be issuable as Bearer
Securities or in global form, the date as of which any such Bearer
Security or global Security shall be dated (if other than the date of
original issuance of the first of such Securities to be issued);
(6) if any of such Securities are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form payable in respect of an Interest
Payment Date therefor prior to the exchange, if any, of such temporary
Bearer Security for definitive Securities shall be paid to any
clearing organization with respect to the portion of such temporary
Bearer Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date;
(7) the date or dates, or the method or methods, if any, by
which such date or dates shall be determined, on which the principal
of such Securities is payable;
(8) the rate or rates at which such Securities shall bear
interest, if any, or the method or methods, if any, by which such rate
or rates are to be determined, the date or dates, if any, from which
such interest shall accrue or the method or methods, if any, by which
such date or dates are to be determined, the Interest Payment Dates,
if any, on which such interest shall be payable and the Regular Record
Date, if any, for the interest payable on Registered Securities on any
Interest Payment Date, whether and under what circumstances Additional
Amounts on such Securities or any of them shall be payable, the
notice, if any, to Holders regarding the determination of interest on
a floating rate Security and the manner of giving such notice, and the
basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
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(9) if in addition to or other than the Borough of Manhattan,
The City of New York, the place or places where the principal of, any
premium and interest on or any Additional Amounts with respect to such
Securities shall be payable, any of such Securities that are
Registered Securities may be surrendered for registration of transfer
or exchange and notices or demands to or upon the Company in respect
of such Securities and this Indenture may be served, the extent to
which, or the manner in which, any interest payment or Additional
Amounts on a global Security on an Interest Payment Date, will be paid
and the manner in which any principal of or premium, if any, on any
global Security will be paid;
(10) whether any of such Securities are to be redeemable at
the option of the Company and, if so, the date or dates on which, the
period or periods within which, the price or prices at which and the
other terms and conditions upon which such Securities may be redeemed,
in whole or in part, at the option of the Company;
(11) the denominations in which any of such Securities that
are Registered Securities shall be issuable if other than
denominations of $1,000 and any integral multiple thereof, and the
denominations in which any of such Securities that are Bearer
Securities shall be issuable if other than the denomination of $5,000;
(12) if other than the principal amount thereof, the portion
of the principal amount of any of such Securities that shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502 or the method by which such portion is to be
determined;
(13) if other than Dollars, the Foreign Currency in which
payment of the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities shall be
payable;
(14) if the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities are to be
payable, at the election of the Company or a Holder thereof or
otherwise, in Dollars or in a Foreign Currency other than that in
which such Securities are stated to be payable, the date or dates on
which, the period or periods within which, and the other terms and
conditions upon which, such election may be made, and the time and
manner of determining the exchange rate between the Currency in which
such Securities are stated to be payable and the Currency in which
such Securities or any of them are to be paid pursuant to such
election, and any deletions from or modifications of or additions to
the terms of this Indenture to provide for or to facilitate the
issuance of Securities denominated or payable, at the election of the
Company or a Holder thereof or otherwise, in a Foreign Currency;
(15) whether the amount of payments of principal of, any
premium or interest on or any Additional Amounts with respect to such
Securities may be determined with reference to an index, formula or
other method or methods (which index, formula or
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method or methods may be based, without limitation, on one or more
Currencies, commodities, equity indices or other indices), and, if so,
the terms and conditions upon which and the manner in which such
amounts shall be determined and paid or payable;
(16) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to any of
such Securities, whether or not such Events of Default or covenants
are consistent with the Events of Default or covenants set forth
herein;
(17) if either or both of Section 402(2) relating to
defeasance or Section 402(3) relating to covenant defeasance shall not
be applicable to the Securities of such series, or any covenants in
addition to those specified in Section 402(3) relating to the
Securities of such series shall be subject to covenant defeasance, and
any deletions from, or modifications or additions to, the provisions
of Article Four in respect of the Securities of such series;
(18) if any of such Securities are to be issuable upon the
exercise of warrants, and the time, manner and place for such
Securities to be authenticated and delivered;
(19) if any of such Securities are to be issuable in global
form and are to be issuable in definitive form (whether upon original
issue or upon exchange of a temporary Security) only upon receipt of
certain certificates or other documents or satisfaction of other
conditions, then the form and terms of such certificates, documents or
conditions;
(20) if there is more than one Trustee, the identity of the
Trustee and, if not the Trustee, the identity of each Security
Registrar, Paying Agent or Authenticating Agent with respect to such
Securities;
(21) if a Change in Control occurs, the Change in Control
Purchase Price; and
(22) any other terms of such Securities and any deletions from
or modifications or additions to this Indenture in respect of such
Securities.
All Securities of any one series and all Coupons, if any,
appertaining to Bearer Securities of such series shall be substantially
identical except as to Currency of payments due thereunder, denomination and
the rate of interest, or method of determining the rate of interest, if any,
Maturity, and the date from which interest, if any, shall accrue and except as
may otherwise be provided by the Company in or pursuant to the Board Resolution
and set forth in the Officers' Certificate or in any indenture or indentures
supplemental hereto pertaining to such series of Securities. The terms of the
Securities of any series may provide, without limitation, that the Securities
shall be authenticated and delivered by the Trustee on original issue from time
to time upon telephonic or written order of persons designated in the Officers'
Certificate or supplemental indenture (telephonic instructions to be promptly
confirmed in writing by such person) and that such persons are authorized to
determine, consistent with such Officers'
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Certificate or any applicable supplemental indenture, such terms and conditions
of the Securities of such series as are specified in such Officers' Certificate
or supplemental indenture. All Securities of any one series need not be issued
at the same time and, unless otherwise so provided by the Company, a series may
be reopened for issuances of additional Securities of such series or to
establish additional terms of such series of Securities.
If any of the terms of the Securities of any series shall be
established by action taken by or pursuant to a Board Resolution, the Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
Section 302. Currency; Denominations.
Unless otherwise provided in or pursuant to this Indenture,
the principal of, any premium and interest on and any Additional Amounts with
respect to the Securities shall be payable in Dollars. Unless otherwise
provided in or pursuant to this Indenture, Registered Securities denominated in
Dollars shall be issuable in registered form without Coupons in denominations
of $1,000 and any integral multiple thereof, and the Bearer Securities
denominated in Dollars shall be issuable in the denomination of $5,000.
Securities not denominated in Dollars shall be issuable in such denominations
as are established with respect to such Securities in or pursuant to this
Indenture.
Section 303. Execution, Authentication, Delivery and
Dating.
Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairmen, its President, its Treasurer
or one of its Vice Presidents under its corporate seal reproduced thereon and
attested by its Secretary or one of its Assistant Secretaries. Coupons shall
be executed on behalf of the Company by the Treasurer, one of its Vice
Presidents or any Assistant Treasurer of the Company. The signature of any of
these officers on the Securities or any Coupons appertaining thereto may be
manual or facsimile.
Securities and any Coupons appertaining thereto 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 or Coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities, together with
any Coupons appertaining thereto, executed by the Company, to the Trustee for
authentication and, provided that the Board Resolution and Officers'
Certificate or supplemental indenture or indentures with respect to such
Securities referred to in Section 301 and a Company Order for the
authentication and delivery
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of such Securities have been delivered to the Trustee, the Trustee in
accordance with the Company Order and subject to the provisions hereof and of
such Securities shall authenticate and deliver such Securities. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities and any Coupons
appertaining thereto, the Trustee shall be entitled to receive, and (subject to
Sections 315(a) through 315(d) of the Trust Indenture Act) shall be fully
protected in relying upon,
(1) an Opinion of Counsel to the effect that:
(a) the form or forms and terms of such Securities and
Coupons, if any, have been established in conformity with the
provisions of this Indenture;
(b) all conditions precedent to the authentication and
delivery of such Securities and Coupons, if any, appertaining thereto,
have been complied with and that such Securities, and Coupons, when
completed by appropriate insertions, executed under the Company's
corporate seal and attested by duly authorized officers of the
Company, delivered by duly authorized officers of the Company to the
Trustee for authentication pursuant to this Indenture, and
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 legally valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except as enforcement thereof may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium, arrangement,
fraudulent conveyance, fraudulent transfer or other similar laws
relating to or affecting creditors' rights generally, and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and will entitle the
Holders thereof to the benefits of this Indenture; such Opinion of
Counsel need express no opinion as to the availability of equitable
remedies;
(c) all laws and requirements in respect of the execution
and delivery by the Company of such Securities and Coupons, if any,
have been complied with; and
(d) this Indenture has been qualified under the Trust
Indenture Act; and
(2) an Officers' Certificate stating that, to the best
knowledge of the Persons executing such certificate, no event which is, or
after notice or lapse of time would become, an Event of Default with respect to
any of the Securities shall have occurred and be continuing.
If all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Opinion of Counsel and an
Officers' Certificate at the time of issuance of each Security, but such
opinion and certificate, with appropriate modifications, shall be delivered at
or before the time of issuance of the first Security of such series. After any
such first delivery, any separate request by the Company that the Trustee
authenticate Securities of such series for original issue will be deemed to be
a certification by the Company that all
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conditions precedent provided for in this Indenture relating to authentication
and delivery of such Securities continue to have been complied with.
The Trustee shall not be required to authenticate or to cause
an Authenticating Agent to authenticate any 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 or if the Trustee,
being advised by counsel, determines that such action may not lawfully be
taken.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security and any Bearer Security in global form
shall be dated as of the date specified in or pursuant to this Indenture.
No Security or Coupon appertaining thereto shall be entitled
to any benefit under this Indenture or be valid or obligatory for any purpose,
unless there appears on such Security a certificate of authentication
substantially in the form provided for in Section 202 or 611 executed by or on
behalf of the Trustee or by the Authenticating Agent by the manual signature of
one of its authorized officers. Such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Except as permitted by Section 306 or
307, the Trustee shall not authenticate and deliver any Bearer Security unless
all Coupons appertaining thereto then matured have been detached and cancelled.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company
may execute and deliver to the Trustee and, upon Company Order, the Trustee
shall authenticate and deliver, in the manner provided in Section 303,
temporary Securities in lieu thereof 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, in registered form or, if authorized in or pursuant
to this Indenture, in bearer form with one or more Coupons or without Coupons
and with such appropriate insertions, omissions, substitutions and other
variations as the officers of the Company executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
Such temporary Securities may be in global form.
Except in the case of temporary Securities in global form,
which shall be exchanged in accordance with the provisions thereof, if
temporary Securities are issued, the Company shall cause definitive Securities
to be prepared without unreasonable delay. After the preparation of definitive
Securities of the same series and containing terms and provisions that are
identical to those of any temporary Securities, such temporary Securities shall
be exchangeable for such definitive Securities upon surrender of such temporary
Securities at an Office or Agency for such Securities, without charge to any
Holder thereof. Upon surrender
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<PAGE> 35
for cancellation of any one or more temporary Securities (accompanied by any
unmatured Coupons appertaining thereto), the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations of the same series
and containing identical terms and provisions; provided, however, that no
definitive Bearer Security, except as provided in or pursuant to this
Indenture, shall be delivered in exchange for a temporary Registered Security;
and provided, further, that a definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in or pursuant to this Indenture. Unless otherwise provided in or
pursuant to this Indenture with respect to a temporary global Security, 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 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if
any, the Company shall cause to be kept a register (each such register being
herein sometimes referred to as the "Security Register") at an Office or Agency
for such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that
series of Securities. Unless otherwise specified in or pursuant to this
Indenture or the Securities, the Trustee shall be the initial Security
Registrar for each series of Securities. The Company shall have the right to
remove and replace from time to time the Security Registrar for any series of
Securities; provided that no such removal or replacement shall be effective
until a successor Security Registrar with respect to such series of Securities
shall have been appointed by the Company and shall have accepted such
appointment by the Company. In the event that the Trustee shall not be or
shall cease to be Security Registrar with respect to a series of Securities, it
shall have the right to examine the Security Register for such series at all
reasonable times. There shall be only one Security Register for each series of
Securities.
Upon surrender for registration of transfer of any Registered
Security of any series at any Office or Agency for such series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series denominated as authorized in or pursuant to this Indenture,
of a like aggregate principal amount bearing a number not contemporaneously
outstanding and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any
series may be exchanged for other Registered Securities of the same series
containing identical terms and provisions, in any authorized denominations, and
of a like aggregate principal amount, upon surrender of the Securities to be
exchanged at any Office or Agency for such series. Whenever any Registered
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall
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authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive.
If provided in or pursuant to this Indenture, with respect to
Securities of any series, at the option of the Holder, Bearer Securities of
such series may be exchanged for Registered Securities of such series
containing identical terms, denominated as authorized in or pursuant to this
Indenture and in the same aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any Office or Agency for such series, with
all unmatured Coupons and all matured Coupons in default thereto appertaining.
If the Holder of a Bearer Security is unable to produce any such unmatured
Coupon or Coupons or matured Coupon or Coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company and the Trustee in an amount equal to the face amount
of such missing Coupon or Coupons, or the surrender of such missing Coupon or
Coupons may be waived by the Company and the Trustee if there is furnished to
them such security or indemnity as they may require to save each of them and
any Paying Agent harmless. If thereafter the Holder of such Bearer Security
shall surrender to any Paying Agent any such missing Coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 1002, interest represented by Coupons shall be payable only
upon presentation and surrender of those Coupons at an Office or Agency for
such series located outside the United States. Notwithstanding the foregoing,
in case a Bearer Security of any series is surrendered at any such Office or
Agency for such series in exchange for a Registered Security of such series and
like tenor after the close of business at such Office or Agency on (i) any
Regular Record Date and before the opening of business at such Office or Agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such Office or Agency on the related date for
payment of Defaulted Interest, such Bearer Security shall be surrendered
without the Coupon relating to such Interest Payment Date or proposed date of
payment, as the case may be (or, if such Coupon is so surrendered with such
Bearer Security, such Coupon shall be returned to the Person so surrendering
the Bearer Security), and interest or Defaulted Interest, as the case may be,
shall not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of the Registered Security issued in
exchange for such Bearer Security, but shall be payable only to the Holder of
such Coupon when due in accordance with the provisions of this Indenture.
If provided in or pursuant to this Indenture with respect to
Securities of any series, at the option of the Holder, Registered Securities of
such series may be exchanged for Bearer Securities upon such terms and
conditions as may be provided in or pursuant to this Indenture with respect to
such series.
Whenever any Securities are surrendered for exchange as
contemplated by the immediately preceding two paragraphs, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
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Notwithstanding the foregoing, except as otherwise provided in
or pursuant to this Indenture, any global Security shall be exchangeable for
definitive Securities only if (i) the Depository is at any time unwilling,
unable or ineligible to continue as Depository and a successor depository is
not appointed by the Company within 90 days of the date the Company is so
informed in writing, (ii) the Company executes and delivers to the Trustee a
Company Order to the effect that such global Security shall be so exchangeable,
or (iii) an Event of Default has occurred and is continuing with respect to the
Securities. If the beneficial owners of interests in a global Security are
entitled to exchange such interests for definitive Securities as the result of
an event described in clause (i), (ii) or (iii) of the preceding sentence, then
without unnecessary delay but in any event not later than the earliest date on
which such interests may be so exchanged, the Company shall deliver to the
Trustee definitive Securities in such form and denominations as are required by
or pursuant to this Indenture, and of the same series, containing identical
terms and in aggregate principal amount equal to the principal amount of such
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such global Security shall be
surrendered from time to time by the U.S. Depository or such other Depository
as shall be specified in the Company Order with respect thereto, and in
accordance with instructions given to the Trustee and the U.S. Depository or
such other Depository, as the case may be (which instructions shall be in
writing but need not be contained in or accompanied by an Officers' Certificate
or be accompanied by an Opinion of Counsel), as shall be specified in the
Company Order with respect thereto to the Trustee, as the Company's agent for
such purpose, to be exchanged, in whole or in part, for definitive Securities
as described above without charge. The Trustee shall authenticate and make
available for delivery, in exchange for each portion of such surrendered global
Security, a like aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such global Security to be exchanged, which (unless such Securities are not
issuable both as Bearer Securities and as Registered Securities, in which case
the definitive Securities exchanged for the global Security shall be issuable
only in the form in which the Securities are issuable, as provided in or
pursuant to this Indenture) shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof, but subject to the satisfaction of any certification
or other requirements to the issuance of Bearer Securities; provided, however,
that no such exchanges may occur during a period beginning at the opening of
business 15 days before any selection of Securities of the same series to be
redeemed and ending on the relevant Redemption Date; and provided, further,
that (unless otherwise provided in or pursuant to this Indenture) no Bearer
Security delivered in exchange for a portion of a global Security shall be
mailed or otherwise delivered to any location in the United States. Promptly
following any such exchange in part, such global Security shall be returned by
the Trustee to such Depository or the U.S. Depository, as the case may be, or
such other Depository or U.S. Depository referred to above in accordance with
the instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a global Security after the close of
business at the Office or Agency for such Security where such exchange occurs
on or after (i) any Regular Record Date for such Security and before the
opening of business at such Office or Agency on the next Interest Payment Date,
or (ii) any Special Record Date for such Security and before the opening of
business at such Office or Agency on the related proposed date for payment of
interest or
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Defaulted Interest, as the case may be, interest shall not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but shall be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such global Security
shall be payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company evidencing
the same debt and entitling the Holders thereof to the same benefits under this
Indenture as the Securities surrendered upon such registration of transfer or
exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange or redemption shall (if so required by
the Company or the Security Registrar for such Security) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar for such Security duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange, or redemption of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge.
Except as otherwise provided in or pursuant to this Indenture,
the Company shall not be required (i) to issue, register the transfer of or
exchange any Securities during a period beginning at the opening of business 15
days before the day of the selection for redemption of Securities of like tenor
and the same series under Section 1103 and ending at the close of business on
the day of such selection, or (ii) to register the transfer of or exchange any
Registered Security so selected for redemption in whole or in part, except in
the case of any Security to be redeemed in part, the portion thereof not to be
redeemed, or (iii) to exchange any Bearer Security so selected for redemption
except, to the extent provided with respect to such Bearer Security, that such
Bearer Security may be exchanged for a Registered Security of like tenor and
the same series, provided that such Registered Security shall be immediately
surrendered for redemption with written instruction for payment consistent with
the provisions of this Indenture or (iv) to issue, register the transfer of or
exchange any Security which, in accordance with its terms, has been surrendered
for repayment at the option of the Holder, except the portion, if any, of such
Security not to be so repaid.
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security or a Security with a mutilated
Coupon appertaining to it is surrendered to the Trustee, subject to the
provisions of this Section 306, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series
containing identical terms and of like principal amount and bearing a number
not
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contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.
If there be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or Coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such Security or
Coupon has been acquired by a bona fide purchaser, the Company shall execute
and, upon Company Request the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Security or in exchange for the Security to which a destroyed, lost or stolen
Coupon appertains with all appurtenant Coupons not destroyed, lost or stolen, a
new Security of the same series containing identical terms and of like
principal amount and bearing a number not contemporaneously outstanding, with
Coupons corresponding to the Coupons, if any, appertaining to such destroyed,
lost or stolen Security or to the Security to which such destroyed, lost or
stolen Coupon appertains.
Notwithstanding the foregoing provisions of this Section 306,
in case any mutilated, destroyed, lost or stolen Security or Coupon has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security or Coupon; provided,
however, that principal of, any premium or interest on or any Additional
Amounts with respect to any Bearer Securities shall, except as otherwise
provided in Section 1002, be payable only at an Office or Agency for such
Securities located outside the United States and, unless otherwise provided in
or pursuant to this Indenture, any interest on Bearer Securities and any
Additional Amounts with respect to such interest shall be payable only upon
presentation and surrender of the Coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security, with any Coupons appertaining thereto
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
Coupon appertains shall constitute a separate obligation of the Company,
whether or not the destroyed, lost or stolen Security and Coupons appertaining
thereto or the destroyed, lost or stolen Coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of such
series and the Coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented
pursuant to this Indenture with respect to particular Securities or generally,
shall be exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or Coupons.
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Section 307. Payment of Interest and Certain Additional
Amounts; Rights to Interest and Certain
Additional Amounts Preserved.
Unless otherwise provided in or pursuant to this Indenture,
any interest on and any Additional Amounts with respect to any Registered
Security which shall be payable, and are punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name such
Security (or one or more Predecessor Securities) is registered as of the close
of business on the Regular Record Date for such interest. Unless otherwise
provided in or pursuant to this Indenture, in case a Bearer Security is
surrendered in exchange for a Registered Security after the close of business
at an Office or Agency for such Security on any Regular Record Date therefor
and before the opening of business at such Office or Agency on the next
succeeding Interest Payment Date therefor, such Bearer Security shall be
surrendered without the Coupon relating to such Interest Payment Date and
interest shall not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange for such Bearer Security, but shall be
payable only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture.
Unless otherwise provided in or pursuant to this Indenture,
any interest on and any Additional Amounts with respect to any Registered
Security which shall be payable, but shall not be punctually paid or duly
provided for, on any Interest Payment Date for such Registered Security (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
thereof 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 Person in whose name such Registered
Security (or a Predecessor Security thereof) shall be registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on such Registered Security 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
on or prior to the date of the proposed payment, such money when so
deposited to be held in trust for the benefit of the Person entitled
to such Defaulted Interest as 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 the Holder of such Registered Security
(or a Predecessor Security thereof) at his address as it appears in
the Security Register not
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less than 10 days prior to such Special Record Date. The Trustee may,
in its discretion, in the name and at the expense of the Company cause
a similar notice to be published at least once in an Authorized
Newspaper of general circulation in the Borough of Manhattan, The City
of New York, but such publication shall not be a condition precedent
to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Person in whose name such Registered Security (or
a Predecessor Security thereof) shall be registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2). In case a Bearer Security is
surrendered at the Office or Agency for such Security in exchange for
a Registered Security after the close of business at such Office or
Agency on any Special Record Date and before the opening of business
at such Office or Agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without
the Coupon relating to such Defaulted Interest and Defaulted Interest
shall not be payable on such proposed date of payment in respect of
the Registered Security issued in exchange for such Bearer Security,
but shall be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Security 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 payment shall be deemed
practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or
the Securities of any particular series, at the option of the Company, interest
on Registered Securities that bear interest may be paid by mailing a check to
the address of the Person entitled thereto as such address shall appear in the
Security Register or by transfer to an account maintained by the payee with a
bank located in the United States.
Subject to the foregoing provisions of this Section and
Section 305, 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 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Registered Security is
registered in the Security Register as the owner of such Registered Security
for the purpose of receiving payment of principal of, any premium and (subject
to Sections 305 and 307) interest on and any Additional Amounts with respect to
such
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Registered Security and for all other purposes whatsoever, whether or not any
payment with respect to such Registered Security shall be overdue, and neither
the Company, nor the Trustee or any agent of the Company or the Trustee shall
be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security or the bearer of any Coupon
as the absolute owner of such Security or Coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not any payment with respect to such Security or Coupon shall be
overdue, and neither the Company, nor the Trustee or any agent of the Company
or the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security
held on its behalf by a Depository shall have any rights under this Indenture
with respect to such global Security, and such Depository may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such global Security for all purposes whatsoever. None of the Company, the
Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Section 309. Cancellation.
All Securities and Coupons surrendered for payment,
redemption, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee, and any such
Securities and Coupons, as well as Securities and Coupons surrendered directly
to the Trustee for any such purpose, shall be cancelled promptly by the
Trustee. 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 cancelled promptly 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 or pursuant to this
Indenture. All cancelled Securities and Coupons held by the Trustee shall be
destroyed by the Trustee, unless by a Company Order the Company directs their
return to it.
Section 310. Computation of Interest.
Except as otherwise provided in or pursuant to this Indenture
or in any Security, interest on the Securities shall be computed on the basis
of a 360-day year of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401. Satisfaction and Discharge.
Upon the direction of the Company by a Company Order, this
Indenture shall cease to be of further effect with respect to any series of
Securities specified in such Company Order and any Coupons appertaining
thereto, and the Trustee, on receipt of a Company Order, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture as to such series, when
(1) either
(a) all Securities of such series theretofore
authenticated and delivered and all Coupons appertaining thereto
(other than (i) Coupons appertaining to Bearer Securities of such
series surrendered in exchange for Registered Securities of such
series and maturing after such exchange whose surrender is not
required or has been waived as provided in Section 305, (ii)
Securities and Coupons of such series which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
306, (iii) Coupons appertaining to Securities of such series called
for redemption and maturing after the relevant Redemption Date whose
surrender has been waived as provided in Section 1107, and (iv)
Securities and Coupons of such series for whose payment money in the
applicable Currency has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for cancellation; or
(b) all Securities of such series and, in the
case of (i) or (ii) below, any Coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company,
are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose, money in the Currency in which such Securities
are payable in an amount sufficient to pay and
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discharge the entire indebtedness on such Securities and any Coupons
appertaining thereto not theretofore delivered to the Trustee for
cancellation, including the principal of, any premium and interest on,
and any Additional Amounts with respect to such Securities and any
Coupons appertaining thereto, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Maturity
thereof, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company with respect to the Outstanding
Securities of such series and any Coupons appertaining thereto; 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 as to such series have been complied
with.
In the event there are Securities of two or more series
hereunder, the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Securities of such series as to which it is Trustee and if the other
conditions thereto are met.
Notwithstanding the satisfaction and discharge of this
Indenture with respect to any series of Securities, the obligations of the
Company to the Trustee under Section 606 and, if money shall have been
deposited with the Trustee pursuant to subclause (b) of clause (1) of this
Section, the obligations of the Company and the Trustee with respect to the
Securities of such series under Sections 305, 306, 403, 1002 and 1003, with
respect to the payment of Additional Amounts, if any, with respect to such
Securities as contemplated by Section 1004 (but only to the extent that the
Additional Amounts payable with respect to such Securities exceed the amount
deposited in respect of such Additional Amounts pursuant to Section 401(1)(b)),
shall survive.
Section 402. Defeasance and Covenant Defeasance.
(1) Unless, pursuant to Section 301, either or both of
(i) defeasance of the Securities of or within a series under clause (2) of this
Section 402, or (ii) covenant defeasance of the Securities of or within a
series under clause (3) of this Section 402 shall not be applicable with
respect to the Securities of such series, then such provisions, together with
the other provisions of this Section 402 (with such modifications thereto as
may be specified pursuant to Section 301 with respect to any Securities), shall
be applicable to such Securities and any Coupons appertaining thereto, and the
Company may at its option by Board Resolution or Officers' Certificate, at any
time, with respect to such Securities and any Coupons appertaining thereto,
elect to have Section 402(2) or Section 402(3) be applied to such Outstanding
Securities
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and any Coupons appertaining thereto upon compliance with the conditions set
forth below in this Section 402.
(2) Upon the Company's exercise of the above option
applicable to this Section 402(2) with respect to any Securities of or within a
series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any Coupons
appertaining thereto on the date the conditions set forth in clause (4) of
this Section 402 are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by such Outstanding Securities
and any Coupons appertaining thereto, which shall thereafter be deemed to be
"Outstanding" only for the purposes of clause (5) of this Section 402 and the
other Sections of this Indenture referred to in clauses (i) and (ii) below, and
to have satisfied all of its other obligations under such Securities and any
Coupons appertaining thereto and this Indenture insofar as such Securities and
any Coupons appertaining thereto are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of such Outstanding Securities
and any Coupons appertaining thereto to receive, solely from the trust fund
described in clause (4) of this Section 402 and as more fully set forth in such
Section, payments in respect of the principal of (and premium, if any) and
interest, if any, on, and Additional Amounts, if any, with respect to, such
Securities and any Coupons appertaining thereto when such payments are due, and
any rights of such Holder to convert or exchange such Securities into Common
Stock or other securities, (ii) the obligations of the Company and the Trustee
with respect to such Securities under Sections 305, 306, 1002 and 1003, with
respect to the payment of Additional Amounts, if any, on such Securities as
contemplated by Section 1004 (but only to the extent that the Additional
Amounts payable with respect to such Securities exceed the amount deposited in
respect of such Additional Amounts pursuant to Section 401(4)(a) below), (iii)
the rights, powers, trusts, duties and immunities of the Trustee hereunder and
(iv) this Section 402. The Company may exercise its option under this Section
402(2) notwithstanding the prior exercise of its option under clause (3) of
this Section 402 with respect to such Securities and any Coupons appertaining
thereto.
(3) Upon the Company's exercise of the above option
applicable to this Section 402(3) with respect to any Securities of or within a
series, the Company shall be released from its obligations under Sections 1005
and 1006, and, to the extent specified pursuant to Section 301, any other
covenant applicable to such Securities, with respect to such Outstanding
Securities and any Coupons appertaining thereto on and after the date the
conditions set forth in clause (4) of this Section 402 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any Coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders
(and the consequences of any thereof) in connection with any such covenant, but
shall continue to be deemed "Outstanding" for all other purposes hereunder.
For this purpose, such covenant defeasance means that, with respect to such
Outstanding Securities and any Coupons appertaining thereto, the Company may
omit to comply with, and shall have no liability in respect of, any term,
condition or limitation set forth in any such Section or such other covenant,
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whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any such
Section or such other covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a default or an Event
of Default under Section 501(3) or 501(4) or otherwise, as the case may be,
but, except as specified above, the remainder of this Indenture and such
Securities and Coupons appertaining thereto shall be unaffected thereby.
(4) The following shall be the conditions to application
of clause (2) or (3) of this Section 402 to any Outstanding Securities of or
within a series and any Coupons appertaining thereto:
(a) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 607 who shall agree to comply with the
provisions of this Section 402 applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities and any Coupons appertaining thereto,
(1) an amount in Dollars or in such Foreign Currency
in which such Securities and any Coupons appertaining thereto
are then specified as payable at Stated Maturity, or
(2) Government Obligations applicable to such
Securities and Coupons appertaining thereto (determined on the
basis of the Currency in which such Securities and Coupons
appertaining thereto are then specified as payable at Stated
Maturity) which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of
any payment of principal of (and premium, if any) and
interest, if any, on such Securities and any Coupons
appertaining thereto, money in an amount, or
(3) a combination thereof,
in any case, in an amount, sufficient, without consideration
of any reinvestment of such principal and interest, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee)
to pay and discharge, the principal of (and premium, if any)
and interest, if any, on such Outstanding Securities and any
Coupons appertaining thereto on the Stated Maturity of such
principal or installment of principal or interest on the day
on which such payments are due and payable in accordance with
the terms of this Indenture and of such Securities and any
Coupons appertaining thereto.
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(b) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument to which
the Company is a party or by which it is bound.
(c) No Event of Default or event which with notice or
lapse of time or both would become an Event of Default with respect to
such Securities and any Coupons appertaining thereto shall have
occurred and be continuing on the date of such deposit and, with
respect to defeasance only, at any time during the period ending on
the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of
such period).
(d) In the case of an election under clause (2) of this
Section 402, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (i) the Company has received from the
Internal Revenue Service a letter ruling, or there has been published
by the Internal Revenue Service a Revenue Ruling, or (ii) since the
date of execution of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any Coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such defeasance had not occurred.
(e) In the case of an election under clause (3) of this
Section 402, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of such Outstanding
Securities and any Coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance or covenant defeasance under
clause (2) or (3) of this Section 402 (as the case may be) have been
complied with.
(g) Notwithstanding any other provisions of this Section
402(4), such defeasance or covenant defeasance shall be effected in
compliance with any additional or substitute terms, conditions or
limitations which may be imposed on the Company in connection
therewith pursuant to Section 301.
(5) Subject to the provisions of the last paragraph of
Section 1003, all money and Government Obligations (or other property as may be
provided pursuant to Section 301) (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee,
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collectively for purposes of this Section 402(5) and Section 403, the
"Trustee") pursuant to clause (4) of Section 402 in respect of any Outstanding
Securities of any series and any Coupons appertaining thereto shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and any Coupons appertaining thereto and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities and any Coupons appertaining thereto of all sums due and to
become due thereon in respect of principal (and premium, if any) and interest
and Additional Amounts, if any, but such money need not be segregated from
other funds except to the extent required by law.
Unless otherwise specified in or pursuant to this Indenture or
any Security, if, after a deposit referred to in Section 402(4)(a) has been
made, (a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a Currency other than that in which the deposit
pursuant to Section 402(4)(a) has been made in respect of such Security, or (b)
a Conversion Event occurs in respect of the Foreign Currency in which the
deposit pursuant to Section 402(4)(a) has been made, the indebtedness
represented by such Security and any Coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if any, on,
and Additional Amounts, if any, with respect to, such Security as the same
becomes due out of the proceeds yielded by converting (from time to time as
specified below in the case of any such election) the amount or other property
deposited in respect of such Security into the Currency in which such Security
becomes payable as a result of such election or Conversion Event based on (x)
in the case of payments made pursuant to clause (a) above, the applicable
market exchange rate for such Currency in effect on the second Business Day
prior to each payment date, or (y) with respect to a Conversion Event, the
applicable market exchange rate for such Foreign Currency in effect (as nearly
as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge, imposed on or assessed against the Government
Obligations deposited pursuant to this Section 402 or the principal or interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding Securities and any
Coupons appertaining thereto.
Anything in this Section 402 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Obligations (or other property and any proceeds
therefrom) held by it as provided in clause (4) of this Section 402 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Section 402.
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Section 403. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money and Government Obligations deposited with the Trustee pursuant
to Section 401 or 402 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the Coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal, premium, interest and Additional Amounts
for whose payment such money has or Government Obligations have been deposited
with or received by the Trustee; but such money and Government Obligations need
not be segregated from other funds except to the extent required by law.
Section 404. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article with respect to any Securities by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations
under this Indenture and such Securities from which the Company has been
discharged or released pursuant to this Article shall be revived and reinstated
as though no deposit has occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to
apply all money held in trust pursuant to this Article with respect to such
Securities in accordance with this Article; provided, however, that if the
Company makes any payment of principal of or any premium or interest on any
such Security following reinstatement of its obligations, the Company shall be
subrogated to the rights (if any) of the Holders of such Securities to receive
such payment from the money so held in trust.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body), unless such event is specifically deleted or modified in or
pursuant to the supplemental indenture, Board Resolution or Officers'
Certificate establishing the terms of such Series pursuant to this Indenture:
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(1) failure to pay any interest on or any Additional
Amounts payable in respect of any Security of such series when such interest
becomes or such Additional Amounts become due and payable, and continuance of
such default for a period of 30 days; or
(2) failure to pay the principal of or any premium on any
Security of such series when it becomes due and payable at either its Maturity
or, if applicable, at 12:00 noon on the Business Day following the Change in
Control Purchase Date; or
(3) failure to perform or the breach, of any covenant or
warranty of the Company in this Indenture or the Securities (other than a
covenant or warranty a default in the performance or the breach of which is
elsewhere in this Section specifically dealt with or which has been expressly
included in this Indenture solely for the benefit of a series of Securities
other than such series), and continuance of such failure or breach for a period
of 60 days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of such series, a
written notice specifying such failure or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(4) if any event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by which there may
be secured or evidenced, any Indebtedness (other than Indebtedness constituting
Limited Recourse Indebtedness) of the Company or any Subsidiary, whether such
Indebtedness now exists or shall hereafter be created, shall happen and shall
result in Indebtedness of the Company or any Subsidiary in excess of
$25,000,000 aggregate principal amount becoming or being declared due and
payable prior to the date on which such Indebtedness would otherwise become due
and payable, and such acceleration shall not be rescinded or annulled, or such
Indebtedness shall not have been discharged, within a period of 30 days after
there shall have been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of such series, a written notice
specifying such event of default and requiring the Company to cause such
acceleration to be rescinded or annulled or to cause such Indebtedness to be
discharged and stating that such notice is a "Notice of Default" hereunder; or
(5) the Company or any Subsidiary shall fail within 60
days to pay, bond or otherwise discharge any judgment, court order or uninsured
monetary damage award in excess of $25,000,000 aggregate principal amount,
which is not stayed on appeal or is not otherwise being appropriately contested
in good faith; or
(6) the entry by a court having competent jurisdiction of:
(a) a decree or order for relief in respect of the
Company or any Subsidiary in an involuntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law
and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
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(b) a decree or order adjudging the Company or any
Subsidiary to be insolvent, or approving a petition seeking
reorganization, arrangement, adjustment or composition of the Company
or any Subsidiary and such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or
(c) a final and non-appealable order appointing a
custodian, receiver, liquidator, assignee, trustee or other similar
official of the Company or any Subsidiary or of any substantial part
of the property of the Company or any Subsidiary, as the case may be,
or ordering the winding up or liquidation of the affairs of the
Company or any Subsidiary; or
(7) the commencement by the Company or any Subsidiary of
a voluntary proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or of a voluntary proceeding seeking to be
adjudicated insolvent or the consent by the Company or any Subsidiary to the
entry of a decree or order for relief in an involuntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any insolvency proceedings against it, or the filing by the
Company or any Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable law, or the consent by the
Company or any Subsidiary to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee
or similar official of the Company or any Subsidiary or any substantial part of
the property of the Company or any Subsidiary or the making by the Company or
any Subsidiary of an assignment for the benefit of creditors, or the taking of
corporate action by the Company or any Subsidiary in furtherance of any such
action; or
(8) any other Event of Default provided in or pursuant to
this Indenture with respect to Securities of such series.
Section 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Securities of any
series at the time Outstanding (other than an Event of Default specified in
clause (6) or (7) of Section 501) occurs and is continuing, then the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of such series may declare the principal of all the Securities of
such series, or such lesser amount as may be provided for in the Securities of
such series, 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 or such lesser amount shall become immediately due
and payable.
If an Event of Default specified in clause (6) or (7) of
Section 501 occurs, all unpaid principal of and accrued interest on the
Outstanding Securities of that series (or such lesser amount as may be provided
for in the Securities of such series) shall ipso facto become
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and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder of any Security of that series.
At any time after Securities of any series have been
accelerated 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 not less than a majority in principal amount of the Outstanding
Securities of such series, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a
sum of money sufficient to pay
(a) all overdue installments of any interest on and
Additional Amounts with respect to all Securities of such series and
any Coupon appertaining thereto,
(b) the principal of and any premium on any Securities of
such series which have become due otherwise than by such declaration
of acceleration and interest thereon and any Additional Amounts with
respect thereto at the rate or rates borne by or provided for in such
Securities,
(c) to the extent that payment of such interest or
Additional Amounts is lawful, interest upon overdue installments of
any interest and Additional Amounts at the rate or rates borne by or
provided for 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 all other amounts due the
Trustee under Section 606; and
(2) all Events of Default with respect to Securities of
such series, other than the non-payment of the principal of, any premium and
interest on, and any Additional Amounts with respect to Securities of such
series which shall have become due solely by such declaration of acceleration,
shall have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(1) there is a failure to pay any installment of interest
on or any Additional Amounts with respect to any Security or any Coupon
appertaining thereto when such interest or Additional Amounts shall have become
due and payable and such default continues for a period of 30 days, or
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(2) there is a failure to pay the principal of or any
premium on any Security at its Maturity,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest and Additional Amounts
at the rate or rates borne by or provided for in such Securities, and, in
addition thereto, such further amount of money as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
all other amounts due to the Trustee under Section 606.
If the Company fails to pay the money it is required to pay
the Trustee pursuant to the preceding paragraph forthwith upon the demand of
the Trustee, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the money so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Securities
and any Coupons appertaining thereto and collect the monies 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 and any Coupons appertaining thereto,
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 and any Coupons appertaining thereto 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 such Securities or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of any overdue principal, premium, interest or
Additional Amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(1) to file and prove a claim for the whole amount, or
such lesser amount as may be provided for in the Securities of such
series, of the principal and any premium,
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interest and Additional Amounts owing and unpaid in respect of the
Securities and any Coupons appertaining thereto and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents or counsel) and of the Holders of Securities or any Coupons
allowed in such judicial proceeding, and
(2) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
of a Security or any Coupon any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or Coupons or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or any Coupon in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors'
committee or other similar committee.
Section 505. Trustee May Enforce Claims without Possession
of Securities or Coupons.
All rights of action and claims under this Indenture or any of
the Securities or Coupons may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or Coupons or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of a
Security or Coupon in respect of which such judgment has been recovered.
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Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
or any premium, interest or Additional Amounts, upon presentation of the
Securities or Coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid
upon the Securities and any Coupons for principal and any premium,
interest and Additional Amounts 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 aggregate amounts due and
payable on such Securities and Coupons for principal and any premium,
interest and Additional Amounts, respectively;
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
Section 507. Limitations on Suits.
No Holder of any Security of any series or any Coupons
appertaining thereto shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of such series;
(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities of such series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of
such series;
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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 or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all such Holders.
Section 508. Unconditional Right of Holders to Receive
Principal and any Premium, Interest and
Additional Amounts.
Notwithstanding any other provision in this Indenture, the
Holder of any Security or Coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of, any premium and (subject
to Sections 305 and 307) interest on, and any Additional Amounts with respect
to such Security or payment of such Coupon, as the case may be, on the
respective Stated Maturity or Maturities therefor specified in such Security or
Coupon (or, in the case of redemption, on the Redemption Date or, in the case
of repayment at the option of such Holder if provided in or pursuant to this
Indenture, on the date such repayment is due, or in the case of a Change in
Control, or as to any Change in Control Purchase Notice given timely, on the
Change in Control Purchase Date) and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or a Coupon has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case the Company, the Trustee and each such Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or Coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to each and every Holder of a Security or a Coupon
is intended to be exclusive of any other right or remedy, and every right and
remedy, to the extent permitted by law, shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not, to the extent permitted by law,
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
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Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security or Coupon to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Trustee or to any Holder of a Security or a
Coupon may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by such Holder, as the case may be.
Section 512. Control by Holders of Securities.
Subject to Section 601(5), the Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series and any Coupons
appertaining thereto, provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture or with the Securities of any series,
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the
rights of the other Holders of Securities of such series not joining
in such action.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past or prospective default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of, any premium or
interest on, or any Additional Amounts with respect to, any Security
of such series or any Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Security of such series affected.
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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 514. Waiver of Stay or Extension Laws.
The Company covenants that (to the extent that it may lawfully
do so) it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company expressly
waives (to the extent that it may lawfully do so) all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
Section 515. 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 any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of any undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 515 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any) or
interest, if any, on or Additional Amounts, if any, with respect to any
Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date, in
the case of repayment, on or after the date for repayment and, in the case of
Change of Control, on or after the date for payment of the Change of Control
Purchase Price).
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ARTICLE SIX
THE TRUSTEE
Section 601. Certain Rights of Trustee.
Subject to Sections 315(a) through 315(d) of the Trust
Indenture Act:
(1) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon or other paper or document
reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or a
Company Order (in each case, other than delivery of any Security,
together with any Coupons appertaining thereto, to the Trustee for
authentication and delivery pursuant to Section 303 which shall be
sufficiently evidenced as provided therein) and any resolution of the
Board of Directors may be sufficiently evidenced by a Board
Resolution;
(3) 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 shall be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers' Certificate;
(4) 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;
(5) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by or pursuant to this
Indenture at the request or direction of any of the Holders of
Securities of any series or any Coupons appertaining thereto 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;
(6) 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, coupon or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or
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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, during business hours
and upon reasonable notice, the books, records and premises of the
Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(8) the Trustee shall not be charged with knowledge of
any default (as defined in Section 602) or Event of Default with
respect to the Securities of any series for which it is acting as
Trustee unless either (1) a Responsible Officer of the Trustee
assigned to the Corporate Trust Department of the Trustee (or any
successor division or department of the Trustee) shall have actual
knowledge of such default or Event of Default or (2) written notice of
such default or Event of Default shall have been given to the Trustee
by the Company or any other obligor on such Securities or by any
holder of such Securities; and
(9) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
Section 602. Notice of Defaults.
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 entitled to receive reports
pursuant to Section 703(3), 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, if any, on, or Additional Amounts with
respect to, any Security 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 and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
best interest of the Holders of Securities and Coupons of such series. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
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Section 603. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificate of authentication, and in any Coupons shall be taken
as the statements of the Company and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or the Coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
Section 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other Person that may be an agent of the Trustee or
the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities or Coupons and, subject to Sections 310(b) and 311 of the
Trust Indenture Act, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other Person.
Section 605. Money Held in Trust.
Except as provided in Section 403 and Section 1003, money held
by the Trustee in trust hereunder need not be segregated from other funds
except to the extent required by law and shall be held uninvested. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
Section 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel),
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except any such expense, disbursement or advance as may be
attributable to the Trustee's negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to
hold them harmless against, any loss, liability or expense incurred
without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending
themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities of any series upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of,
and premium or interest on or any Additional Amounts with respect to particular
Securities or any Coupons appertaining thereto.
Any compensation or expense incurred by the Trustee after a
default specified by Section 501 is intended to constitute an expense of
administration under any then applicable bankruptcy or insolvency law.
"Trustee" for purposes of this Section 606 shall include any predecessor
Trustee but the negligence or bad faith of any Trustee shall not affect the
rights of any other Trustee under this Section 606.
The Company's obligations under this Section 606 and any lien
hereunder shall survive the resignation or removal of any Trustee, the
discharge of the Company's obligations pursuant to Article Four of this
Indenture and the termination of this Indenture.
Section 607. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a
Corporation, organized and doing business under the laws of the United States
of America, any state thereof or the District of Columbia, eligible under
Section 310(a)(1) of the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has a combined
capital and surplus (computed in accordance with Section 310(a)(2) of the Trust
Indenture Act) of at least $50,000,000 subject to supervision or examination by
Federal or state authority. 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 608. Resignation and Removal; Appointment of
Successor.
(1) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee pursuant
to Section 609.
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(2) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 609 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 such series.
(3) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations
imposed upon it under Section 310(b) of the Trust Indenture Act with
respect to Securities of any series after written request therefor by
the Company or any Holder of a Security of such series who has been a
bona fide Holder of a Security of such series for at least six months,
or
(b) the Trustee shall cease to be eligible under Section
607 and shall fail to resign after written request therefor by the
Company or any such Holder, or
(c) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities of such series and the
appointment of a successor Trustee or Trustees.
(5) 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 or pursuant to 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
609. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the
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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 609, 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 of Securities and
accepted appointment in the manner required by Section 609, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(6) 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 the Holders of Registered Securities, if any, of such series as
their names and addresses appear in the Security Register and, if Securities of
such series are issued as Bearer Securities, by publishing notice of such event
once in an Authorized Newspaper in each Place of Payment located outside the
United States. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
Section 609. Acceptance of Appointment by Successor.
(1) Upon the appointment hereunder of any successor
Trustee with respect to all Securities, such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties hereunder of the retiring Trustee;
but, on the request of the Company or such successor Trustee, such retiring
Trustee, upon payment of its charges, shall execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and, subject to Section 1003, shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(2) Upon the appointment hereunder of any successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and such successor Trustee 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, such
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
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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, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any notice given to, or received by, or any
act or failure to act on the part of any other Trustee hereunder, and, upon the
execution and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates other than as hereinafter expressly set forth, 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
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 such
successor Trustee, such retiring Trustee, upon payment of its charges with
respect to the Securities of that or those series to which the appointment of
such successor relates and subject to Section 1003 shall duly assign, transfer
and deliver to such successor Trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, subject to its claim, if any,
provided for in Section 606.
(3) Upon request of any Person appointed hereunder as a
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 (1) or (2) of this
Section, as the case may be.
(4) No Person shall accept its appointment hereunder as a
successor Trustee unless at the time of such acceptance such successor Person
shall be qualified and eligible under this Article.
Section 610. Merger, Conversion, Consolidation or
Succession to Business.
Any Corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any Corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated but not
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delivered by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
Section 611. Appointment of Authenticating Agent.
The Trustee may appoint one or more Authenticating Agents
acceptable to the Company with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of that or those series issued upon original issue, exchange,
registration of transfer, partial redemption or partial repayment or pursuant
to Section 306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company
and, except as provided in or pursuant to this Indenture, shall at all times be
a corporation that would be permitted by the Trust Indenture Act to act as
trustee under an indenture qualified under the Trust Indenture Act, is
authorized under applicable law and by its charter to act as an Authenticating
Agent and has a combined capital and surplus (computed in accordance with
Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any Corporation succeeding to all or
substantially all of the corporate agency or corporate trust business of an
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, provided such Corporation shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written
notice of such appointment by first-class mail, postage prepaid, to all Holders
of Registered Securities, if any, of the series with respect
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to which such Authenticating Agent shall serve, as their names and addresses
appear in the Security Register, and (ii) if Securities of the series are
issued as Bearer Securities, publish notice of such appointment at least once
in an Authorized Newspaper in the place where such successor Authenticating
Agent has its principal office if such office is located outside the United
States. Any successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay each Authenticating Agent from time
to time reasonable compensation for its services under this Section. If the
Trustee makes such payments, it shall be entitled to be reimbursed for such
payments, subject to the provisions of Section 606.
The provisions of Sections 308, 603 and 604 shall be
applicable to each Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or
more series of Securities pursuant to this Section, the Securities of such
series may have endorsed thereon, in addition to or in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication in
substantially the following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
CHEMICAL BANK,
As Trustee
By_____________________________
As Authenticating Agent
By_____________________________
Authorized Officer
If all of the Securities of any series may not be originally
issued at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested in writing (which writing need
not be accompanied by or contained in an Officers' Certificate by the Company),
shall appoint in accordance with this Section an Authenticating Agent having an
office in a Place of Payment designated by the Company with respect to such
series of Securities.
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act,
the Company shall furnish or cause to be furnished to the Trustee
(1) semi-annually with respect to Securities of each
series not later than March 15 and September 15 of the year or upon
such other dates as are set forth in or pursuant to the Board
Resolution, Officer's Certificate or indenture supplemental hereto
authorizing such series, a list, in each case in such form as the
Trustee may reasonably require, of the names and addresses of Holders
as of the applicable date, and
(2) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished,
provided, however, that so long as the Trustee is the Security Registrar no
such list shall be required to be furnished.
Section 702. Preservation of Information; Communications
to Holders.
The Trustee shall comply with the obligations imposed upon it
pursuant to Section 312 of the Trust Indenture Act.
Every Holder of Securities or Coupons, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company, the Trustee, any Paying Agent or any Security Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Securities in accordance with Section 312(c) of
the Trust Indenture Act, regardless of the source from which such information
was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.
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Section 703. Reports by Trustee.
(1) Within 60 days after September 15 of each year
commencing with the first September 15 following the first issuance of
Securities pursuant to Section 301, if required by Section 313(a) of the Trust
Indenture Act, the Trustee shall transmit, pursuant to Section 313(c) of the
Trust Indenture Act, a brief report dated as of such September 15 with respect
to any of the events specified in said Section 313(a) which may have occurred
since the later of the immediately preceding September 15 and the date of this
Indenture.
(2) The Trustee shall transmit the reports required by
Section 313(a) of the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted
in the manner and to the Persons required by Sections 313(c) and 313(d) of the
Trust Indenture Act.
Section 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture
Act, shall:
(1) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall file
with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934 in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Company, with the conditions and covenants of this Indenture
as may be required from time to time by such rules and regulations; and
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(3) transmit within 30 days after the filing thereof with
the Trustee, in the manner and to the extent provided in Section 313(c) of the
Trust Indenture Act, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801. Company May Consolidate, Etc., Only on
Certain Terms.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or
into any other Person or Persons (whether or not affiliated with the Company),
or successive consolidations or mergers in which the Company or its successor
or successors shall be a party or parties, or shall prevent any conveyance,
transfer or lease of the property of the Company as an entirety or
substantially as an entirety, to any other Person (whether or not affiliated
with the Company); provided, however, that:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person, the entity formed by
such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and assets
of the Company as an entirety or substantially as an entirety shall be a
Corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall expressly
assume, by an indenture (or indentures, if at such time there is more than one
Trustee) supplemental hereto, executed by the successor Person and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of, any premium and interest on and any Additional Amounts
with respect to all the Securities and the performance of every obligation in
this Indenture and the Outstanding Securities on the part of the Company to be
performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default or event which, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing, including
any default pursuant to the Holder's Change of Control Purchase Option set
forth in Article Fifteen; and
(3) either the Company or the successor Person shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
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Section 802. Successor Person Substituted for Company.
Upon any consolidation by the Company with or merger of the
Company into any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
and thereafter, except in the case of a lease, the predecessor Person shall be
released from all obligations and covenants under this Indenture, the
Securities and the Coupons.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of
Holders.
Without the consent of any Holders of Securities or Coupons,
the Company (when authorized by or pursuant to a Board Resolution) and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company contained 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 (as shall be
specified in such supplemental indenture or indentures) or to surrender any
right or power herein conferred upon the Company; or
(3) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to principal,
to change or eliminate any restrictions on the payment of principal of, any
premium or interest on or any Additional Amounts with respect to Securities, to
permit Bearer Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be exchanged for Bearer Securities of other
authorized denominations or to permit or facilitate the issuance of Securities
in uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Securities of any series or any Coupons
appertaining thereto in any material respect; or
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(4) to establish the form or terms of Securities of any
series and any Coupons appertaining thereto as permitted by Sections 201 and
301; or
(5) 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 609; or
(6) to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not adversely affect the
interests of the Holders of Securities of any series then Outstanding or any
Coupons appertaining thereto in any material respect; or
(7) to add to, delete from or revise the conditions,
limitations and restrictions on the authorized amount, terms or purposes of
issue, authentication and delivery of Securities, as herein set forth; or
(8) to add any additional Events of Default with respect
to all or any series of Securities (as shall be specified in such supplemental
indenture); or
(9) to supplement any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article Four, provided that
any such action shall not adversely affect the interests of any Holder of a
Security of such series and any Coupons appertaining thereto or any other
Security or Coupon in any material respect; or
(10) to secure the Securities pursuant to Section 1005,
1006 or otherwise; or
(11) to make provisions with respect to conversion or
exchange rights of Holders of Securities of any series; or
(12) to amend or supplement any provision contained herein
or in any supplemental indenture, provided that no such amendment or supplement
shall materially adversely affect the interests of the Holders of any
Securities then Outstanding.
Section 902. Supplemental Indentures with Consent of
Holders.
With the consent of the Holders of not less than 66-2/3% in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company (when authorized by or pursuant to a Company's Board
Resolution), and the Trustee may enter into an indenture or
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indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture or of the Securities of such series; provided,
however, that no such supplemental indenture, without the consent of the Holder
of each Outstanding Security affected thereby, shall
(1) change the Stated Maturity of the principal of, or
any premium or installment of interest on or any Additional Amounts with
respect to, any Security, or reduce the principal amount thereof or the rate
(or modify the calculation of such rate) of interest thereon or any Additional
Amounts with respect thereto, or any premium payable upon the redemption
thereof or otherwise, or change the obligation of the Company to pay Additional
Amounts pursuant to Section 1004 (except as contemplated by Section 801(1) and
permitted by Section 901(1)), or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the amount thereof provable in bankruptcy pursuant to Section 504, change the
redemption provisions or adversely affect the right of repayment at the option
of any Holder as contemplated by Article Thirteen, or change the Place of
Payment, Currency in which the principal of, any premium or interest on, or any
Additional Amounts with respect to any Security is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date or, in the case of repayment at the option of the Holder, on or
after the date for repayment or in the case of change in control, after the
Change in Control Purchase Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided for in
this Indenture, or reduce the requirements of Section 1504 for quorum or
voting, or
(3) modify any of the provisions of this Section, Section
513 or Section 1008, 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.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which shall have been included
expressly and 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 of Securities
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 903. Execution of Supplemental Indentures.
As a condition to executing, or accepting the additional
trusts created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trust created by this Indenture, the Trustee shall
be entitled to receive (in addition to those documents required by Section
102), and (subject to Section 315 of the Trust Indenture Act) 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 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of a Security theretofore or thereafter authenticated and
delivered hereunder and of any Coupon appertaining thereto shall be bound
thereby.
Section 905. 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.
Section 906. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
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ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, any Premium, Interest
and Additional Amounts.
The Company covenants and agrees for the benefit of the
Holders of the Securities of each series that it will duly and punctually pay
the principal of, any premium and interest on and any Additional Amounts with
respect to the Securities of such series in accordance with the terms thereof,
any Coupons appertaining thereto and this Indenture. Any interest due on any
Bearer Security on or before the Maturity thereof, and any Additional Amounts
payable with respect to such interest, shall be payable only upon presentation
and surrender of the Coupons appertaining thereto for such interest as they
severally mature.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment for any
series of Securities an Office or Agency where Securities of such series (but
not Bearer Securities, except as otherwise provided below, unless such Place of
Payment is located outside the United States) may be presented or surrendered
for payment, where Securities of such series may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Company in respect of the Securities of such series relating thereto and
this Indenture may be served. If Securities of a series are issuable as Bearer
Securities, the Company shall maintain, subject to any laws or regulations
applicable thereto, an Office or Agency in a Place of Payment for such series
which is located outside the United States where Securities of such series and
any Coupons appertaining thereto may be presented and surrendered for payment;
provided, however, that if the Securities of such series are listed on The
Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Company shall
maintain a Paying Agent in London, Luxembourg or any other required city
located outside the United States, as the case may be, so long as the
Securities of such series are listed on such exchange. 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,
except that Bearer Securities of such series and any Coupons appertaining
thereto may be presented and surrendered for payment at the place specified for
the purpose with respect to such Securities as provided in or pursuant to this
Indenture, and the Company hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.
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Except as otherwise provided in or pursuant to this Indenture,
no payment of principal, premium, interest or Additional Amounts with respect
to Bearer Securities shall be made at any Office or Agency in the United States
or by check mailed to any address in the United States or by transfer to an
account maintained with a bank located in the United States; provided, however,
if amounts owing with respect to any Bearer Securities shall be payable in
Dollars, payment of principal of, any premium or interest on and any Additional
Amounts with respect to any such Security may be made at the Corporate Trust
Office of the Trustee or any Office or Agency designated by the Company in the
Borough of Manhattan, The City of New York, if (but only if) payment of the
full amount of such principal, premium, interest or Additional Amounts at all
offices outside the United States maintained for such purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may also from time to time designate one or more
other Offices or Agencies where the Securities 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 shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other Office or Agency. Unless otherwise provided in or pursuant
to this Indenture, the Company hereby designates as the Place of Payment for
each series of Securities the Borough of Manhattan, The City of New York, and
initially appoints the Corporate Trust Office of the Trustee as the Office or
Agency of the Company in the Borough of Manhattan, The City of New York for
such purpose. The Company may subsequently appoint a different Office or
Agency in the Borough of Manhattan, The City of New York for the Securities of
any series.
Unless otherwise specified with respect to any Securities
pursuant to Section 301, if and so long as the Securities of any series (i) are
denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency,
or so long as it is required under any other provision of this Indenture, then
the Company will maintain with respect to each such series of Securities, or as
so required, at least one exchange rate agent.
Section 1003. Money for Securities Payments to Be Held in
Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it shall, on or before each due date
of the principal of, any premium or interest on or Additional Amounts with
respect to any of the Securities of such series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum in the Currency or
Currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
sufficient to pay the principal or any premium, interest or Additional Amounts
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.
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Whenever the Company shall have one or more Paying Agents for
any series of Securities, it shall, on or prior to each due date of the
principal of, any premium or interest on or any Additional Amounts with respect
to any Securities of such series, deposit with any Paying Agent a sum (in the
Currency or Currencies described in the preceding paragraph) sufficient to pay
the principal or any premium, interest or Additional Amounts so becoming due,
such sum to be held in trust for the benefit of the Persons entitled thereto,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company shall cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the
principal of, any premium or interest on or any Additional Amounts with respect
to Securities of such 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 provided in or pursuant to this Indenture;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Securities of such series) in the making of any
payment of principal, any premium or interest on or any Additional Amounts with
respect to the Securities of such series; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same terms 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 sums.
Except as otherwise provided herein or pursuant hereto, 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, any premium or interest
on or any Additional Amounts with respect to any Security of any series or any
Coupon appertaining thereto and remaining unclaimed for two years after such
principal or any such premium or interest or any such Additional Amounts shall
have become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security or any Coupon appertaining thereto 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
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to such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper in each Place of
Payment for such series or to be mailed to Holders of Registered Securities of
such series, or both, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication or mailing nor shall it be later than two years after such
principal and any premium or interest or Additional Amounts shall have become
due and payable, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 1004. Additional Amounts.
If any Securities of a series provide for the payment of
Additional Amounts, the Company agrees to pay to the Holder of any such
Security or any Coupon appertaining thereto Additional Amounts as provided in
or pursuant to this Indenture or such Securities. Whenever in this Indenture
there is mentioned, in any context, the payment of the principal of or any
premium or interest on, or in respect of, any Security of any series or any
Coupon or the net proceeds received on the sale or exchange of any Security of
any series, such mention shall be deemed to include mention of the payment of
Additional Amounts provided by the terms of such series established hereby or
pursuant hereto to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to such terms, and express
mention of the payment of Additional Amounts (if applicable) in any provision
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture
or the Securities of the applicable series, if the Securities of a series
provide for the payment of Additional Amounts, at least 10 days prior to the
first Interest Payment Date with respect to such series of Securities (or if
the Securities of such series shall not bear interest prior to Maturity, the
first day on which a payment of principal is made), and at least 10 days prior
to each date of payment of principal or interest if there has been any change
with respect to the matters set forth in the below-mentioned Officers'
Certificate, the Company shall furnish to the Trustee and the principal Paying
Agent or Paying Agents, if other than the Trustee, an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and premium, if any, or interest on the Securities of
such series shall be made to Holders of Securities of such series or the
Coupons appertaining thereto who are United States Aliens without withholding
for or on account of any tax, assessment or other governmental charge described
in the Securities of such series. If any such withholding shall be required,
then such Officers' Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Securities or
Coupons, and the Company agrees to pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
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negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section.
Section 1005. Limitation on Liens.
Nothing in this Indenture or in the Securities shall in any
way restrict or prevent the Company or any Subsidiary from issuing, assuming,
guaranteeing or otherwise incurring any indebtedness; provided, however, that
neither the Company nor any Subsidiary shall issue, assume or guaranty any
notes, bonds, debentures or other similar evidences of indebtedness for money
borrowed secured by any Lien on any asset now owned or hereafter acquired by it
without making effective provision whereby any and all Securities then or
thereafter outstanding shall be secured by a Lien equally and ratably with any
and all other obligations thereby secured, so long as any such obligations
shall be so secured. Notwithstanding the foregoing, the Company or any
Subsidiary, without so securing the Securities, may issue, assume or guaranty
indebtedness secured by the following Liens:
(a) Liens existing on the date of this Indenture or provided
for under the terms of agreements existing on the date hereof;
(b) Liens on property to secure (i) all or any portion of the
cost of exploration, production, gathering, processing, marketing,
drilling or development of such property, (ii) all or any portion of
the cost of acquiring, constructing, altering, improving or repairing
any property or assets, real or personal, or improvements used in
connection with such property, and (iii) indebtedness incurred by the
Company or any Subsidiary to provide funds for the activities set
forth in clauses (i) and (ii) above;
(c) Liens which secure indebtedness owing by a Subsidiary to
the Company, or to one or more other Subsidiaries, or to the Company
and one or more other Subsidiaries;
(d) Liens on the property of any person existing at the time
such person becomes a Subsidiary;
(e) Liens on any property securing (i) indebtedness incurred
in connection with the construction, installation or financing of
pollution control or abatement facilities or other forms of industrial
revenue bond financing, (ii) indebtedness issued or guaranteed by the
United States, any state or any department, agency or instrumentality
of either or (iii) indebtedness issued or guaranteed by (Y) a foreign
government, any state or any department, agency or instrumentality of
either or (Z) an international finance agency or any division or
department thereof, including the World Bank, the International
Finance Corp. and the Multilateral Investment Guarantee Agency;
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(f) any Lien extending, renewing or replacing (or
successive extensions, renewals or replacements of) any Lien of the
type set forth in paragraph (a) through (e) above, which Lien exists
on the date of this Indenture;
(g) any Ordinary Course Lien (as defined below) arising,
and only so long as continuing, in the ordinary course of the
Company's business; or
(h) Liens which secure Limited Recourse Indebtedness.
Notwithstanding the foregoing, the Company and any one or more
Subsidiaries may issue, assume or guaranty the following indebtedness secured
by Liens on assets without regard to indebtedness in any aggregate principal
amount which, together with the aggregate outstanding principal amount of all
other indebtedness of the Company and its Subsidiaries so secured (excluding
indebtedness secured by the permitted Liens described above), and the aggregate
amount of Sale/Leaseback Transaction obligations which would otherwise be
subject to the provisions of Section 1006, does not at the time such
indebtedness is incurred exceed 10% of the Company's Consolidated Net Worth as
shown on the most recent audited consolidated balance sheet of the Company and
its Subsidiaries.
Notwithstanding the foregoing, nothing in this Section 1005
shall be deemed to prohibit or otherwise limit the following types of
transactions:
(1)(i) the sale, granting of Liens with respect to or other
transfer of crude oil, natural gas or other petroleum hydrocarbons in
place, for a period of time until, or in an amount such that, the
transferee will realize therefrom a specified amount (however
determined) of money or such crude oil, natural gas or other petroleum
hydrocarbons, or (ii) the sale or other transfer of any other interest
in property of the character commonly referred to as a production
payment, overriding royalty, forward sales or similar interest; and
(2) the granting of Liens required by any contract or statute
in order to permit the Company or a Subsidiary to perform any contract
or subcontract made by it with or at the request of the United States
government or any foreign government or international finance agency,
any state or any department thereof, or any agency or instrumentality
thereof, or to secure partial, progress, advance or other payments to
the Company or any Subsidiary by any such entity pursuant to the
provisions of any contract or statute.
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, security interest or encumbrances of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law. The Company or any Subsidiary shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset. The right of set-off, whether by
operation of law or by contract, does not
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constitute a Lien unless there is a related obligation to maintain a deposit of
cash or other assets in respect of which such right of set-off may be
exercised.
"Ordinary Course Lien" shall mean:
(a) Liens for taxes, assessments or governmental changes
or levies on the property of the Company or any Subsidiary if the same
shall not at the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with
generally accepted accounting principles shall have been set aside on
the books of the Company;
(b) Liens imposed by law, such as carriers',
warehousemen's, landlords' and mechanics' liens and other similar
liens arising in the ordinary course of business which secure
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with generally accepted accounting
principles shall have been set aside on the books of the Company;
(c) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation;
(d) Utility easements, building restrictions and such
other encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Company
or its Subsidiaries, as the case may be;
(e) Liens arising under operating agreements or similar
agreements in respect of obligations which are not yet due or which
are being contested in good faith by appropriate proceedings;
(f) Liens reserved in oil, gas and/or mineral leases for
bonus or rental payments and for compliance with the terms of such
leases;
(g) Liens pursuant to partnership agreements, oil, gas
and/or mineral leases, farm-out-agreements, division orders, contracts
for the sale, purchase, exchange, or processing of oil, gas and/or
other hydrocarbons, unitization and pooling declarations and
agreements, operating agreements, development agreements, area of
mutual interest agreements, forward sale agreements, oil and gas
delivery obligations, and other agreements which are customary in the
oil, gas and other mineral exploration, development and production
business and in the business of processing of gas and gas condensate
production of the extraction of products therefrom;
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(h) Liens on personal property (excluding the capital
stock or indebtedness of any Subsidiary) securing indebtedness
maturing not more than one year from the date of its creation; and
(i) Liens relating to a judgment or other court-ordered
award or settlement as to which the Company has not exhausted its
appellate rights.
"Consolidated Net Worth" means the consolidated stockholders'
equity of the Company, determined in accordance with generally accepted
accounting principles.
Section 1006. Limitation on Sale/Leaseback Transactions.
Neither the Company nor any Subsidiary will enter into any
Sale/Leaseback Transaction with any Person (other than the Company or a
Subsidiary) providing for a term of more than three years unless:
(a) the Company or such Subsidiary would be permitted,
pursuant to the terms of Section 1005, to incur indebtedness in an
aggregate principal amount equal to or exceeding the value of the
Sale/Leaseback Transaction secured by a Lien on the property subject
to such Sale/Leaseback Transaction;
(b) since the date of this Indenture and within a period
commencing six months prior to the Sale/Leaseback Transaction and
ending six months after the consummation thereof, the Company or such
Subsidiary expends for any property (including amounts expended for
the acquisition, exploration, drilling or development thereof, or for
additions, alterations, improvements or repairs thereto) an amount up
to the net proceeds of such Sale/Leaseback Transaction, and the
Company elects to designate such amount as a credit against such
Sale/Leaseback Transaction (with any amount of such net proceeds not
being so designated to be applied as set forth in paragraph (c)
below); or
(c) the Company, during or immediately after the expiration of
the 12 month period following the consummation of the Sale/Leaseback
Transaction, applies to the voluntary retirement, redemption or
defeasance of the Securities and its other Senior Indebtedness an
amount equal to the greater of (i) the net proceeds of the
Sale/Leaseback Transaction and (ii) the fair value, in the opinion of
the Board of Directors of the Company, of the subject property of the
Sale/Leaseback Transaction at the time of such transaction (adjusted,
in either case, to reflect the remaining term of the lease and any
amount applied pursuant to paragraph (b) above), less an amount equal
to the principal amount of other Senior Indebtedness voluntarily
retired by the Company during such 12-month period.
"Sale/Leaseback Transaction" means any arrangement providing for the
leasing to the Company or any Subsidiary by any Person (other than the Company
or a Subsidiary) of any
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property which has been, or is to be, sold or transferred by the Company or
such Subsidiary to such Person or to any Person (other than the Company or a
Subsidiary) to which funds have been or are to be advanced by such Person on
the security of the leased property, except with respect to any lease that
secures or relates to obligations issued by or on behalf of (a) the United
States, any state or any department, agency or instrumentality of either, (b) a
foreign government, any state or any department agency or instrumentality of
either, or (c) an international finance agency or any division or department
thereof, including the World Bank, the International Finance Corp. and the
Multilateral Investment Guarantee Agency, in connection with the financing of
the cost of construction, improvement or equipping of such property.
Section 1007. Corporate Existence.
Subject to Articles Eight and Fifteen, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and that of each Subsidiary and their
respective rights (charter and statutory) and franchises; provided, however,
that the foregoing shall not obligate the Company or any Subsidiary to preserve
any such right or franchise if the Company or any Subsidiary shall determine
that the preservation thereof is no longer desirable in the conduct of its
business or the business of such Subsidiary.
Section 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Sections 1005, 1006 or 1007 with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series, by Act of such Holders, either shall waive such
compliance in such instance or generally shall have waived 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 1009. Company Statement as to Compliance; Notice of
Certain Defaults.
(1) The Company shall deliver to the Trustee, within 120
days after the end of each fiscal year, a written statement (which need not be
contained in or accompanied by an Officers' Certificate) signed by the
principal executive officer, the principal financial officer or the principal
accounting officer of the Company, stating that
(a) a review of the activities of the Company during such
year and of its performance under this Indenture has been made under
his or her supervision, and
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(b) to the best of his or her knowledge, based on such
review, (a) the Company has complied with all the conditions and
covenants imposed on it under this Indenture throughout such year, or,
if there has been a default in the fulfillment of any such condition
or covenant, specifying each such default known to him or her and the
nature and status thereof, and (b) no event has occurred and is
continuing which is, or after notice or lapse of time or both would
become, an Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.
(2) The Company shall deliver to the Trustee, within five
days after the occurrence thereof, written notice of any Event of Default or
any event which after notice or lapse of time or both would become an Event of
Default.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Redemption of Securities of any series at the option of the
Company as permitted or required by the terms of such Securities shall be made
in accordance with the terms of such Securities and (except as otherwise
provided herein or pursuant hereto) this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution or an Officer's Certificate.
In case of any redemption at the election of the Company of (a) less than all
of the Securities of any series or (b) all of the Securities of any series,
with the same issue date, interest rate or formula, Stated Maturity and other
terms, the Company shall, at least 60 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.
Section 1103. Selection by Trustee of Securities to be
Redeemed.
If less than all of the Securities of any series with the same
issue date, interest rate or formula, Stated Maturity and other terms are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection
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for redemption of portions of the principal amount of Registered Securities of
such series; provided, however, that no such partial redemption shall reduce
the portion of the principal amount of a Registered Security of such series not
redeemed to less than the minimum denomination for a Security of such series
established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) 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 of such Securities which has been or is
to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 106, not less than 30 nor more than 60 days prior to the Redemption
Date, unless a shorter period is specified in the Securities to be redeemed, to
the Holders of Securities to be redeemed. Failure to give notice by mailing in
the manner herein provided to the Holder of any Registered Securities
designated for redemption as a whole or in part, or any defect in the notice to
any such Holder, shall not affect the validity of the proceedings for the
redemption of any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered
Securities in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial redemption,
the principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only,
the notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder of such Security
will receive, without charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,
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(5) that, on the Redemption Date, the Redemption Price
shall become due and payable upon each such Security or portion thereof to be
redeemed, and, if applicable, that interest thereon shall cease to accrue on
and after said date,
(6) the place or places where such Securities, together
(in the case of Bearer Securities) with all Coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment of
the Redemption Price and any accrued interest and Additional Amounts pertaining
thereto,
(7) that, unless otherwise specified in such notice,
Bearer Securities of any series, if any, surrendered for redemption must be
accompanied by all Coupons maturing subsequent to the date fixed for redemption
or the amount of any such missing Coupon or Coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company, the
Trustee and any Paying Agent is furnished,
(8) if Bearer Securities of any series are to be redeemed
and any Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not subject
to redemption on the Redemption Date pursuant to Section 305 or otherwise, the
last date, as determined by the Company, on which such exchanges may be made,
(9) the CUSIP number or the Euroclear or the Cedel
reference numbers of such Securities, if any (or any other numbers used by a
Depository to identify such Securities).
A notice of redemption mailed as contemplated by Section 106
need not identify particular Registered 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, by the Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit,
with respect to the Securities of any series called for redemption pursuant to
Section 1104, with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the applicable Currency sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date, unless otherwise specified pursuant to Section 301 or in
the Securities of such series) any accrued interest on and Additional Amounts
with respect thereto, all such Securities or portions thereof which are to be
redeemed on that date.
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Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest and the Coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
Coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
any accrued interest and Additional Amounts to the Redemption Date; provided,
however, that, except as otherwise provided in or pursuant to this Indenture or
the Bearer Securities of such series, installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only upon presentation and surrender of Coupons for such interest (at
an Office or Agency located outside the United States except as otherwise
provided in Section 1002), and provided, further, that, except as otherwise
specified in or pursuant to this Indenture or the Registered Securities of such
series, installments of interest on Registered Securities whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the Regular Record Dates therefor according to their terms
and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to the Trustee or any Paying Agent any such missing
Coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that any interest or Additional Amounts represented by
Coupons shall be payable only upon presentation and surrender of those Coupons
at an Office or Agency for such Security located outside of the United States
except as otherwise provided in Section 1002.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium, until
paid, shall bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
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Section 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part
shall be surrendered at any Office or Agency for such Security (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Registered Security or
Securities of the same series, containing identical terms and provisions, of
any authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Security in global form is so surrendered,
the Company shall execute, and the Trustee shall authenticate and deliver to
the U.S. Depository or other Depository for such Security in global form as
shall be specified in the Company Order with respect thereto to the Trustee,
without service charge, a new Security in global form in a denomination equal
to and in exchange for the unredeemed portion of the principal of the Security
in global form so surrendered.
ARTICLE TWELVE
REPAYMENT AT THE OPTION OF HOLDERS
Section 1201. Applicability of Article.
Securities of any series which are repayable at the option of
the Holders thereof before their Stated Maturity shall be repaid in accordance
with the terms of the Securities of such series. The repayment of any principal
amount of Securities pursuant to such option of the Holder to require repayment
of Securities before their Stated Maturity, for purposes of Section 309, shall
not operate as a payment, redemption or satisfaction of the Indebtedness
represented by such Securities unless and until the Company, at its option,
shall deliver or surrender the same to the Trustee with a directive that such
Securities be cancelled. Notwithstanding anything to the contrary contained in
this Section 1201, in connection with any repayment of Securities, the Company
may arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
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ARTICLE THIRTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1301. Applicability of Article.
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same Currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series or pursuant to
this Indenture or the Securities, any amount in respect of any Security
denominated in a Currency other than Dollars shall be treated for any such
action or distribution as that amount of Dollars that could be obtained for
such amount on such reasonable basis of exchange and as of the record date with
respect to Registered Securities of such series (if any) for such action,
determination of rights or distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such action,
determination of rights or distribution) as the Company may specify in a
written notice to the Trustee or, in the absence of such written notice, as the
Trustee may determine.
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1401. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called
at any time and from time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction, notice, consent, waiver or
other Act provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
Section 1402. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders
of Securities of any series for any purpose specified in Section 1401, to be
held at such time and at such place in the Borough of Manhattan, The City of
New York, or, if Securities of such series have been issued in whole or in part
as Bearer Securities, in London or in such place outside the United States as
the Trustee shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
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(2) In case at any time the Company (by or pursuant to a
Board Resolution) or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified
in Section 1401, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed notice of or made the first publication of the notice of such meeting
within 21 days after receipt of such request (whichever shall be required
pursuant to Section 106) or shall not thereafter proceed to cause the meeting
to be held as provided herein, then the Company or the Holders of Securities of
such series in the amount above specified, as the case may be, may determine
the time and the place in the Borough of Manhattan, The City of New York, or,
if Securities of such series are to be issued as Bearer Securities, in London
for such meeting and may call such meeting for such purposes by giving notice
thereof as provided in clause (1) of this Section.
Section 1403. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities
of any series, a Person shall be (1) a Holder of one or more Outstanding
Securities of such series, or (2) a Person appointed by an instrument in
writing as proxy for a Holder or Holders of one or more Outstanding Securities
of such series by such Holder or Holders. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders of Securities of
any series shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 1404. Quorum; Action.
The Persons entitled to vote a majority in principal amount of
the Outstanding Securities of a series shall constitute a quorum for a meeting
of Holders of Securities of such series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of at least 66-2/3% in
principal amount of the Outstanding Securities of a series, the Persons
entitled to vote 66-2/3% in principal amount of the Outstanding Securities of
such series shall constitute a quorum. In the absence of a quorum within 30
minutes after the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for 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 1402(1), 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
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percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any
resolution 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 Outstanding Securities of
that series; provided, however, that, except as limited by the proviso to
Section 902, any resolution with respect to any consent or waiver which this
Indenture expressly provides may be given by the Holders of at least 66-2/3% in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly convened and at which a quorum is present
as aforesaid only by the affirmative vote of the Holders of 66-2/3% in
principal amount of the Outstanding Securities of that series; and provided,
further, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other Act which this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of such
series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section
shall be binding on all the Holders of Securities of such series and the
Coupons appertaining thereto, whether or not such Holders were present or
represented at the meeting.
Section 1405. Determination of Voting Rights; Conduct and
Adjournment of Meetings.
(1) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of such series in regard to
proof of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be proved in
the manner specified in Section 104 or by having the signature of the person
executing the proxy witnessed or guaranteed by any trust company, bank or
banker authorized by Section 104 to certify to the holding of Bearer
Securities. Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine without the
proof specified in Section 104 or other proof.
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(2) 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
1402(2), in which case the Company or the Holders of Securities of the series
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent 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.
(3) At any meeting, each Holder of a Security of such
series or proxy shall be entitled to one vote for each $1,000 principal amount
of Securities of such series held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be
not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(4) Any meeting of Holders of Securities of any series
duly called pursuant to Section 1402 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series represented at the meeting;
and the meeting may be held as so adjourned without further notice.
Section 1406. Counting Votes and Recording Action of
Meetings.
The vote upon any resolution submitted to any meeting of
Holders of Securities of any series shall be by written ballots on which shall
be subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1404. 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.
84
<PAGE> 93
ARTICLE FIFTEEN
PURCHASES OF SECURITIES UPON CHANGE IN CONTROL
Section 1501. Purchase of Securities at Option of the
Holder upon Change in Control.
(1) If on or prior to Maturity, there shall have occurred a
Change in Control (as defined herein), the Securities shall be purchased, at
the option of the Holder thereof, by the Company at the purchase price
specified in the Securities (the "Change in Control Purchase Price"), on the
date that is 35 Business Days after the occurrence of the Change in Control
(the "Change in Control Purchase Date"), subject to satisfaction by or on
behalf of the Holder of the requirements set forth in Section 1501(3).
A "Change in Control" shall be deemed to have occurred at such time as
any of the following events shall occur:
(a) Any person (for purposes of paragraph (a) of this
Section 1501(1) only, the term "person" shall mean a "person" as
defined in or for purposes of Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act of 1934 (as defined herein), or any successor
provision to either of the foregoing, including any "group" acting for
the purposes of acquiring, holding or disposing of securities within
the meaning of Rule 13D-5(b)(1) under the Exchange Act of 1934),
together with its Affiliates and Associates (as defined herein), shall
file or become obligated to file a report under or in response to
Schedule 13D or 14D-1 (or any successor schedule, form or report)
pursuant to the Exchange Act of 1934 disclosing that such person has
become the beneficial owner (as the term "beneficial owner" is defined
in Rule 13d-3 under the Exchange Act of 1934, or any successor
provision) of either (A) 50% or more of the shares of Common Stock
then outstanding or (B) 50% or more of the voting power of the Voting
Stock of the Company then outstanding; provided, however, that for
purposes of paragraph (i) of this Section 1501(a), a person shall not
be deemed the beneficial owner of (1) any securities tendered pursuant
to a tender offer or exchange offer made by or on behalf of such
person, or its Affiliates or Associates, until such tendered
securities are accepted for purchase or exchange thereunder, or (2)
any securities in respect of which beneficial ownership by such person
arises solely as a result of a revocable proxy delivered in response
to a proxy or consent solicitation that is made pursuant to, and in
accordance with, the Exchange Act of 1934 and the applicable rules and
regulations thereunder and is not then reportable on Schedule 13D (or
any successor schedule, form or report) under the Exchange Act of
1934.
(b) There shall be consummated any sale, transfer, lease
or conveyance of all or substantially all of the properties and assets
of the Company to any other Corporation or Corporations or other
person or persons (other than a Subsidiary of the Company).
85
<PAGE> 94
(c) There shall be consummated any consolidation of the
Company with or merger of the Company with or into any other Person
(whether or not affiliated with the Company) in which the Company is
not the sole surviving or continuing corporation or pursuant to which
the shares of Common Stock outstanding immediately prior to the
consummation of such consolidation or merger are converted into cash,
securities or other property, other than a consolidation or merger in
which the holders of shares of Common Stock receive, directly or
indirectly, (A) 75% or more of the common stock of the sole surviving
or continuing Corporation outstanding immediately following the
consummation of such consolidation or merger and (B) securities
representing 75% or more of the combined voting power of the Voting
Stock of the sole surviving or continuing corporation outstanding
immediately following the consummation thereof of such consolidation
or merger.
"Exchange Act of 1934" shall mean the Securities Exchange Act of 1934,
as amended.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act of 1934, as in effect on the date hereof.
(2) Within 15 Business Days after the occurrence of a Change
in Control, the Company shall mail a written notice of Change in Control by
first-class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law, including, without limitation, Rule 13e-4) and
shall cause a copy of such notice to be published at least once in an
Authorized Newspaper located in New York City and, if any Securities are then
listed on any stock exchange located outside the United States, in an
Authorized Newspaper in such city as the stock exchange so requires. The
notice shall include or transmit a form of Change in Control Purchase Notice
(as described below) to be completed by the Holder and shall state:
(a) the events causing a Change in Control and the date of
such Change in Control;
(b) the date by which the Change in Control Purchase Notice
pursuant to this Section 1601 must be given;
(c) the Change in Control Purchase Date;
(d) the Change in Control Purchase Price;
(e) the name and address of the Trustee and the Office or
Agency;
(f) that the Securities must be surrendered to the Trustee or
the Office or Agency to collect payment;
(g) that the Change in Control Purchase Price for any Security
as to which a Change in Control Purchase Notice has been duly given
and not withdrawn will be paid
86
<PAGE> 95
promptly following the later of the Change in Control Purchase Date or
the time of surrender of such Security as described in (f);
(h) the procedures the Holder must follow to exercise rights
under this Section 1501(1) and a brief description of those rights;
and
(i) the procedures for withdrawing a Change in Control
Purchase Notice.
(3) A Holder may exercise its rights specified in Section 1501(1)
upon delivery of a written notice of purchase (a "Change in Control Purchase
Notice") to the Trustee or to the Office or Agency at any time prior to the
close of business of the Change in Control Purchase Date, stating:
(a) the certificate number or numbers of the Security or
Securities which the Holder will deliver to be purchased;
(b) the portion of the principal amount of the Security or
Securities which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and
(c) that such Security or Securities shall be purchased on the
Change in Control Purchase Date pursuant to the terms and conditions specified
in the Securities.
The delivery of the Security, by hand or by registered mail prior to,
on or after the Change in Control Purchase Date (together with all necessary
endorsements), to the Trustee or to the Office or Agency shall be a condition
precedent to the obligation of the Company to pay to the Holder the Change in
Control Purchase Price therefor; provided, however, that such Change in Control
Purchase Price shall be so paid pursuant to this Section 1501 only if the
Security so delivered to the Trustee or such Office or Agency shall conform in
all respects to the description thereof set forth in the related Change in
Control Purchase Notice.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Trustee or to the Office or Agency, the Change in Control Purchase
Notice contemplated by this Section 1501(3) shall have the right to withdraw
such Change in Control Purchase Notice at any time prior to or on the Change in
Control Purchase Date by delivery of a written notice of withdrawal to the
Trustee or to such office or agency in accordance with Section 1502.
Section 1502. Effect of Change in Control Purchase Notice.
Upon receipt by the Company of the Change in Control Purchase
Notice specified in Section 1501(3), the Holder of the Security in respect of
which such Change in Control Purchase Notice was given shall (unless such
Change in Control Purchase Notice is withdrawn as specified in the following
paragraph) thereafter be entitled to receive solely the Change in
87
<PAGE> 96
Control Purchase Price with respect to such Security. Such Change in Control
Purchase Price shall be paid to such Holder promptly following the later of (x)
the Change in Control Purchase Date, as the case may be, with respect to such
Security (provided the conditions in Section 1501(3), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Trustee or to
the Office or Agency by the Holder thereof in the manner required by Section
1501(3), as applicable.
A Change in Control Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Trustee or to
the Office or Agency at any time prior to the close of business on the Change
in Control Purchase Date, specifying:
(1) the certificate number or numbers of the Security or
Securities in respect of which such notice of withdrawal is being
submitted;
(2) the principal amount of the Security or Securities with
respect to which such notice of withdrawal is being submitted; and
(3) the principal amount, if any, of such Security or
Securities which remains subject to the original Change in Control
Purchase Notice, and which has been and will be delivered for purchase
by the Company.
There shall be no purchase of any Securities pursuant to
Section 1501 if there has occurred and in continuing an Event of Default (other
than a default in the payment of the Change in Control Purchase Price).
Section 1503. Deposit of Change in Control Purchase Price.
Prior to 12:00 Noon (local time in The City of New York) on
the Business Day following the Change in Control Purchase Date, the Company
shall deposit with the Trustee (or, if the Company or a Subsidiary or an
Affiliate of either of them is acting as Paying Agent, shall segregate and hold
in trust as provided in Section 1003) an amount of cash in immediately
available funds or securities, if expressly permitted hereunder, sufficient to
pay the aggregate Change in Control Purchase Price of all the Securities or
portions thereof which are to be purchased. If a deposit is made with the
Trustee of the aforesaid amount of cash or securities, the Securities or
portions thereof with respect to which a Change in Control Purchase Notice has
been delivered and not validly withdrawn shall become due and payable as of the
Business Day following the applicable Change in Control Purchase Date, and on
and after such date interest payable in respect of such Securities shall cease
and all other rights of the Holders thereof shall terminate, other than the
right to receive the Change in Control Purchase Price upon delivery of such
Securities to the Trustee.
88
<PAGE> 97
Section 1504. Covenant to Comply With Securities Laws Upon
Purchase of Securities.
In connection with any purchase of securities under Section
1601 hereof, the Company shall (a) comply with Rule 13e-4 under the Exchange
Act of 1934, if applicable, (b) file the related Schedule 13E-4 (or any
successor schedule, form or report) under the Exchange Act of 1934, if
applicable, and (c) otherwise comply with all Federal and state securities laws
regulating the purchase of the Securities (including positions of the
Commission under applicable no-action letters) so as to permit the rights and
obligation under Section 1501 to be exercised in the time and in the manner
specified in Section 1501 and 1502.
Section 1505. Repayment to the Company.
The Trustee shall return to the Company any cash, together
with interest or dividends, if any, thereon (subject to the provisions of
Section 605) held by it for the payment of the Change in Control Purchase Price
of the Securities that remain unclaimed as provided in the Securities;
provided, however, that to the extent the aggregate amount of cash deposited by
the Company pursuant to Section 1503 exceeds the aggregate Change in Control
Purchase Price of the Securities or portions thereof to be purchased, then
promptly after the Change in Control Purchase Date, the Trustee shall return
any such excess to the Company together with interest or dividends, if any,
thereon (subject to the provisions of Section 605).
* * * *
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
89
<PAGE> 98
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
[SEAL] APACHE CORPORATION
Attest:
By ________________________________
Name:
Title:
[SEAL] CHEMICAL BANK,
as Trustee
Attest:
By __________________________________
Name:
Title:
90
<PAGE> 99
STATE OF _________)
) : SS.:
COUNTY OF _________)
On the _____ day of ________________, 199_, before me
personally came _______________, to me known, who, being by me duly sworn, did
depose and say that he is a _____________ of APACHE CORPORATION, a State of
Delaware corporation, one of the persons described in and who executed the
foregoing instrument; that he knows the seal of said Corporation; that the seal
affixed to said instrument is such Corporation's seal; that it was so affixed
by authority of the Board of Directors of said Corporation; and that he signed
his name thereto by like authority.
____________________________
Notary Public
[NOTARIAL SEAL]
91
<PAGE> 100
STATE OF New York )
) : SS.:
COUNTY OF New York )
On the _____ day of ________________, 199_, before me
personally came _______________, to me known, who, being by me duly sworn, did
depose and say that he is a _____________ of CHEMICAL BANK, a banking
corporation organized and existing under the laws of the State of New York, one
of the persons described in and who executed the foregoing instrument; that he
knows the seal of said Corporation; that the seal affixed to said instrument is
such Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
____________________________
Notary Public
[NOTARIAL SEAL]
92
<PAGE> 1
EXHIBIT 5.1
[APACHE LETTERHEAD]
October 31, 1995
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Ladies and Gentlemen:
I am General Counsel to Apache Corporation, a Delaware corporation
(the "Company"), and am rendering this opinion in my capacity as such in
connection with the proposed offering from time to time of up to an aggregate
$250,000,000 principal amount of the Company's senior unsecured debt securities
(the "Notes") described in the Company's registration statement on Form S-3
(the "Registration Statement"). The Notes are to be issued in one or more
series pursuant to an Indenture between the Company and Chemical Bank,
Trustee. The Notes are to be offered upon the terms and subject to the
conditions set forth in a proposed Distribution Agreement by and between the
Company and First Chicago Capital Markets, Inc., Lehman Brothers, Inc., and
J.P. Morgan Securities, Inc. (the "Distribution Agreement").
In connection therewith, I have examined the Registration Statement
covering the Remarketed Notes which is to be filed with the Securities and
Exchange Commission, originals or copies certified or otherwise identified to
my satisfaction of the Restated Certificate of Incorporation and the Bylaws of
the Company, each as amended to date, the corporate proceedings with respect to
the offering of Notes and such other documents and instruments as I have deemed
necessary or appropriate for the expression of the opinions contained herein.
I have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to me as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to me as copies, the authenticity and completeness of originals of
those records, certificates and other instruments submitted to me as copies and
the correctness of all statements of fact contained in all records,
certificates and other instruments that I have examined.
Based on the foregoing, and having regard for such legal
considerations as I have deemed relevant, I am of the opinion that the Notes
have been duly authorized and when duly executed by the proper officers of the
Company, authenticated and delivered by the Trustee in accordance with the
Indenture, and issued and sold pursuant to the terms of the Distribution
Agreement against
<PAGE> 2
October 31, 1995
Page 2
payment of the consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting enforcement
of creditors' rights generally or by general equity principles, and except
further as enforcement thereof may be limited by (1) requirements that a claim
with respect to any Notes denominated other than in U.S. dollars (or a foreign
currency or composite currency judgment in respect of such claim) be converted
into U.S. dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to limit, delay or
prohibit the making of payments outside the United States.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the caption "Legal
Matters" in the prospectus included as a part of the Registration Statement.
Very truly yours,
/s/ Zurab S. Kobiashvili
<PAGE> 1
EXHIBIT 8.1
[WOODARD, HALL & PRIMM LETTERHEAD]
November 2, 1995
Apache Corporation
2000 Post Oak Boulevard
Suite 100
Houston, Texas 77056-4400
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for Apache Corporation, a Delaware
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S-3 (the "Registration Statement") relating to the
registration under the Securities Act of 1933, as amended, of up to an
aggregate $250,000,000 principal amount of the Company's debt securities (the
"Debt Securities"). The Debt Securities are to be issued from time to time in
one or more series pursuant to an Indenture between the Company and Chemical
Bank. The terms of the Debt Securities, which are set forth in the Registration
Statement, are incorporated herein by reference.
Based upon the terms of the Debt Securities, as set forth in the
Registration Statement, we hereby confirm that the discussion set forth in the
Registration Statement under the caption "Certain United States Federal Income
Tax Considerations," except as otherwise stated therein, constitutes our
opinion as to the material federal income tax considerations of the
acquisition, holding and disposition of the Debt Securities.
Pursuant to the provisions of Rule 436(a) promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as amended, we hereby
consent to the filing of this letter as an exhibit to the Registration
Statement and to the references to us under the headings "Certain United States
Federal Income Tax Considerations" and "Legal Matters" in the prospectus
included therein.
Very truly yours,
/s/ WOODARD, HALL & PRIMM, P.C.
<PAGE> 1
EXHIBIT 12.1
APACHE CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- ---------------------------------------------------
(IN THOUSANDS) 1995 1994 1994 1993 1992 1991 1990
- ----------------------------- ------- ------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
- -------
Pretax income (loss) from
continuing operations(1)... $10,793 $30,093 $ 66,234 $62,067 $(5,759) $(57,482) $74,463
Add: Fixed charges excluding
capitalized interest....... 39,303 17,646 39,008 34,355 43,603 41,889 21,763
------- ------- -------- ------- ------- -------- -------
Adjusted earnings............ $50,096 $47,739 $105,242 $96,422 $37,844 $(15,593) $96,226
======= ======= ======== ======= ======= ======== =======
FIXED CHARGES
- ------------
Interest expense including
capitalized interest(2).... $43,609 $16,832 $ 37,838 $34,205 $45,731 $ 48,117 $27,368
Amortization of debt
expense.................... 2,373 1,744 3,987 3,896 3,888 2,052 419
Interest component of lease
rental expenditure(3)...... 1,756 1,753 3,217 2,533 2,980 2,373 2,030
------- ------- -------- ------- ------- -------- -------
$47,738 $20,329 $ 45,042 $40,634 $52,599 $ 52,542 $29,817
======= ======= ======== ======= ======= ======== =======
Ratio of earnings to fixed
charges.................... 1.05 2.35 2.34 2.37 0.72(4) --(4) 3.23
======= ======= ======== ======= ======= ======== =======
</TABLE>
- ---------------
(1) Undistributed income of less-than-50% owned affiliates is excluded.
(2) Apache has guaranteed and is contingently liable for certain debt. This
debt, primarily associated with partnership operations, totaled
approximately $8.1 million at December 31, 1994 and $7.8 million at June 30,
1995. The weighted average interest rate was 6.875% at both December 31,
1994 and June 30, 1995. Fixed charges, relating to debt for which Apache is
contingently liable, have not been included in the fixed charges for any of
the periods shown above, based on the financial position of the partnerships
and their ability to service the debt.
(3) Represents the portion of rental expense assumed to be attributable to
interest factors of related rental obligations determined at interest rates
appropriate for the period during which the rental obligations were
incurred. Approximately 32% applies for all periods presented.
(4) Earnings were inadequate to cover fixed charges for the year 1991 by $68.1
million and $14.8 million for the year 1992.
<PAGE> 1
Exhibit 23.1
Consent of Arthur Andersen LLP
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 14, 1995 on
the audited Statement of Combined Revenues and Direct Operating Expenses for
the Oil and Gas Properties of Texaco Exploration and Production Inc. Sold to
Apache Corporation, to the incorporation by reference in this registration
statement of our report dated May 17, 1995 on the audited restated consolidated
financial statements of Apache Corporation and subsidiaries included in the
Apache Corporation Annual Report on Form 10-K/A for the year ended December 31,
1994, and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Houston, Texas
October 30, 1995
<PAGE> 1
[Coopers & Lybrand Letterhead]
Exhibit 23.2
Consent of Coopers & Lybrand
We hereby consent to the incorporation by reference in this registration
statement of our report dated February 13, 1995 on our audits of the
consolidated financial statements of DEKALB Energy Company as of December 31,
1994 and 1993 and for the years ended December 31, 1994, 1993 and 1992, and our
report dated February 13, 1995 on our audit of the associated financial
statement schedule of DEKALB Energy Company; and to all references to our Firm
included in this registration statement.
/s/ Coopers & Lybrand
Coopers & Lybrand
Chartered Accountants
Calgary, Alberta, Canada
October 30, 1995
<PAGE> 1
EXHIBIT 23.3
[RYDER SCOTT COMPANY LETTERHEAD]
CONSENT OF RYDER SCOTT COMPANY PETROLEUM ENGINEERS
As independent petroleum engineers, we hereby consent to the incorporation by
reference in this registration statement of our Firm's review of the proved oil
and gas reserve quantities of Apache Corporation, DEKALB Energy Company, and of
certain properties acquired from Texaco Exploration and Production Inc., as of
January 1, 1995, and to all references to our Firm's name and review included
in this registrations statement.
/s/ Ryder Scott Company
Petroleum Engineers
--------------------------
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
October 27, 1995
<PAGE> 1
EXHIBIT 23.4
[NETHERLAND, SEWELL & ASSOOCIATES, INC. LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference in this
registration statement of our Firm's report on the proved oil and gas reserve
quantities of Aquila Energy Resources Corporation as of December 31, 1994, and
to all references to our Firm's name and report included in this registration
statement.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: DANNY D. SIMMONS
---------------------------------
Danny D. Simmons
Senior Vice President
Houston, Texas
October 27, 1995
<PAGE> 1
Exhibit 25.1
---------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ____
-------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
</TABLE>
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
----------------------------------------------------------
APACHE CORPORATION
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 41-0747868
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
ONE POST OAK CENTRAL
2000 POST OAK BOULEVARD, SUITE 100
HOUSTON, TEXAS 77056-4400
(Address of principal executive offices) (Zip Code)
</TABLE>
-------------------------------------------
DEBT SECURITIES
(Title of the indenture securities)
-------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985 and December 2, 1991 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 33-50010, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 14TH day of SEPTEMBER, 1995.
CHEMICAL BANK
By/s/ Andrew M. Deck
---------------------------------------
Andrew M. Deck
Trust Officer
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS In Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 5,573
Interest-bearing balances ......................... 2,681
Securities: ..........................................
Held to maturity securities............................ 6,027
Available for sale securities.......................... 18,304
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................ 1,516
Securities purchased under agreements to resell ... 287
Loans and lease financing receivables:
Loans and leases, net of unearned income $73,829
Less: Allowance for loan and lease losses 1,885
Less: Allocated transfer risk reserve ... 104
------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 71,840
Trading Assets ........................................ 25,315
Premises and fixed assets (including capitalized
leases)............................................ 1,395
Other real estate owned ............................... 69
Investments in unconsolidated subsidiaries and
associated companies............................... 158
Customer's liability to this bank on acceptances
outstanding ....................................... 1,120
Intangible assets ..................................... 484
Other assets .......................................... 7,254
--------
TOTAL ASSETS .......................................... $142,023
</TABLE> ========
- 4 -
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices ................................ $46,128
Noninterest-bearing .........................$16,282
Interest-bearing .............................29,846
------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .................................... 30,833
Noninterest-bearing .........................$ 199
Interest-bearing ............................ 30,634
------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ............................ 16,779
Securities sold under agreements to repurchase ..... 810
Demand notes issued to the U.S. Treasury .............. 1,001
Trading liabilities ................................... 20,888
Other Borrowed money:
With original maturity of one year or less ......... 6,505
With original maturity of more than one year ....... 602
Mortgage indebtedness and obligations under capitalized
leases ............................................. 18
Bank's liability on acceptances executed and outstanding 1,126
Subordinated notes and debentures ..................... 3,411
Other liabilities ..................................... 6,287
TOTAL LIABILITIES ..................................... 134,388
-------
EQUITY CAPITAL
Common stock .......................................... 620
Surplus ............................................... 4,524
Undivided profits and capital reserves ................ 2,724
Net unrealized holding gains (Losses)
on available-for-sale securities ...................... (241)
Cumulative foreign currency translation adjustments ... 8
TOTAL EQUITY CAPITAL .................................. 7,635
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .......................... $142,023
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 5 -
<PAGE> 1
EXHIBIT 99.1
REMARKETING AGREEMENT
This REMARKETING AGREEMENT, dated as of ______ __, 1995 (the
"Remarketing Agreement"), is among Apache Corporation, a Delaware corporation
(the "Company"), _______________ (the "Remarketing Agent") and _______(the
"Standby Remarketing Agent").
WHEREAS, the Company expects to issue $_________ aggregate
principal amount of its Remarketed Notes (the "Notes") under an Indenture,
dated as of ______ __, 1995 (the "Indenture"), between the Company and Chemical
Bank, as trustee (the "Trustee"), which Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended (the "1939 Act");
WHEREAS, the Company has filed with the Securities and
Exchange Commission (the "Commission") a shelf registration statement on Form
S-3 (No. 33-_____) under the Securities Act of 1933, as amended (the "1933
Act"), in connection with the offering of Debt Securities, including the Notes,
which registration statement was declared effective by order of the Commission
on ___ __, 1995, and, has filed such amendments thereto, such amended
prospectuses as may have been required to the date hereof and will file such
additional amendments thereto and such additional amended prospectuses as may
hereafter be required;
WHEREAS, the Notes were initially sold through [the
Remarketing Agent] pursuant to a distribution agreement dated _______, 1995
among First Chicago Capital Markets, Inc., Lehman Brothers Inc. and J.P. Morgan
Securities Inc. (the "Distribution Agreement");
WHEREAS, the Company intends by this Agreement to (a) appoint
the Remarketing Agent to act as remarketing agent with respect to the Notes for
the purpose of (i) setting the interest rate or rates and the Spread (if any)
and/or Spread Multiplier (if any) for such Notes, (ii) setting the Interest
Rate Period in certain circumstances, (iii) remarketing such Notes from time to
time on behalf of the Beneficial Owners thereof and (iv) accepting tendered
Notes for remarketing and receiving payment of the purchase price for Notes
subject to remarketing and paying Beneficial Owners on whose behalf such Notes
were remarketed and (b) appoint the Standby Remarketing Agent to act as standby
remarketing agent as provided herein; and
WHEREAS, the Remarketing Agent and the Standby Remarketing
Agent are willing to assume such duties on the terms and conditions expressly
set forth herein;
<PAGE> 2
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used and not
defined in this Agreement shall have the meanings assigned to them in the
Distribution Agreement, the Indenture or the Notes. Unless the context
otherwise requires, references herein to the Remarketing Agent or the
Remarketing Agents shall include the Standby Remarketing Agent.
Section 2. Representations and Warranties. (a) The Company
represents and warrants to each of the Remarketing Agent and the Standby
Remarketing Agent as of the date hereof and as of each Interest Rate Adjustment
Date for each Interest Rate Period that (i) it has made all the filings with
the SEC that it is required to make under the 1934 Act and the 1934 Act
Regulations (collectively, the "1934 Act Documents"), that each 1934 Act
Document complied in all material respects with the requirements of the 1934
Act and 1934 Act Regulation, and each 1934 Act Document did not at the time of
filing with the SEC include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were, not misleading, and (ii) no consent, approval, authorization, order or
decree of any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this Agreement
or in connection with the remarketing of Notes pursuant hereto, except such as
have been obtained or rendered, as the case may be.
(b) The Company represents and warrants to each of the Remarketing
Agent and the Standby Remarketing Agent as of the date hereof, as of each date
on which the interest rate for a Long Term Rate Period is established and as of
each Interest Rate Adjustment Date for a Long Term Rate Period (each such date
being hereinafter referred to as a "Representation Date"), as follows:
(i) Due Incorporation and Qualification. The
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the 1934 Act
Documents and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in Texas and in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the fail-
2
<PAGE> 3
ure to so qualify and be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(ii) Subsidiaries. Each "significant subsidiary"
of the Company as defined in Rule 405 of Regulation C of the 1933 Act
Regulations (collectively, the "Significant Subsidiaries") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the 1934 Act Documents and is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify and be
in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the results of operations,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and, except as disclosed in
the 1934 Act Documents, all of the issued and outstanding capital
stock of each Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except for
directors' qualifying shares (if applicable), is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iii) Accountants. The accountants who certified
the financial statements included or incorporated by reference in the
1934 Act Documents are independent public accountants within the
meaning of the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial
statements and any supporting schedules of the Company and its
subsidiaries included or incorporated by reference in the 1934 Act
Documents present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the
consolidated results of their operations for the periods specified;
except as stated therein, said financial statements have been prepared
in conformity with U.S. generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included
or incorporated by reference in the 1934
3
<PAGE> 4
Act Documents present fairly the information required to be stated
therein.
(v) Engineers. The petroleum engineers who have
consented to being named as having reviewed certain reserve data
included or incorporated by reference in the 1934 Act Documents are
independent engineers with respect to the Company and its
subsidiaries.
(vi) Authorization and Validity of this Agreement,
the Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agents, will be a valid and legally binding agreement of the
Company; the Indenture has been duly authorized, executed and
delivered by the Company and, upon execution and delivery by the
Trustee, will be a valid and legally binding agreement of the Company
enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and
except further as enforcement thereof may be limited by (1)
requirements that a claim with respect to any Notes denominated other
than in U.S. dollars (or a foreign currency or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a
rate of exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay or
prohibit the making of payments outside the United States. The Notes
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and
except further as enforcement thereof may be limited by (1)
requirements that a claim with respect to any Notes denominated other
than in U.S. dollars (or a foreign currency or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a
rate of exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay or
prohibit the making of payments outside the United States. Each
Holder (as defined in the Indenture) of Notes will be entitled to the
benefits of the Indenture.
(vii) Material Adverse Changes or Material
Transactions. Since the respective dates as of which information is
given in the 1934 Act Documents, except as
4
<PAGE> 5
may otherwise be stated therein or contemplated thereby, (1) there has
been no material adverse change in the condition, financial or
otherwise, or in the results of operations, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business and (2) there have been no material transactions entered into
by the Company or any of its subsidiaries other than those in the
ordinary course of business or that would not have a material adverse
effect on the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(viii) No Defaults. Neither the Company nor any of
its subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or any of them or their properties may be bound, where
the consequences of such violation or default would have a material
adverse effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and the
execution and delivery of this Agreement and the Indenture and the
consummation of the transactions contemplated herein and therein have
been duly authorized by all necessary corporate action of the Company
and will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be
bound or to which any of the property or assets of the Company or any
such subsidiary is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company
or any law, administrative regulation or administrative or court order
or decree, where the consequences of such conflict, breach, creation,
imposition, violation or default would have a material adverse effect
on the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(ix) Legal Proceedings. Except as may be included
or incorporated by reference in the 1934 Act Documents, there is no
action, suit or proceeding before or by any
5
<PAGE> 6
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened against or
affecting, the Company or any of its subsidiaries, which might, in the
opinion of the Company, result in any material adverse change in the
condition, financial or otherwise, or in the results of operations,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or could reasonably be
expected to materially and adversely affect the properties or assets
thereof or could reasonably be expected to materially and adversely
affect the consummation of this Agreement or the Indenture or any
transaction contemplated hereby or thereby.
(x) Licenses. Neither the Company nor any of its
subsidiaries is in violation of any law, ordinance, governmental rule
or regulation or court decree to which it may be subject or has failed
to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure would materially
adversely affect the condition, financial or otherwise, or the results
of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and the Company and
its subsidiaries own or possess or have obtained all governmental
licenses, permits, consents, orders, approvals and other
authorizations and has properly filed with the appropriate authorities
all notices, applications and other documents, as are necessary to
lease or own their respective properties and to carry on their
respective businesses as presently conducted, except where the failure
to possess such licenses or authorizations or to make such filings
would not materially adversely affect the condition, financial or
otherwise, or the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(xi) Trademarks; Service Marks. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate trademarks, service marks and trade names necessary to
conduct the business now operated by them, except as set forth or
incorporated by reference in the 1934 Act Documents or except where
the failure to own or possess would not materially adversely affect
the condition, financial or otherwise, or the results of operations,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, and neither the Company nor
any of its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any
trademarks, service marks or
6
<PAGE> 7
trade names which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially adversely
affect the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xii) Property. The Company and its subsidiaries
have legal, valid and defensible title to all of their interests in
oil and gas properties and to all other real and personal property
owned by them and any other real property and buildings held under
lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases in each case, free and clear
of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances and defects of any kind, except such as
(a) are described in the 1934 Act Documents, (b) liens and
encumbrances under operating agreements, unitization and pooling
agreements, production sales contracts, farm-out agreements and other
oil and gas exploration and productions agreements, in each case that
secure payment of amounts not yet due and payable for the performance
of other inchoate obligations and are of a scope and nature customary
in connection with similar drilling and producing operations or (c)
those that do not have a material adverse effect on the condition,
financial or otherwise, the results of operations, business affairs or
business prospects of the Company.
(xiii) Reserves. The information underlying the
estimates of oil and gas reserves as described in the 1934 Act
Documents is complete and accurate in all material respects (or, with
regard to any information underlying the estimates prepared by any
petroleum engineers retained by any seller of such oil and gas
reserves, is to the best knowledge of the Company after reasonable
investigation, complete and accurate in all material respects); other
than production of the reserves in the ordinary course of business and
intervening product price fluctuations described in the 1934 Act
Documents, the Company is not aware of any facts or circumstances that
would result in a material adverse change in the reserves or the
present value of future net cash flows therefrom as described in the
1934 Act Documents. Estimates of such reserves and present values
comply in all material respects with the applicable requirements of
Regulation S-X and Industry Guide 2 under the 1934 Act.
(xiv) Investment Company Act. Neither the Company
nor any of its subsidiaries is required to be registered
7
<PAGE> 8
under the Investment Company Act of 1940, as amended (the "1940 Act").
(xv) Environmental Compliance. Except as
described in the 1934 Act Documents, (A) neither the Company nor any
of its subsidiaries is in violation of any local or foreign laws or
regulations relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), except such violations as would not, singly or in the
aggregate, have a material adverse effect on the condition, financial
or otherwise, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, and (B) to the best of the Company's knowledge, there
are no events or circumstances that could reasonably be expected to be
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating
to any Hazardous Materials or the violation of any Environmental Laws,
which, singly or in the aggregate, could reasonably be expected to
have a material adverse effect on the condition, financial or
otherwise, or the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(c) Additional Certifications. Any certificate signed by any
director or officer of the Company and delivered to one or more Remarketing
Agents or to counsel for the Remarketing Agents in connection with an offering
of Notes to one or more Remarketing Agents as principal or through a
Remarketing Agent as agent shall be deemed a representation and warranty by the
Company to such Remarketing Agent or Agents as to the matters covered thereby.
Section 3. Covenants of the Company. The Company covenants
with each of the Remarketing Agent and the Standby Remarketing Agent as
follows:
(a) The Company will provide prompt notice to the Remarketing
Agents of any notification by a rating agency
8
<PAGE> 9
with regard to the ratings of any securities of the Company.
(b) The Company will to furnish to each of the Remarketing
Agent and the Standby Remarketing Agent:
(i) the Registration Statement and the Prospectus
relating to the Notes (including in each case any amendment or
supplement thereto and each document incorporated therein by
reference);
(ii) each 1934 Act Document filed after the date
hereof;
(iii) notice of the occurrence of any of the events
set forth in clause (c) of Section 8 hereof; and
(iv) in connection with each remarketing of Notes,
such other information as each of such Remarketing Agents may
reasonably request from time to time; provided the Company is
not obligated to provide any material non-public information
unless such information relates to any material adverse change
or any event or situation which could reasonably be expected
to result in a material adverse change in the financial
condition, results of operations or business affairs of the
Company, and provided further that information provided by
the Company pursuant hereto may only be distributed to holders
and potential holders of Notes by a Remarketing Agent with the
prior approval of the Company as to the form and content of
such information.
The Company agrees to provide each of the Remarketing Agents with as
many copies of the foregoing written materials and other Company
approved information as the Remarketing Agents may reasonably request
for use in connection with each remarketing of Notes and consents to
the use thereof for such purpose.
(c) If, at any time during which the Remarketing Agent would
be obligated to take any action under this Agreement, any event or
condition known to the Company relating to or affecting the Company,
any subsidiary thereof or the Notes shall occur which could reasonably
be expected to affect the accuracy or completeness of any statement of
a material fact contained in any of the reports, documents, materials
or information referred to in paragraph (b) above or any document
incorporated therein by reference (collectively, the "Remarketing
Materials"), the Company shall promptly notify each of the Remarketing
Agents in writing of the circumstances and details of such event or
9
<PAGE> 10
condition unless the Company, in its sole discretion reasonably
exercised, determines that it is not required to disclose such
information pursuant to the 1934 Act or the 1934 Act Regulations.
(d) Notwithstanding any other provision of this Agreement, a
Remarketing Agent may resign and be discharged from its duties and
obligations hereunder at any time if, in its sole discretion, it
determines that it lacks the information or the ability to distribute
the information necessary to perform its obligations hereunder or to
comply with applicable laws and regulations in connection therewith,
such resignation to be effective upon delivery of notice to the
Company, the Trustee and the other Remarketing Agents, if any, of such
resignation provided that no Remarketing Agent shall resign with
respect to any Note between 12:30 p.m., New York City time, and the
close of business on any Interest Rate Adjustment Date for such Note.
Section 4. Appointment and Obligations of the Remarketing
Agent and the Standby Remarketing Agent. (a) The Company hereby appoints the
Remarketing Agent, and the Remarketing Agent hereby accepts such appointment,
as the Remarketing Agent with respect to the Notes initially sold by, through
or to such Remarketing Agent for the purpose of (i) setting the interest rate
or rates and the Spread (if any) and/or the Spread Multiplier (if any) for such
Notes, (ii) setting the Interest Rate Period in certain circumstances, (iii)
remarketing such Notes from time to time on behalf of the Beneficial Owners
thereof and (iv) accepting such tendered Notes for remarketing and receiving
payment of the purchase price for such Notes subject to remarketing and paying
Beneficial Owners on whose behalf such Notes were remarketed. In addition, for
purposes of facilitating the remarketing arrangements provided for herein, the
Company hereby appoints the Standby Remarketing Agent, and the Standby
Remarketing Agent hereby accepts such appointment, on the terms set forth
herein. In the event that a Remarketing Agent is not able to remarket Notes on
any Interest Rate Adjustment Date, then the applicable Standby Remarketing Agent
shall use its reasonable efforts to assist in the remarketing of such Notes.
Any duty to provide notification by a Remarketing Agent to the Company or the
Trustee hereunder shall be solely the responsibility of such Remarketing Agent
and not that of the Standby Remarketing Agent. Unless otherwise specified
herein, the Standby Remarketing Agent shall have all of the rights, privileges
and benefits of a Remarketing Agent as fully as though named as such herein for
the period it is acting as Standby Remarketing Agent.
10
<PAGE> 11
Subject to Section 6 hereof, the Company reserves the right to appoint
or replace the Remarketing Agent or the Standby Remarketing Agent with respect
to any issue of Notes at any time.
(b) The Remarketing Agent agrees to (i) use its reasonable
efforts to set the interest rate for each Note and the Spread (if any) and the
Spread Multiplier (if any) in the Interest Rate Mode selected by the Company,
which rate shall be the lowest rate necessary in the judgment of the
Remarketing Agent to remarket such Note on such date of determination at a
price equal to 100% of the principal amount thereof, (ii) notify the Company,
DTC and the Trustee promptly of such interest rate and the Spread (if any) and
the Spread Multiplier (if any) for such Note and with respect to the next
Interest Rate Period for such Note, (iii) use its reasonable efforts to
remarket each Note tendered to such Remarketing Agent in remarketings held from
time to time and (iv) accept tendered Notes for remarketing and receive payment
of the purchase price for Notes subject to remarketing and pay Beneficial
Owners on whose behalf such Notes were remarketed.
(c) It is expressly understood and agreed by the parties
hereto that the Remarketing Agent shall not be obligated to set the interest
rate or the Spread or Spread Multiplier on any Notes or to remarket any Notes
or perform any of the other duties set forth herein at any time that any of the
conditions set forth in clause (a) or (b) of Section 8 hereof shall not have
been fully and completely met to the satisfaction of the Remarketing Agent or
at any time any of the events set forth in clause (c) of Section 8 hereof shall
have occurred.
(d) In connection with any Note that is being remarketed into
a Short Term Rate Period on the next Interest Rate Adjustment Date for such
Remarketed Note, by 11:00 a.m., New York City time, on the Interest Rate
Adjustment Date for such Note, the Remarketing Agent will determine the interest
rate for such Note to the nearest one hundred-thousandth (0.00001) of one
percent per annum for the Interest Rate Period in which such Interest Rate
Adjustment Date falls; provided that, in the event that the Remarketing Agent
is unable to remarket such Note by 11:00 a.m., New York City time, it shall so
notify the Standby Remarketing Agent (if any) and the Company and, between
11:00 a.m., New York City time and 11:50 a.m., New York City time, the
Remarketing Agent and the Standby Remarketing Agent (if any) shall use their
reasonable efforts to determine the interest rate for any Notes not
successfully remarketed as of 11:00 a.m., New York City time. For such
purpose, the Standby Remarketing Agent shall immediately notify the Remarketing
Agent of the principal amount of Notes that the Standby Remarketing Agent is
able to remarket at a price equal to 100% of the principal amount thereof.
In connection with any Note that is being remarketed into a
Long Term Rate Period on the next Interest Rate Adjustment Date for such Note,
by 4:00 p.m., New York City time, on the third Business Day preceding such
Interest Rate Adjustment Date, the Remarketing Agent will determine the
interest rate for such Note to the nearest one hundred-thousandth of one
percent per annum for the next Interest Rate Period; provided that, if for any
reason the Remarketing Agent is unable to determine such interest rate at such
time, the next Interest Rate Period for such Note shall be Weekly Rate Period
or such other Short Term Rate Period as the Company may determine by 9:30 a.m.,
New York City time, on such Interest Rate Adjustment Date.
In determining the applicable interest rate for any Notes and
other terms, the Remarketing Agent and, if applicable, the Standby Remarketing
11
<PAGE> 12
Agent will, after taking into account market conditions as reflected in the
prevailing yields on fixed and variable rate taxable debt securities, (i)
consider the principal amount of the Notes tendered or to be tendered on the
applicable Interest Rate Adjustment Date and the principal amount of such
Notes prospective purchasers are or may be willing to purchase and (ii)
contact, by telephone or otherwise, prospective purchasers and ascertain the
interest rates or, if applicable, Spread and Spread Multiplier therefor at
which they would be willing to hold or purchase such Notes.
(e) By 12:30 p.m., New York City time, on the Interest Rate
Adjustment Date for any Note, the Remarketing Agent will notify the Company,
the Trustee and DTC in writing (including facsimile or appropriate electronic
media) of (i) the interest rate and/or, if applicable, the Spread and the
Spread Multiplier, and the next Interest Rate Adjustment Date applicable to
such Note, (ii) the aggregate principal amount of all tendered Notes for which
the Remarketing Agent is responsible hereunder on such date, and (iii) the
aggregate principal amount of tendered Notes that the Remarketing Agent and the
applicable Standby Remarketing Agent were unable to remarket, at a price equal
to 100% of the principal amount thereof.
(f) By telephone or in writing (including facsimile) not
later than approximately 1:00 p.m., New York City time, on such Interest Rate
Adjustment Date, the Remarketing Agent will advise each purchaser of Notes
remarketed on such date (or the DTC Participant of each such purchaser who it
is expected in turn will advise such purchaser) of the principal amount of
Notes that such purchaser is to purchase.
(g) The Remarketing Agent will make payment to the DTC
Participant of each tendering Beneficial Owner of Notes subject to a
remarketing, by book entry through DTC by the close of business on the Interest
Rate Adjustment Date against delivery through DTC of such Beneficial Owner's
tendered Notes, of: (i) the purchase price for such tendered Notes that have
been sold in the remarketing, and (ii) if any such Notes were subject to
purchase as provided in clause (h) of this Section 4, the purchase price of
such Notes plus accrued interest, if any, to such date.
(h) By 12:30 p.m., New York City time, on any Interest Rate
Adjustment Date, the Remarketing Agent shall notify the Company and the
Trustee, in writing (including facsimile), of the principal amount of Notes
that the Remarketing Agent and the Standby Remarketing Agent were unable to
remarket at a price equal to 100% of the principal amount thereof on such date.
Such notice will constitute a demand on the Company to purchase such
unremarketed Notes at a price equal to the outstanding
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<PAGE> 13
principal amount thereof. The Company thereupon will be obligated under the
terms of the Indenture to purchase such unremarketed Notes. The Company will
deposit same-day funds with the Remarketing Agent by 3:00 p.m., New York City
time, on such Interest Rate Adjustment Date, in an amount equal to the
principal amount of such unremarketed Notes plus accrued interest thereon.
Notwithstanding any other provision of this Remarketing Agreement to the
contrary, the Remarketing Agent shall not utilize any funds advanced by the
Company for the purchase of unremarketed Notes for which the Company shall not
have deposited accrued and unpaid interest in accordance with the preceding
sentence.
(i) The Remarketing Agent shall supply to any Beneficial
Owner upon request information regarding the interest rate, Spread (if any),
Spread Multiplier (if any), Interest Rate Mode, Interest Rate Period and next
Interest Rate Adjustment Date applicable to such Beneficial Owner's Notes.
(j) The Remarketing Agent may, in accordance with the
Indenture, modify the settlement procedures set forth in or pursuant to the
Indenture in order to facilitate the settlement process.
(k) The Company shall give the Remarketing Agent 15 days
prior written notice of redemption of any Note. The Remarketing Agent's
obligation to remarket such Note shall terminate immediately upon receipt of
such notice.
Section 5. Fees and Expenses. For its services in performing
its duties set forth under Section 4(a) hereof and in determining the interest
rate and remarketing Notes, the Remarketing Agent will be entitled to receive a
fee as described below. With respect to Notes in the Short Term Rate Mode, the
Company shall pay to the Remarketing Agent on January 15, April 15, July 15,
and October 15 ____% of the average outstanding principal amount of Notes in
the Short Term Rate Mode during the immediately preceding quarter for which the
Remarketing Agent was responsible hereunder (or, in the case of the first
quarter ending ________________, ____% per annum of such average outstanding
principal amount of Notes). If Notes for which the Remarketing Agent is
responsible shall have been redeemed, purchased pursuant to the Special
Mandatory Purchase Right or converted to a Long Term Rate Period during any
quarterly period, the fee with respect to those Notes for such quarterly period
shall be payable on such redemption date, purchase date or conversion date, as
the case may be. The fee payable by the Company to the Remarketing Agent with
respect to Notes in any Long Term Rate Period shall be determined by mutual
agreement of the Company and the Remarketing Agent. A Remarketing Agent may
pay to selected broker-dealers a portion of any fees described above,
reflecting Notes sold through such broker-dealers to purchasers in remarketings
and shall pay to the applicable Standby Remarketing Agent a portion of the fees
described above, reflecting Notes remarketed by such Standby Remarketing Agent
and
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<PAGE> 14
in accordance with the rate paid by the Company to the Remarketing Agent. In
addition to its obligations under Section 9 hereof, the Company shall, from
time to time upon the request of the Remarketing Agent, pay the reasonable fees
and expenses of counsel incurred by the Remarketing Agent in connection with
the performance of its duties hereunder. The obligations of the Company to
make the payments required by this Section 5 shall survive the termination of
this Agreement and remain in full force and effect until all such payments
shall have been made in full.
Section 6. Resignation and Removal of the Remarketing Agents.
(a) A Remarketing Agent may resign and be discharged from its duties and
obligations hereunder at any time, such resignation to be effective 30 days
after delivery of notice to the Company, the Trustee and the other Remarketing
Agent of such resignation; provided, however, that if (i) such resigning
Remarketing Agent shall then be the sole Remarketing Agent or (ii) the other
Remarketing Agent elects to resign or is removed within one week of delivery of
such notice, then no such resignation shall become effective until the Company
shall have appointed at least one broker-dealer as successor Remarketing Agent
and such successor Remarketing Agent shall have entered into a remarketing
agreement with the Company in which it shall have agreed to conduct
remarketings in accordance with the terms and conditions of the Indenture. In
such case, the Company will use its best efforts to appoint a successor
Remarketing Agent and enter into such a remarketing agreement with such person
as soon as reasonably practicable. It shall be the sole obligation of the
Company to appoint a successor Remarketing Agent.
(b) The Company may in its absolute discretion remove a
Remarketing Agent by giving at least 30 days' prior notice to such Remarketing
Agent, the Trustee and the other Remarketing Agent; provided, however, that if
(i) such removed Remarketing Agent shall then be the sole Remarketing Agent or
(ii) the other Remarketing Agent elects to resign or is removed within one week
of delivery of such notice, then no such removal shall become effective until
the Company shall have appointed a broker-dealer as successor Remarketing Agent
and such successor Remarketing Agent shall have entered into a remarketing
agreement with the Company in which it shall have agreed to conduct
remarketings in accordance with the terms and conditions of the Indenture. In
such case, the Company will use its best efforts to appoint a successor
Remarketing Agent and enter into such a remarketing agreement with such person
as soon as reasonably practicable.
(c) The Company may, with the consent of the Remarketing
Agent (which shall not be unreasonably withheld), appoint additional
Remarketing Agents by giving at least 30 days
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<PAGE> 15
prior notice to the Remarketing Agent and the Trustee. Such appointment shall
be effective upon the additional Remarketing Agent becoming a party to this
Remarketing Agreement or entering into such other written agreements as are
reasonably satisfactory to the Company, the Remarketing Agent and the Trustee.
(d) If there shall be more than one Remarketing Agent, all
the Remarketing Agents shall conduct the remarketings of the Notes together and
all references herein to Remarketing Agent shall be deemed to refer to all the
Remarketing Agents.
Section 7. Dealing in the Notes; Redemption of Remarketing
Agents' Notes. (a) The Remarketing Agent, when acting as a Remarketing Agent,
and the Standby Remarketing Agent, when acting as Standby Remarketing Agent,
and each such party in its individual or any other capacity, may, to the extent
permitted by law, buy, sell, hold and deal in any of the Notes.
Notwithstanding the foregoing, neither the Remarketing Agent nor Standby
Remarketing Agent shall be obligated to purchase any Notes that would otherwise
remain unsold in a remarketing. If the Remarketing Agent or the Standby
Remarketing Agent holds any Notes immediately prior to a remarketing of such
Notes and if all other Notes tendered for sale by Beneficial Owners other than
the Remarketing Agent or Standby Remarketing Agent have been sold in such
remarketing, then the Remarketing Agent may sell such number of its Notes or
those of the Standby Remarketing Agent in such remarketing as there are
outstanding orders to purchase that have not been filled by Notes tendered for
sale by Beneficial Owners other than the Remarketing Agent and the Standby
Remarketing Agent. Each of the Remarketing Agent and the Standby Remarketing
Agent, as Holder of the Notes, may exercise any vote or join as a Holder in any
action which any Holder of Notes may be entitled to exercise or take pursuant
to the Indenture with like effect as if it did not act in any capacity
hereunder. Each of the Remarketing Agent and the Standby Remarketing Agent, in
its capacity either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Company as freely as if
it did not act in any capacity hereunder.
(b) The Company may purchase Notes in a remarketing,
provided that the interest rate established with respect to Notes in such
remarketing is not different from the interest rate that would have been
established if the Company had not purchased such Notes.
Section 8. Conditions to the Remarketing Agent's Obligations.
The obligations of each of the Remarketing Agent and the Standby Remarketing
Agent under this Agreement have been undertaken in reliance on, and shall be
subject to, (a) the due performance in all material respects by the Company of
its
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<PAGE> 16
obligations and agreements as set forth in this Agreement and the accuracy of
the representations and warranties in this Agreement and any certificate
delivered pursuant hereto, (b) the due performance in all material respects by
the Company of its obligations and agreements set forth in, and the accuracy in
all material respects as of the dates specified therein of the representations
and warranties contained in, the Distribution Agreement and (c) the further
conditions that (A) none of the following events shall exist at any time during
which the Remarketing Agent would otherwise be obligated to take any action
under this Agreement:
(i) all of the Notes for which such Remarketing
Agent is responsible hereunder shall have been called for redemption
or purchased pursuant to a Special Mandatory Purchase;
(ii) without the prior written consent of the
applicable Remarketing Agent, the Indenture shall have been amended in
any manner, or otherwise contain any provision contained therein as of
the date hereof, that in either case in the reasonable opinion of such
Remarketing Agent materially changes the nature of the Notes or the
remarketing procedures (a "Material Change") (it being understood that
notwithstanding the provisions of this clause (iii) the Company shall
not be prohibited from amending such documents);
(iii) a suspension or material limitation in
trading in securities generally on either the American Stock Exchange
or the New York Stock Exchange or the suspension of trading of the
Company's securities on any exchange shall have occurred or a banking
moratorium shall have been declared by federal, or New York,
authorities;
(iv) any outbreak or escalation of major
hostilities, any declaration of war by Congress or any other
substantial calamity or emergency shall have occurred; or
(v) a material adverse change or any development
which could reasonably be expected to result in a material
16
<PAGE> 17
adverse change in the financial condition, results of operations or
business affairs of the Company shall have occurred; and
(B) with respect to any remarketing of any Note, between the time at which the
interest rate for such Note is determined and the time at which the payment for
such Note is to be made, the rating of the Notes shall have been downgraded or
put on CreditWatch or Watch List with negative implications or withdrawn by a
national rating service after the date hereof, the effect of which, in the
opinion of the applicable Remarketing Agent, is to affect materially and
adversely the market price of the Notes or the Remarketing Agent's ability to
remarket the Notes.
In the event of the failure of any of such conditions, the
applicable Remarketing Agent may terminate its obligations under this
Agreement as provided in Section 11(b).
Section 9. Indemnification. (a) The Company agrees to
indemnify and hold harmless each of the Remarketing Agent and the Standby
Remarketing Agent and their respective officers, directors and employees and
each person, if any, who controls any such party within the meaning of Section
20 of the 1934 Act as follows:
(i) from and against any loss, liability, claim, damage and
expense whatsoever, as incurred, to which any indemnified party may
become subject insofar as such loss, liability, claim, damage and
expense (or actions in respect thereof) arise out of, or are based
upon, (A) the failure to satisfy the prospectus delivery requirements
of the 1933 Act because the Company failed to notify the Remarketing
Agent or the Standby Remarketing Agreement, as the case may be, of
such delivery requirement or failed to provide such Remarketing Agent
with an updated Prospectus for delivery, or (B) any untrue statement
or alleged untrue statement of a material fact contained in any of the
Remarketing Materials (including any incorporated documents), or (C)
the omission or alleged omission to state a material fact required to
be stated in the Remarketing Materials or any revision thereof or
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, or (D) any
violation by the Company of, or any failure by the Company to perform
any of its obligations under, this Agreement, or (E) the duties such
Remarketing Agent performs hereunder except due to its gross
negligence or willful misconduct;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever arising out of, or based upon, any of items (A)
through (E) in clause (i) above; provided that such settlement is
effected with the written consent of the Company, which consent shall
not be unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel
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<PAGE> 18
chosen by such indemnified party), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever arising out of, or
based upon, any of items (A) through (E) in clause (i) above to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that the foregoing indemnity shall not inure to the benefit
of an indemnified party if such losses, claims, damages, liabilities and
expenses arose from the use by the Remarketing Agent or the Standby Remarketing
Agent, as the case may be, or any officer or director of thereof, of written
information it provides to the Company expressly for use in the Remarketing
Materials.
(b) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. If
any such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
each Remarketing Agent shall have the right to employ counsel to represent
jointly the Remarketing Agents and their respective controlling persons who may
be subject to liability arising out of any claim in respect of which indemnity
may be sought by the Remarketing Agents against the Company under this Section
if, in the judgment of any of the Remarketing Agent or Agents, it is advisable
for such Remarketing Agent or Agents and controlling persons to be jointly
represented by separate counsel, and in that event the fees and expenses of
such separate counsel shall be paid by the Company. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior
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<PAGE> 19
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 9 or Section 10 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(c) The indemnity agreements contained in this Section 9
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Remarketing Agent or Standby
Remarketing Agent, and shall survive the termination or cancellation of this
Agreement and the remarketing of any Notes hereunder.
Section 10. Contribution. If the indemnification provided
for in Section 9 hereof is for any reason unavailable to or insufficient to
hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Remarketing Agents on the other hand from
the remarketing of the Notes pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Remarketing Agents on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and each of the
Remarketing Agents on the other hand in connection with the remarketing of the
Notes pursuant to this Agreement shall be deemed to be in such proportions that
the Remarketing Agent is responsible for that portion represented by the
percentage that the commissions and fees received by such Remarketing Agent in
connection with such remarketing bears to the aggregate principal amount of
such Notes outstanding at the time of such remarketing, and the Company is
responsible for the balance. The relative fault of the Company on the one
hand and the Remarketing Agents
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<PAGE> 20
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Remarketing Agents and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Remarketing Agents agree that
it would not be just and equitable if contribution pursuant to this Section 10
were determined by pro rata allocation (even if the Remarketing Agents were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this Section 10. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 10 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 10, no Remarketing
Agent shall be required to contribute any amount in excess of the amount by
which the total principal amount of which the Notes remarketed by Remarketing
Agent exceeds the amount of any damages which such Remarketing Agent has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls a Remarketing Agent within the meaning of Section 20 of the
1934 Act shall have the same rights to contribution as such Remarketing Agent,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. With respect to the Remarketing Agent and the
Standby Remarketing Agent, and in the event there is more than one Remarketing
Agent, their respective obligations to contribute pursuant to this Section 10
are several in proportion to the principal amount of Notes remarketed by each
such party and not joint.
Section 11. Termination of Remarketing Agreement.
(a) This Agreement shall terminate on the effective date of
the resignation or removal of the Remarketing Agent pursuant to Section 6
hereof.
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<PAGE> 21
(b) In addition, each of the Remarketing Agent and the
Standby Remarketing Agent may terminate all of its obligations under this
Agreement by notifying the Securities Depository and the other Remarketing
Agents, if any, of its election to do so, if any of the conditions referred to
or set forth in Section 8 hereof have not been met or satisfied in full and
such failure shall have continued for a period of 30 days after the Remarketing
Agent has given notice thereof to the Company and the other Remarketing Agents,
if any, specifying the condition which has not been met and requiring it to be
met; provided, however, that termination of this Agreement by the Remarketing
Agent or the Standby Remarketing Agent after giving the required notices shall
be immediate in the event of the occurrence and continuation of any event set
forth in Section 8(c) hereof, or in the event such party determines, in its
sole discretion, after consultation with the Company, that it shall not have
received all of the information necessary to enable it to fulfill its
obligations under this Agreement and applicable law.
Section 12. Remarketing Agent's Performance; Duty of Care.
The duties and obligations of each of the Remarketing Agent and the Standby
Remarketing Agent shall be determined solely by the express provisions of this
Remarketing Agreement and the Indenture. Neither the Remarketing Agent nor the
Standby Remarketing Agent shall be responsible for the acts or omissions of any
other party pursuant to this Agreement. No implied covenants or obligations of
or against the Remarketing Agent or the Standby Remarketing Agent shall be read
into this Remarketing Agreement or the Indenture. In the absence of bad faith
on the part of the Remarketing Agent or the Standby Remarketing Agent, such
party may conclusively rely upon any document furnished to it, which purports
to conform to the requirements of this Remarketing Agreement or the Indenture,
as to the truth of the statements expressed in any of such documents. Each of
the Remarketing Agent and the Standby Remarketing Agent shall be protected in
acting upon any document or communication reasonably believed by it to have
been signed, presented or made by the proper party or parties. Each of the
Remarketing Agent and the Standby Remarketing Agent shall incur no liability to
the Company or to any Beneficial Owner or Holder of Notes in its individual
capacity or as Remarketing Agent for any action or failure to act in connection
with a remarketing or otherwise, except as a result of gross negligence or
willful misconduct on its part.
Section 13. GOVERNING LAW. THIS REMARKETING AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
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<PAGE> 22
Section 14. Term of Agreement. Unless otherwise terminated
in accordance with the provisions hereof, this Agreement shall remain in full
force and effect from the date hereof until the first day thereafter on which
no Notes are outstanding. Regardless of any termination of this Agreement
pursuant to any of the provisions hereof, or any person entitled to
contribution to the extent provided in Section 11 hereof, the obligations of
the Company pursuant to Sections 5, 10 and 11 hereof shall remain operative and
in full force and effect until fully satisfied.
Section 15. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or delegated to any
other person without the prior written consent of each of the Remarketing
Agents. The rights and obligations of the Remarketing Agents hereunder may not
be assigned or delegated to any other person without the prior written consent
of the Company. This Agreement shall inure to the benefit of and be binding
upon the Company and each of the Remarketing Agent and the Standby Remarketing
Agent and their respective successors and assigns, and will not confer any
benefit upon any other person, partnership, association or corporation other
than persons, if any, controlling any Remarketing Agent within the meaning of
Section 20 of the 1934 Act, or any Indemnified Person to the extent provided in
Section 9 hereof, or any person entitled to contribution to the extent provided
in Section 10 hereof. The terms "successors" and "assigns" shall not include
any purchaser of any Notes merely because of such purchase.
Section 16. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be
used in the interpretation of any provisions of this Agreement.
Section 17. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.
Section 18. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded
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as an original and all of which shall constitute one and the same document.
Section 19. Remarketing Agents Not Acting as Underwriters.
It is understood and agreed by the parties hereto that the Remarketing Agent's
and the Standby Remarketing Agent's only obligations hereunder are as set forth
in Sections 4, 6, 7, 9 and 10 of this Agreement. When engaged in remarketing
any tendered Notes, the Remarketing Agent and the Standby Remarketing Agent
shall act only as agent for and on behalf of each Beneficial Owner of such
Notes so tendered. The Remarketing Agent shall not act as an underwriter for
the tendered Notes or in any way be obligated to advance its own funds to
purchase any tendered Notes (except if in its individual capacity as purchaser
of those Notes it elects, in accordance with Section 7 hereof, to purchase, in
its sole discretion to otherwise expend or risk its own funds) or incur or
become exposed to financial liability in the performance of its duties
hereunder.
Section 20. Amendments. This Agreement may be amended by any
instrument in writing signed by all of the parties hereto so long as this
Agreement as amended is not inconsistent with the Indenture in effect as of the
date of any such amendment.
Section 21. Notices. Unless otherwise specified, any
notices, requests, consents or other communications given or made hereunder or
pursuant hereto shall be made in writing and shall be deemed to have been
validly given or made when delivered or mailed, registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
(a) to the Company:
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention: Vice President and Treasurer
(b) to Remarketing Agent:
(c) to Standby Remarketing Agent:
or to such other address as the Company or the Remarketing Agents shall specify
in writing.
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IN WITNESS WHEREOF, the Company, the Remarketing Agent and the
Standby Remarketing Agent have each caused this Remarketing Agreement to be
executed in its name and on its behalf by one of its duly authorized officers
as of the date first above written.
APACHE CORPORATION
By_______________________________
Name:
Title:
_____________________________
_____________________________
By_______________________________
Authorized Signatory
_____________________________
By_______________________________
Authorized Signatory
<PAGE> 1
Exhibit 99.3
- -------------------------------------------------------------------------------
FIRST AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
dated as of April 14, 1995
among
APACHE CORPORATION
and
VARIOUS COMMERCIAL LENDING INSTITUTIONS,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent and Arranger
and
CHEMICAL BANK,
as Co-Agent and Arranger
- -------------------------------------------------------------------------------
<PAGE> 2
FIRST AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of April 14, 1995, (the "First Amendment"), is among APACHE
CORPORATION, a Delaware corporation (the "Company"), the various commercial
lending institutions as are or may become parties hereto (the "Lenders"), THE
FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent (in such capacity, the
"Administrative Agent") and Arranger (in such capacity, an "Arranger") and
CHEMICAL BANK, as Co-Agent (in such capacity, the "Co-Agent") and Arranger (in
such capacity, an "Arranger").
W I T N E S S E T H:
1. The Company, The First National Bank of Chicago, and Chemical
Bank are parties to that certain Third Amended and Restated Credit Agreement,
dated as of March 1, 1995 (the "Third Amended and Restated Credit Agreement").
2. The parties to the Third Amended and Restated Agreement intend
to amend it to add additional Lenders as parties to the Third Amended and
Restated Credit Agreement and to otherwise amend the Third Amended and Restated
Credit Agreement as follows:
I. AMENDMENTS TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT.
A. The definition of "Debt/Capitalization Ratio" appearing in
Section 1.1 of the Third Amended and Restated Credit Agreement is amended by
deleting the period at the end and adding the phrase "and the calculation of
facility fees." after the word "Spread".
B. The definition of "Interest Period" appearing in Section 1.1
of the Third Amended and Restated Credit Agreement is amended by deleting the
term "Closing Date" therefrom and adding the term "Effective Date" in lieu
thereof.
C. The definition of "Lenders" appearing in Section 1.1 of the
Third Amended and Restated Credit Agreement is hereby amended in its entirety
as follows:
"Lenders" means the financial institutions listed on the
signature pages of the First Amendment to Third Amended and Restated
Credit Agreement dated as of April 14, 1995 and their respective
successors and assigns in accordance with Section 17.3 (including any
commercial lending institution becoming a party hereto pursuant to an
Assignment Agreement) or otherwise by operation of law.
<PAGE> 3
D. Subsection 2.2(a) of the Third Amended Restated Credit
Agreement is Amended by deleting from the second sentence thereof the phrase
"delivered prior" and inserting the phrase "delivered immediately prior" in
lieu thereof.
E. Section 11.4 of the Third Amended and Restated Credit is
amended by deleting the period at the end and adding the phrase "(i) Contingent
Obligations of DEKALB in respect of the facility described as item 1 of Part B
of Schedule 11.1 or in respect of the replacement facility therefore described
as item 2 of Part B of Schedule 11.1." after the word "therefrom".
F. The last proviso of Section 11.7(c) of the Third Amended and
Restated Credit Agreement is amended by adding the phase "and its Subsidiaries"
after the name "DEKALB" appearing therein.
G. Part B of Schedule 11.1 of the Third Amended and Restated
Credit Agreement is hereby amended to read in its entirety as follows:
Indebtedness of DEKALB
1. $30 million (Can) revolving term credit facility of DEKALB
Energy Canada Ltd. with Royal Bank of Canada (approximately
$18 million (Can) outstanding as of March 1, 1995).
2. A revolving credit facility of DEKALB Energy Canada Ltd. up to
$30 million (U.S.) aggregate principal amount with a bank
chartered or licensed to operate in Canada, provided the debt
in item B.1. is paid in full and all obligations of DEKALB
Energy Canada Ltd. in connection therewith are terminated.
3. An overdraft facility of DEKALB Energy Canada Ltd. at Royal
Bank of Canada not to exceed $5 million (U.S.) in amount to
facilitate check clearing.
4. 10% Notes of DEKALB due April 15, 1998 (approximately $22.1
million (U.S.) in outstanding principal amount as of March 1,
1995).
5. 9 7/8% Notes of DEKALB due July 15, 2000 (approximately $29.2
million (U.S.) in outstanding principal amount as of March 1,
1995).
II. AGGREGATE AVAILABLE COMMITMENT. This will confirm that as of
the date hereof, the Aggregate Available Commitment is $881,000,000.
2
<PAGE> 4
III. EFFECTIVENESS. This First Amendment shall become effective as
of the date hereof when the Administrative Agent shall have received (a)
counterparts hereof duly executed by the Company, the Lenders, the
Administrative Agent and the Co-Agent (or, in the case of any party as to which
an executed counterpart shall not have been received, telegraphic, telex, or
other written confirmation from such party of execution of a counterpart hereof
by such party), (b) duly executed promissory notes substantially in the form of
Exhibits A-1 and A-2 to the Third Amended and Restated Credit Agreement payable
to the order of each Lender and (c) payment by each Lender (other than The
First National Bank of Chicago and Chemical Bank) of the amount shown in
Exhibit A to this First Amendment. Upon effectiveness of this First Amendment,
each Lender signatory to this First Amendment shall for all purposes be a
Lender party to the Third Amendment and Restated Credit Agreement as amended by
this First Amendment and any other Loan Documents executed by the Lenders and
shall have the rights and obligations of a Lender under the Loan Documents to
the same extent as if they were originally parties to the Third Amended and
Restated Credit Agreement, and no further consent or action by the Company, the
Lenders or the Agent shall be required and the Lenders (including The First
National Bank of Chicago and Chemical Bank) shall have the Commitment and
percentages set forth in Exhibit B hereto.
IV. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce
the Lenders, the Administrative Agent, the Co-Agent and the Arrangers to enter
into this First Amendment, the Company hereby reaffirms, as of the date hereof,
its representations and warranties in their entirety contained in Article VIII
of the Third Amended and Restated Credit Agreement and in all other documents
executed pursuant thereto (except to the extent such representations and
warranties relate solely to an earlier date) and additionally represents and
warrants as follows:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority, permits
and approvals, and is in good standing to conduct its business in each
jurisdiction in which its business is conducted.
(ii) The Company has the corporate power and authority and
legal right to execute and deliver this First Amendment and the Notes
and to perform its obligations hereunder and thereunder. The
execution and delivery by the Company of this First Amendment and the
Notes, and the performance of its obligations hereunder and thereunder
have been duly authorized by proper corporate proceedings, and this
First Amendment and the Third Amended and Restated Credit Agreement as
amended hereby constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance
3
<PAGE> 5
with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
(iii) No Default or Unmatured Default has occurred and is
continuing as of the date hereof.
(iv) There has been no material adverse change (a) in the
businesses, assets, properties, operations, condition (financial or
otherwise) or results of operations or prospects of the Company and
its Subsidiaries from March 1, 1995, (b) affecting the rights and
remedies of the Lenders under and in connection with this First
Amendment, the Third Amended and Restated Credit Agreement as amended
by this First Amendment, and the Notes or (c) in the ability of the
Company to perform its obligations under this First Amendment, the
Third Amended and Restated Credit Agreement as amended by this First
Amendment, or the Notes.
(v) There is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of
any of their officers threatened against or affecting the Company or
its Subsidiaries which is or could have a Material Adverse Effect.
V. DEFINED TERMS. Except as amended hereby, terms used herein
when defined in the Third Amended and Restated Credit Agreement shall have the
same meanings herein unless the context otherwise requires.
VI. REAFFIRMATION OF CREDIT AGREEMENT. This First Amendment shall
be deemed to be an amendment to the Third Amended and Restated Credit
Agreement, and the Third Amended and Restated Credit Agreement, as amended
hereby, is hereby ratified, approved and confirmed in each and every respect.
All references to the Third Amended and Restated Credit Agreement herein and in
any other document, instrument, agreement or writing shall hereafter be deemed
to refer to the Third Amended and Restated Credit Agreement as amended hereby.
VII. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
All obligations of the Company and rights of the Lenders, the Administrative
Agent, the Co-Agent and the Arrangers and any other holders of the Notes
expressed herein shall be in addition to and not in limitation of those
provided by applicable law.
VIII. SEVERABILITY OF PROVISIONS. Any provision in this First
Amendment that is held to be inoperative, unenforceable, or
4
<PAGE> 6
invalid in any jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of this First Amendment
are declared to be severable.
IX. COUNTERPARTS. This First Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
X. HEADINGS. Article and section headings in this First
Amendment are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of this First Amendment.
XI. SUCCESSORS AND ASSIGNS. This First Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
XII. NOTICE. THIS WRITTEN FIRST AMENDMENT TOGETHER WITH THE THIRD
AMENDED AND RESTATED CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
5
<PAGE> 7
IN WITNESS WHEREOF, the Company, the Lenders, the Administrative
Agent, the Co-Agent and the Arrangers have executed this First Amendment as of
the date first above written.
APACHE CORPORATION
By: /s/ Clyde E. McKenzie
--------------------------------
Name: Clyde E. McKenzie
Title: Vice President and Treasurer
Address: 2000 Post Oak Boulevard
Suite 100
Houston, TX 77056-4400
Attention: Clyde McKenzie
Vice President and Treasurer
Telephone: (713) 296-6210
Facsimile: (713) 296-6459
With a copy to:
Zurab S. Kobiashvili
Vice President and General Counsel
2000 Post Oak Boulevard, Suite 100
Houston, TX 77056-4400
Telephone: (713) 296-6000
Facsimile: (713) 296-6459
<PAGE> 8
THE FIRST NATIONAL BANK OF CHICAGO,
Individually, as Administrative
Agent and as Arranger
By: /s/ W. Walter Green
------------------------
Name: W. Walter Green
Title: Attorney-in-Fact
Address One First National Plaza
Chicago, IL 60670
Attention: W. Walter Green, III
Petroleum and Mining
Division, Suite 0363
Telephone: (312) 732-7235
Facsimile: (312) 732-3055
With a copy to:
Attention: Thomas E. Both
Syndications and
Placement/Agency
Suite 0353
Telephone: (312) 732-7268
Facsimile: (312) 732-2038
<PAGE> 9
CHEMICAL BANK, Individually, as Co-Agent
and as Arranger
By: /s/ Ronald Potter
---------------------------
Name: Ronald Potter
---------------------------
Title: Mananging Director
---------------------------
Address: 270 Park Avenue
Energy Portfolio,
10th Floor
New York, NY 10017
Attention:
------------------------
Telephone:
------------------------
Facsimile:
-----------------------
With a copy to:
Lori Vetters
Chemical Banking Corporation
707 Travis, 5th Floor North
Houston, TX 77002
Telephone: (713) 236-4332
Facsimile: (713) 236-4117
<PAGE> 10
BANK OF MONTREAL, Individually and as
Lead Manager
By: /s/ Shana L. Sloas
----------------------------
Name: Shana L. Sloas
----------------------------
Title: Director
----------------------------
Address: 700 Louisiana, Suite 4400
Houston, TX 77002
Attention: Robert L. Roberts
Telephone: (713) 546-9754
Facsimile: (713) 223-4007
<PAGE> 11
CIBC INC., Individually and as Lead
Manager
By: /s/ Gary C. Gaskill
-----------------------------
Name: Gary C. Gaskill
-----------------------------
Title: Vice President
-----------------------------
Address: Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attention: Credit Administration
Telephone: (404) 319-4999
Facsimile: (404) 319-4950
With a copy to:
909 Fannin, Suite 1200
Houston, TX 77010
Attention: Brian Swinford
Telephone: (713) 658-8400
Facsimile: (713) 658-9922
<PAGE> 12
NATIONSBANK, Individually and as Lead Manager
By: /s/ Melissa A. Bauman
----------------------------
Name: Melissa A. Bauman
Title: Vice President
Address: 901 Main Street
Dallas, TX 75202
Attention: Karen Dumond
Telephone: (214) 508-2513
Facsimile: (214) 508-1215
With a copy to:
Melissa A. Bauman
700 Louisiana Street, 8th Floor
Houston, TX 77002
Telephone: (713) 247-6830
Facsimile: (713) 247-6568
<PAGE> 13
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION
By: /s/ Laura B. Shepard
----------------------------------
Name: Laura B. Shepard
----------------------------------
Title: Vice President
----------------------------------
Address: 333 Clay Street, Suite 4550
Houston, TX 77002
Attention: Phyllis Tennard
-----------------------------
Telephone: (713) 651-4819
-----------------------------
Facsimile: (713) 651-4841
<PAGE> 14
BANQUE PARIBAS
By: /s/ Charles K. Thompson
----------------------------
Name: Charles K. Thompson
----------------------------
Title: Group Vice President
----------------------------
By: /s/ Francis Ballard
----------------------------
Name: Francis Ballard
----------------------------
Title: Vice President
----------------------------
Address: 787 7th Avenue
New York, NY 10019
Attention: Charles K. Thompson
------------------------
Telephone: (212) 841-2133
------------------------
Facsimile: (212) 841-2555
------------------------
<PAGE> 15
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Richard A. Erbert
----------------------------
Name: Richard A. Erbert
----------------------------
Title: Vice President
----------------------------
Address: 1111 Bagby, Suit 2020
Houston, TX 77002
Attention: Richard A. Erbert
Telephone: (713) 759-6318
Facsimile: (713) 650-0824
With a copy to:
2001 Ross Avenue, Suite 4800
Dallas, TX 75201
Attention: Loan Operations
Telephone: (214)
-----------------
Facsimile: (214) 754-0171
<PAGE> 16
MIDLAND BANK PLC, NEW YORK BRANCH
By: /s/ John A. Cleveland
-------------------------
Name: John A. Cleveland
------------------------
Title: Executive Director
------------------------
Address: 140 Broadway, 5th Floor
New York, NY 10005-1185
Attention: John A. Cleveland
Telephone: (212) 658-2702
Facsimile: (212) 658-2580
<PAGE> 17
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Philip W. McNeal
---------------------------
Name: Philip W. McNeal
---------------------------
Title: Vice President
---------------------------
Address: 60 Wall Street
New York, NY 10260
Attention:
-------------------------
Telephone: (212) 648-7181
Facsimile: (212) 648-5014
<PAGE> 18
ABN-AMRO BANK N.V. - HOUSTON AGENCY
By: /s/ Michael N. Oakes
---------------------------
Name: Michael N. Oakes
---------------------------
Title: Assistant Vice President
---------------------------
By: /s/ Kenneth S. Womack
---------------------------
Name: Kenneth S. Womack
---------------------------
Title: Assistant Vice President
---------------------------
Address: Three Riverway
Suite 1700
Houston, TX 77056
Attention: Michael N. Oakes
Telephone: (713) 964-3356
Facsimile: (713) 629-7533
<PAGE> 19
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Christopher C. Holmgren
Name: Christopher C. Holmgren
--------------------------------
Title: Vice President
--------------------------------
Address: 100 Federal Street
Boston, MA 02110
Attention: Michael Kane
Telephone: (617) 434-5358
Facsimile: (617) 434-3652
<PAGE> 20
THE BANK OF NOVA SCOTIA, SAN FRANCISCO
AGENCY
By: /s/ Norman O. Campbell
-----------------------------
Name: Norman O. Campbell
----------------------------
Title: Assistant Agent
----------------------------
Address: 101 California Street
48th Floor
San Francisco, CA 94111
Attention: Loan Administration
Telephone: (415) 986-1100
Facsimile: (415) 397-0791
With a copy to:
The Bank of Nova Scotia
Houston Representative Office
1100 Louisiana, Suite 3000
Houston, TX 77002
Attention: Mark A. Ammerman
Telephone: (713) 752-0900
Facsimile: (713) 752-2425
<PAGE> 21
THE CHASE MANHATTAN BANK, N.A.
By: /s/ Bettylou J. Robert
------------------------
Name: Bettylou J. Robert
------------------------
Title: Vice President
------------------------
Address: One Chase Manhattan Plaza
New York, NY 10081
Attention: Global Energy
Telephone: (212) 552-6362
Facsimile: (212) 552-1687
With a copy to:
Chase Manhattan Southwest
1221 McKinney, Suite 3000
Houston, TX 77010
Attention: Michael G. Long
Telephone: (713) 751-5660
Facsimile: (713) 751-9122
<PAGE> 22
CITIBANK, N.A.
By: /s/ Barbara A. Cohen
-------------------------
Name: Barbara A. Cohen
-------------------------
Title: Vice President
-------------------------
Address: 399 Park Avenue
12th Floor, Zone 21
New York, NY 10043
Attention:
-------------------------
Telephone:
-------------------------
Facsimile:
-------------------------
<PAGE> 23
THE FUJI BANK, LIMITED - HOUSTON AGENCY
By: /s/ Soichi Yoshida
----------------------------------
Name: Soichi Yoshida
----------------------------------
Title: Vice President & Senior Manager
----------------------------------
Address: One Houston Center
1221 McKinney, Suite 4100
Houston, TX 77010
Attention: Roger K. Frey
Telephone: (713) 650-7868
Facsimile: (713) 759-0048
<PAGE> 24
UNION BANK OF SWITZERLAND, HOUSTON AGENCY
By: /s/ Evans Swann
----------------------------
Name: Evans Swann
----------------------------
Title: Mananging Director
----------------------------
By: /s/ Dan O. Boyle
----------------------------
Name: Dan O. Boyle
----------------------------
Title: Vice President
----------------------------
Address: 1100 Louisiana, Suite 4500
Houston, TX 77002
Attention: Evans Swann
Telephone: (713) 655-6500
Facsimile: (713) 655-6555
<PAGE> 25
UNION BANK
By: /s/ Richard P. DeGrey
--------------------------
Name: Richard P. DeGrey
--------------------------
Title: Vice President
--------------------------
By: /s/ Yolande C. Hollis
--------------------------
Name: Yolande C. Hollis
--------------------------
Title: Vice President
--------------------------
Address: 445 South Figueroa Street
15th Floor
Los Angeles, CA 90071
Attention: Richard P. DeGrey, Jr.
Telephone: (213) 236-5731
Facsimile: (213) 236-4096
<PAGE> 26
CHRISTIANIA BANK OG KREDITKASSE
By: /s/ Debra Dickehuth
-------------------------
Name: Debra Dickehuth
-------------------------
Title: Vice President
-------------------------
By: /s/ Jahn O. Roising
-------------------------
Name: Jahn O. Roising
-------------------------
Title: First Vice President
-------------------------
Address: 11 West 42nd Street
New York, NY 10036
Attention: Deborah Dickehuth
Telephone: (212) 827-4836
Ffacsimile: (212) 827-4888
<PAGE> 27
COLORADO NATIONAL BANK
By: /s/ Kathryn A. Gardner
-------------------------
Name: Kathryn A. Gardner
-------------------------
Title: Vice President
-------------------------
Address: 950 Seventeenth Street
Denver, CO 80202
Attention: Monte Deckerd
Telephone: (303) 585-4212
Facsimile: (303) 585-4362
<PAGE> 28
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: /s/ Satoru Otsubo
---------------------
Name: Satoru Otsubo
----------------------
Title: Joint General Manager
----------------------
Address: 165 Broadway
New York, NY 10006
Attention: David Manheim
Telephone: (212) 335-4551
Facsimile: (212) 608-2371
With a copy to:
2200 Ross Avenue, Suite 4700 West
Dallas, TX 75201
Attention: Brian Myers
Telephone: (214) 969-5352
Facsimile: (214) 969-5357
<PAGE> 29
NBD BANK
By: /s/ George R. Schanz
------------------------
Name: George R. Schanz
------------------------
Title: Vice President
------------------------
Address: 611 Woodward Avenue
Detroit, MI 48226
Attention: George R. Schanz
Telephone: (313) 225-3191
Facsimile: (313) 225-2649
<PAGE> 30
ROYAL BANK OF CANADA, GRAND CAYMAN
(NORTH AMERICAN #1) BRANCH
By: /s/ Linda M. Stephens
--------------------------
Name: Linda M. Stephens
--------------------------
Title: Manager
--------------------------
Address: 600 Wilshire Blvd.
Suite 800
Los Angeles, CA 90017
Attention: Linda Stephens
Telephone: (213) 955-5347
Facsimile: (213) 955-5350
<PAGE> 31
EXHIBIT "A"
<TABLE>
<CAPTION>
AMOUNT PAYABLE TO
NAME OF LENDER ADMINISTRATIVE AGENT
- -------------- --------------------
<S> <C>
Bank of Montreal 34,800,000.00
CIBC Inc. 34,800,000.00
NationsBank 34,800,000.00
Bank of America 31,320,000.00
Banque Paribas 31,320,000.00
Societe Generale, Southwest Agency 31,320,000.00
Midland Bank plc, New York Agency 31,320,000.00
Morgan Guaranty Trust 31,320,000.00
Company of New York
ABN-AMRO Bank N.V. - 27,840,000.00
Houston Agency
The First National Bank 27,840,000.00
of Boston
The Bank of Nova Scotia 27,840,000.00
The Chase Manhattan Bank, N.A. 27,840,000.00
CitiBank, N.A. 27,840,000.00
The Fuji Bank, Limited - 27,840,000.00
Houston Agency
Union Bank of Switzerland 27,840,000.00
Union Bank 27,840,000.00
Christiania Bank og Kreditkasse 24,360,000.00
Colorado National Bank 24,360,000.00
LTCB Trust Company 24,360,000.00
NBD Bank 24,360,000.00
Royal Bank of Canada, 24,360,000.00
Grand Cayman (North
America #1) Branch
</TABLE>
<PAGE> 32
EXHIBIT "B"
<TABLE>
<CAPTION>
COMMITMENT
NAME OF LENDER $ MILLIONS PERCENTAGE
- -------------- ---------- ----------
<S> <C> <C>
The First National Bank
of Chicago (Administrative
Agent) $65 6.5%
Chemical Bank (Co-Agent) 65 6.5%
Bank of Montreal 50 5.0%
CIBC Inc. 50 5.0%
NationsBank 50 5.0%
Bank of America 45 4.5%
Banque Paribas 45 4.5%
Societe Generale,
Southwest Agency 45 4.5%
Midland Bank plc,
New York Agency 45 4.5%
Morgan Guaranty Trust
Company of New York 45 4.5%
ABN-AMRO Bank N.V. -
Houston Agency 40 4.0%
The First National Bank
of Boston 40 4.0%
The Bank of Nova Scotia 40 4.0%
The Chase Manhattan Bank,
N.A. 40 4.0%
CitiBank, N.A. 40 4.0%
The Fuji Bank, Limited -
Houston Agency 40 4.0%
Union Bank of Switzerland 40 4.0%
Union Bank 40 4.0%
Christiania Bank og
Kreditkasse 35 3.5%
Colorado National Bank 35 3.5%
</TABLE>
<PAGE> 33
<TABLE>
<S> <C> <C>
LTCB Trust Company 35 3.5%
NBD Bank 35 3.5%
Royal Bank of Canada,
Grand Cayman (North
America #1) Branch 35 3.5%
------ ----
TOTAL $1,000 100%
</TABLE>
<PAGE> 1
Exhibit 99.4
________________________________________________________________________________
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
dated as of October 23, 1995
among
APACHE CORPORATION
and
VARIOUS COMMERCIAL LENDING INSTITUTIONS,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent and Arranger
and
CHEMICAL BANK,
as Co-Agent and Arranger
________________________________________________________________________________
<PAGE> 2
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of October 23, 1995, (the "Second Amendment"), is among APACHE
CORPORATION, a Delaware corporation (the "Company"), the various commercial
lending institutions as are or may become parties hereto (the "Lenders"), THE
FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent (in such capacity, the
"Administrative Agent") and Arranger (in such capacity, an "Arranger") and
CHEMICAL BANK, as Co-Agent (in such capacity, the "Co-Agent") and Arranger (in
such capacity, an "Arranger").
W I T N E S S E T H:
1. The Company, the Lenders, the Arrangers, the Co-Agent and the
Administrative Agent have heretofore entered into that certain Third Amended
and Restated Credit Agreement, dated as of March 1, 1995, as previously amended
(the "Credit Agreement").
2. The Company, the Lenders, the Arrangers, the Co-Agent and the
Administrative Agent now intend to amend the Credit Agreement to permit the
Company to enter into a "Remarketed Note Program" and to address various issues
in connection therewith as follows:
I. Amendments to Third Amended and Restated Credit Agreement.
A. Section 1.1 of the Credit Agreement is hereby amended by
adding the following definition of "Remarketed Note Program" in the appropriate
alphabetical order:
"Remarketed Note Program" means that certain facility under
which the Company may issue and sell up to $250,000,000 in notes in
the manner therein described created pursuant to that certain Trust
Indenture, dated October ___, 1995, as may from time to time be
amended, supplemented, restated, reaffirmed or otherwise modified.
B. The definition of "Aggregate Available Commitment" appearing
in Section 1.1 of the Credit Agreement is hereby amended in its entirety to the
following:
"Aggregate Available Commitment" means, as of the time a
determination thereof is to be made, the lesser of (x) the Aggregate
Commitment, and (y) the sum of the Borrowing Base plus the then
effective Non-conforming Borrowing Base, as such Aggregate Available
Commitment shall be reduced from time to time pursuant to Section
2.3(a), (d), (e) or (f) or Section 4.2(d); provided, however, that,
except to the extent provided
<PAGE> 3
for in the proviso to subsection 2.1(b) hereof, the Aggregate
Available Commitment shall be deemed to be reduced by the aggregate
principal amount of such remarketed notes outstanding from time to
time under the Company's Remarketed Note Program.
C. Subsection 2.1(b) of the Credit Agreement is hereby amended in
its entirety to the following:
(a) Facility Amount. In no event may the aggregate
principal amount of all outstanding Loans (including both the
Revolving Loans and the Competitive Bid Loans) exceed the Aggregate
Available Commitment and no Lender shall be obligated to make any Loan
hereunder if, after giving effect to such Loan, the sum of the
aggregate outstanding principal amount of all Loans would exceed the
Aggregate Available Commitment (as then in effect after giving effect
to any increase in the Aggregate Available Commitment resulting from
the repayment of remarketed notes issued by the Company under the
Remarketed Note Program as a result of the operation of the following
proviso and after giving effect to any reductions thereof to be
effectuated on such day); provided that if the Company shall have
requested an Advance the proceeds of which will be used to repay
outstanding remarketed notes under the Remarketed Note Program, which
proceeds will be paid directly by the Administrative Agent to the
Trustee under the Remarketed Note Program for application on such
remarketed notes, so long as no Event of Default shall have occurred
and be continuing, the Aggregate Available Commitment shall not be
reduced pursuant to the proviso of the definition of Aggregate
Available Commitment to the extent of the amount so requested as an
Advance to repay principal amounts outstanding under such remarketed
notes.
D. Subsection 3.1(a) of the Credit Agreement is amended by
deleting from the first line thereof the word "noon" and inserting the phrase
"2:00 p.m. Chicago time" in lieu thereof.
E. Section 3.3 of the Credit Agreement is amended by deleting
from subsection (a) thereof the phrase "10:00 a.m. Chicago time" and inserting
the phrase "noon Chicago time" in lieu thereof.
F. Subsection 4.2(a) of the Credit Agreement is hereby amended in
its entirety to the following:
(a) Mandatory Prepayment on Account of Excess of
Outstandings Over Aggregate Available Commitment. In the event that
after giving effect to all other payments or prepayments required to
be made under this Section 4.2 on any Business Day the aggregate
outstanding principal
2
<PAGE> 4
amount of the Loans shall at any time exceed the Aggregate Available
Commitment, the Company shall within ninety (90) days make a mandatory
prepayment on the Loans in an amount equal to such excess together
with all interest accrued on the amount of such prepayment to the date
thereof; provided, however, notwithstanding the foregoing, in the
event that the Company shall issue remarketed notes under the
Remarketed Note Program on any day which causes the aggregate
outstanding principal amount of the Loans to exceed the Aggregate
Available Commitment as adjusted for the issuance of such remarketed
notes, the Company shall immediately, and in any event before 5:00
p.m., Chicago time, on such day, make a mandatory prepayment on the
Loans in an amount equal to the lesser of (i) the amount by which the
aggregate outstanding principal amount of the Loans exceeds the
Aggregate Available Commitment as adjusted for the issuance of such
remarketed notes or (y) the aggregate principal amount of such
remarketed notes issued on such day. Notwithstanding that the Company
shall have a 90-day period in which to make any mandatory prepayment
specified in this Section 4.2(a), (i) the Company shall not be
entitled to borrow Loans during such period without meeting the test
under Section 2.1(b) and (ii) the Company shall make all other
prepayments and payments required under or in connection with this
Agreement as required; provided, that for purposes of the foregoing
provisions of this sentence the conversion of an outstanding
Eurodollar Loan into a Floating Rate Loan during such period shall not
be deemed to be the borrowing of a Loan.
G. Section 11.1 of the Credit Agreement is hereby amended (a) by
deleting from subsection 11.1(h) the letter "(g)" from the second line thereof
and by replacing it with the letter "(h)"; (b) by relettering subsection
11.1(h) as subsection 11.1(i); and (c) by inserting the following after
subsection 11.1(g) thereof:
(h) Other Indebtedness of the Company relating to the
Remarketed Note Program up to a maximum amount of $250,000,000; and
H. Subsection 11.7(c) of the Credit Agreement is hereby amended
in its entirety to the following:
(a) the Company will not and will not permit any of its
Subsidiaries to make any optional payment or prepayment on, or
redemption of, or redeem, purchase or defease prior to its stated
maturity, any Indebtedness other than Indebtedness incurred under this
Agreement, the other Loan Documents, or the repurchase of any
remarketed notes under the Remarketed Note Program,
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Indebtedness of Offshore or Indebtedness evidenced by the
DEKALB Notes; provided with respect to Indebtedness of Offshore, that
the optional payment or prepayment be made with proceeds of the
facility described in item A.1 of Schedule 11.1; provided with respect
to Indebtedness of DEKALB evidenced by the DEKALB Notes, that the
optional payment or prepayment be made with proceeds of the facility
described in item B.1 or B.2 of Schedule 11.1, with cash on hand at
DEKALB or with proceeds of Investments permitted pursuant to Section
11.12(i); and provided that DEKALB may borrow, repay and reborrow
pursuant to the facilities described as item B.1, B.2 and B.3 of
Schedule 11.1;
I. Subsection 12.6(a) of the Credit Agreement is hereby amended
in its entirety to the following:
(a) Failure of the Company or any Subsidiary to pay any
Indebtedness (other than Limited Recourse Indebtedness of such Person)
in excess of $25,000,000 in aggregate principal amount when due; or
the default by the Company or any Subsidiary in the performance of any
term, provision or condition contained in any agreement under which
any such Indebtedness was created or is governed, the effect of which
is to cause, or to permit the holder or holders of such Indebtedness
to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of the Company or any Subsidiary
shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the stated
maturity thereof, provided that for purposes hereof any purchase by
the Company of remarketed notes under the Remarketed Note Program
pursuant to a special mandatory purchase resulting from a failed
remarketing of such remarketed notes shall not constitute a prepayment
prior to the stated maturity thereof; or the Company or any Subsidiary
shall not pay, or shall admit in writing its inability to pay, its
debts generally as they become due.
II. EFFECTIVENESS. This Second Amendment shall become effective
as of the date hereof when the Administrative Agent shall have received
counterparts hereof duly executed by the Company, the Lenders, the
Administrative Agent and the Co-Agent (or, in the case of any party as to which
an executed counterpart shall not have been received, telegraphic, telex, or
other written confirmation from such party of execution of a counterpart hereof
by such party).
III. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce
the Lenders, the Administrative Agent, the Co-Agent and the Arrangers to enter
into this Second Amendment, the Company hereby
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reaffirms, as of the date hereof, its representations and warranties in their
entirety contained in Article VIII of the Credit Agreement and in all other
documents executed pursuant thereto (except to the extent such representations
and warranties relate solely to an earlier date) and additionally represents
and warrants as follows:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority, permits
and approvals, and is in good standing to conduct its business in each
jurisdiction in which its business is conducted.
(ii) The Company has the corporate power and authority and
legal right to execute and deliver this Second Amendment and to
perform its obligations hereunder. The execution and delivery by the
Company of this Second Amendment and the performance of its
obligations hereunder have been duly authorized by proper corporate
proceedings, and this Second Amendment and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally.
(iii) No Default or Unmatured Default has occurred and is
continuing as of the date hereof.
(iv) There has been no material adverse change (a) in the
businesses, assets, properties, operations, condition (financial or
otherwise) or results of operations or prospects of the Company and
its Subsidiaries from March 1, 1995, (b) affecting the rights and
remedies of the Lenders under and in connection with this Second
Amendment and the Credit Agreement, as amended by this Second
Amendment, or (c) in the ability of the Company to perform its
obligations under this Second Amendment or the Credit Agreement, as
amended by this Second Amendment.
(v) There is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of
any of their officers threatened against or affecting the Company or
its Subsidiaries which is or could have a Material Adverse Effect.
IV. DEFINED TERMS. Except as amended hereby, terms used herein
when defined in the Credit Agreement shall have the same meanings herein unless
the context otherwise requires.
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V. REAFFIRMATION OF CREDIT AGREEMENT. This Second Amendment
shall be deemed to be an amendment to the Credit Agreement, and the Credit
Agreement, as amended hereby, is hereby ratified, approved and confirmed in
each and every respect. All references to the Credit Agreement herein and in
any other document, instrument, agreement or writing shall hereafter be deemed
to refer to the Credit Agreement as amended hereby.
VI. GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
All obligations of the Company and rights of the Lenders, the Administrative
Agent, the Co-Agent and the Arrangers and any other holders of the Notes
expressed herein shall be in addition to and not in limitation of those
provided by applicable law.
VII. SEVERABILITY OF PROVISIONS. Any provision in this Second
Amendment that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Second Amendment are
declared to be severable.
VIII. COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Second Amendment by
signing any such counterpart.
IX. HEADINGS. Article and section headings in this Second
Amendment are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of this Second Amendment.
X. SUCCESSORS AND ASSIGNS. This Second Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
XI. NOTICE. THIS WRITTEN SECOND AMENDMENT TOGETHER WITH THE THIRD
AMENDED AND RESTATED CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Company, the Lenders, the Administrative
Agent, the Co-Agent and the Arrangers have executed this Second Amendment as of
the date first above written.
APACHE CORPORATION
By: /s/ Clyde E. McKenzie
--------------------------------------------
Name: Clyde E. McKenzie
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF CHICAGO,
Individually, as Administrative Agent
and as Arranger
By: /s/ Christine Frank
--------------------------------------------
Name: Christine Frank
Title: Vice President
CHEMICAL BANK, Individually, as Co-Agent and
as Arranger
By: /s/ Edward L. Nelson
--------------------------------------------
Name: Edward L. Nelson
Title: M.D.
BANK OF MONTREAL, Individually and as Lead
Manager
By: /s/ Robert L. Roberts
--------------------------------------------
Name: Robert L. Roberts
Title: Director, U.S. Corporate
Banking
S-1
<PAGE> 9
CIBC INC., Individually and as Lead Manager
By: /s/ Gary C. Gaskill
--------------------------------------------
Name: Gary C. Gaskill
Title: Vice President
NATIONSBANK, Individually and as Lead Manager
By: /s/ Jo A. Tamalis
--------------------------------------------
Name: Jo A. Tamalis
Title: Senior Vice President
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION
By: /s/ Laura B. Shepard
--------------------------------------------
Name: Laura B. Shepard
Title: Vice President
BANQUE PARIBAS
By:
--------------------------------------------
Name:
Title:
By:
--------------------------------------------
Name:
Title:
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Paul E. Cornell
--------------------------------------------
Name: Paul E. Cornell
Title: First Vice President
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<PAGE> 10
MIDLAND BANK PLC, NEW YORK BRANCH
By: /s/ John A. Cleveland
--------------------------------------------
Name: John A. Cleveland
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Philip W. McNeal
--------------------------------------------
Name: Philip W. McNeal
Title: Vice President
ABN-AMRO BANK N.V. - HOUSTON AGENCY
By: /s/ Mike Oaks
--------------------------------------------
Name: Mike Oaks
Title: VP
By: /s/ Kenneth S. Womack
--------------------------------------------
Name: Kenneth S. Womack
Title: AVP
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Michael Kane
--------------------------------------------
Name: Michael Kane
Title: Managing Director
THE BANK OF NOVA SCOTIA, SAN FRANCISCO AGENCY
By:
--------------------------------------------
Name:
Title:
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<PAGE> 11
THE CHASE MANHATTAN BANK, N.A.
By:
-------------------------------------------
Name:
Title:
CITIBANK, N.A.
By: /s/ Arezoo Jafari
-------------------------------------------
Name: Arezoo Jafari
Title: Assistant Vice President
THE FUJI BANK, LIMITED - HOUSTON AGENCY
By:
-------------------------------------------
Name:
Title:
UNION BANK OF SWITZERLAND, HOUSTON AGENCY
By: /s/ Evans Swann
--------------------------------------------
Name: Evans Swann
Title: Managing Director
By: /s/ Dan O. Boyle
--------------------------------------------
Name: Dan O. Boyle
Title: Vice President
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<PAGE> 12
UNION BANK
By: /s/ Richard P. Degrey
--------------------------------------------
Name: Richard P. Degrey
Title: Vice President
By: /s/ Brett A. Challenger
--------------------------------------------
Name: Brett A. Challenger
Title: Assistant Vice President
CHRISTIANIA BANK OG KREDITKASSE
By: /s/ Jahn O. Roising
--------------------------------------------
Name: Jahn O. Roising
Title: First Vice President
By: /s/ Peter M. Dodge
--------------------------------------------
Name: Peter M. Dodge
Title: Vice President
COLORADO NATIONAL BANK
By: /s/ Monte E. Deckerd
--------------------------------------------
Name: Monte E. Deckerd
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: /s/ Satoru Otsubo
--------------------------------------------
Name: Saturo Otsubo
Title: Joint General Manager
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<PAGE> 13
NBD BANK
By: /s/ George R. Schanz
--------------------------------------------
Name: George R. Schanz
Title: Vice President
ROYAL BANK OF CANADA, GRAND CAYMAN
(NORTH AMERICAN #1) BRANCH
By: /s/ Linda M. Stephens
--------------------------------------------
Name: Linda M. Stephens
Title: Manager
S-6
