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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 18, 1998
APACHE CORPORATION
(Exact name of registrant as specified in Charter)
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DELAWARE 1-4300 41-0747868
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
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2000 POST OAK BOULEVARD
SUITE 100
HOUSTON, TEXAS 77056-4400
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (713) 296-6000
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ITEM 5. OTHER EVENTS
On June 26, 1998, Apache Corporation ("Apache") filed a Registration
Statement (the "Registration Statement") on Form S-3 (Registration No.
333-57785) with the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933, as amended (the "Act"). The Registration Statement,
which was declared effective by the SEC on July 6, 1998, covers one or more
series of unsecured senior debt securities and/or one or more series of
preferred stock, no par value, of Apache, for delayed or continuous offering
pursuant to Rule 415 under the Act for an aggregate initial offering price not
to exceed $500 million. Reference is made to the Registration Statement for
further information concerning the terms of such debt securities and/or
preferred stock and the offering thereof.
As described in the preliminary Prospectus Supplement dated August 17,
1998, to the Prospectus dated June 26, 1998, subject to entering into an
underwriting agreement, Apache expects to issue to Salomon Smith Barney (the
"Underwriter"), for offering to the public, a number of Depositary Shares (the
"Depositary Shares") each representing 1/10th of a share of _____% Cumulative
Preferred stock Series B, no par value per share ("Series B Preferred Stock").
As of the date of this amendment, the exact number of Depositary Shares and the
rate for the Series B Preferred Stock have not yet been finalized. The
Preliminary Prospectus Supplement dated August 17, 1998, to the Prospectus
dated June 26, 1998, is listed under Item 7 as Exhibit 99.1 and is incorporated
herein by reference.
The shares of Series B Preferred Stock will be issued under a
Certificate of Designations, Preferences and Rights, the form of which is
listed under Item 7 as Exhibit 4.1 and is incorporated herein by reference.
The issuance of the Depositary Shares to the Underwriter will be pursuant to a
Terms Agreement to be dated on or about August 20, 1998, and the Underwriting
Agreement Basic Terms incorporated by reference therein. The Underwriting
Agreement Basic Terms are listed under Item 7 as Exhibit 1.1 and are
incorporated herein by reference.
The shares of Series B Preferred Stock will be deposited with Norwest
Bank Minnesota, National Association (the "Depositary") under a Deposit
Agreement among Apache, the Depositary, and the holders from time of the
depositary receipts (the "Depositary Receipts") issued by the Depositary
thereunder. The Depositary Receipts will evidence the Depositary Shares. The
form of Preferred Stock Certificate and the form of Deposit Agreement,
including the form of Depositary Receipt, are listed under Item 7 as Exhibits
4.2 and 4.3, respectively, and are incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS.
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EXHIBIT NO. DESCRIPTION
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*1.1 Form of Underwriting Agreement Basic Terms, among Apache Corporation and the Underwriters.
**4.1 Form of Certificate of Designations, Preferences and Rights of Series B Preferred Stock.
**4.2 Form of Preferred Stock Certificate.
*4.3 Form of Deposit Agreement, with form of Depositary Receipt.
*23.1 Consent of general counsel relating to opinion of general counsel concerning Registration
Statement on Form S-3 (Reg. No. 333-57785).
***99.1 Preliminary Prospectus Supplement dated August 17, 1998, to Prospectus dated June 26, 1998.
*99.2 Statement of computation of ratio of earnings to combined fixed charges and preferred stock
dividends.
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_________________
* filed herewith
** to be filed by amendment
*** previously filed
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 on Form 8-K/A to be signed on
its behalf by the undersigned thereunto duly authorized.
APACHE CORPORATION
Date: August 19, 1998 /s/ Z. S. Kobiashvili
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Z. S. Kobiashvili
Vice President and General Counsel
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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*1.1 Form of Underwriting Agreement Basic Terms, among Apache Corporation and the Underwriters.
**4.1 Form of Certificate of Designations, Preferences and Rights of Series B Preferred Stock.
**4.2 Form of Preferred Stock Certificate.
*4.3 Form of Deposit Agreement, with form of Depositary Receipt.
*23.1 Consent of general counsel relating to opinion of general counsel concerning Registration
Statement on Form S-3 (Reg. No. 333-57785).
***99.1 Preliminary Prospectus Supplement dated August 17, 1998, to Prospectus dated June 26, 1998.
*99.2 Statement of computation of ratio of earnings to combined fixed charges and preferred stock
dividends.
</TABLE>
_________________
* filed herewith
** to be filed by amendment
*** previously filed
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EXHIBIT 1.1
APACHE CORPORATION
PREFERRED STOCK
UNDERWRITING AGREEMENT BASIC TERMS
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APACHE CORPORATION
Preferred Stock
UNDERWRITING AGREEMENT BASIC TERMS
Apache Corporation, a Delaware corporation (the "Company"), may issue
and sell from time to time its shares of preferred stock, no par value (the
"Preferred Stock"). Each issue of Preferred Stock may vary as to shares,
liquidation values, dividend rate or rates and timing of payments thereof,
redemption provisions, if any, conversion provisions, if any, and any other
variable terms as set forth in the Terms Agreement (as defined below) relating
thereto. The Preferred Stock may be represented by depositary shares (the
"Depositary Shares") pursuant to a deposit agreement (the "Deposit Agreement")
among the Company, Norwest Bank Minnesota, National Association (the
"Depositary"), and all holders from time to time of receipts issued thereunder.
Whenever the Company determines to make an offering of Preferred
Stock or Depositary Shares, as the case may be, the Company will enter into an
agreement (the "Terms Agreement") providing for the sale of such securities
(the "Offered Securities") to, and the purchase and offering thereof by, one or
more underwriters specified in the Terms Agreement (the "Underwriters", which
term shall include any Underwriters substituted pursuant to Section 10 hereof).
The Terms Agreement relating to the Offered Securities shall specify the names
of the Underwriters participating in such offering, the amount of Offered
Securities which each such Underwriter severally agrees to purchase, the price
at which the Offered Securities are to be purchased by the Underwriters from
the Company, the initial public offering price, the time and place of delivery
and payment, such other information as is indicated in Exhibit A hereto and
such other terms as are agreed by the Company and the Underwriters. In
addition, each Terms Agreement shall specify whether the Company has agreed to
grant to the Underwriters an option to purchase additional Offered Securities
to cover over-allotments, if any, and the number of Offered Securities subject
to such option described in Section 2(b) hereof (the "Option Securities"). As
used herein, the term "Offered Securities" shall include the Option Securities,
if any, and the number of firm shares of preferred stock or depositary shares
specified in the Terms Agreement (the "Firm Securities"); and "Representatives"
shall mean the Underwriter or Underwriters so specified in the Terms Agreement
or, if no Underwriter is so specified, shall mean each Underwriter. The Terms
Agreement may be in the form of an exchange of any standard form of written
telecommunication between the Underwriters and the Company. The offering of the
Offered Securities will be governed by the Terms Agreement, as supplemented
hereby (collectively, this "Agreement"), and this Agreement shall inure to the
benefit of and be binding upon each Underwriter participating in the offering
of the Offered Securities.
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The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-57785) for the registration of Preferred Stock and Depositary Shares,
including the Offered Securities, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), and has prepared and filed such amendments thereto as
may have been required to the date hereof. Such registration statement, as
amended, has been declared effective by the Commission. As provided in Section
3(a), a prospectus supplement reflecting the terms of the Offered Securities,
the terms of the offering thereof and the other matters set forth therein has
been prepared and will be filed pursuant to Rule 424 under the 1933 Act. Such
prospectus supplement, in the form first filed after the date of the Terms
Agreement pursuant to Rule 424, is herein referred to as the "Prospectus
Supplement". Such registration statement, as amended at the date of the Terms
Agreement, including the exhibits thereto and the documents incorporated by
reference therein, is herein called the "Registration Statement". Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The basic prospectus included in the
Registration Statement relating to all offerings of Preferred Stock under the
Registration Statement, as supplemented by the Prospectus Supplement, is herein
called the "Prospectus", except that, if such basic prospectus is amended or
supplemented on or prior to the date on which the Prospectus Supplement is
first filed pursuant to Rule 424, the term "Prospectus" shall refer to the
basic prospectus as so amended or supplemented and as supplemented by the
Prospectus Supplement or, if any revised prospectus shall be provided to the
Underwriters by the Company for their use in connection with the offering of
the Offered Securities which differs from such basic prospectus and Prospectus
Supplement (whether or not required to be filed by the Company pursuant to Rule
424), the term "Prospectus" shall refer to such revised prospectus (including
any prospectus supplement) from and after the time it is first provided to the
Underwriters for such use, in either case including the documents filed by the
Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), that are incorporated by reference therein.
SECTION 1. Representations and Warranties. The Company represents and
warrants to each Underwriter named in the Terms Agreement as of the date
thereof and as of the Closing Time referred to in Section 2(c) hereof, and as
of each Date of Delivery (if any) referred to in Section 2(b) hereof (in each
case, a "Representation Date"), as follows:
(a) 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 the State of 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
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results of operations, business affairs or business
prospects of the Company and its subsidiaries considered
as one enterprise.
(b) 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.
(c) At the time the Registration Statement and the Rule
462(b) Registration Statement, if any, became effective
and as of each Representation Date, the Registration
Statement and the Rule 462(b) Registration Statement, if
any, complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and
regulations of the Commission promulgated thereunder; the
Registration Statement and the Rule 462(b) Registration
Statement, if any, each 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 Commission 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 each Representation
Date, does not and will not include an untrue statement
of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made,
not misleading; provided, however, that the
representations and warranties in this subsection shall
not apply to statements in or omissions from the
Registration Statement and the Rule 462(b) Registration
Statement, if any, or the Prospectus made in reliance
upon and in conformity with information furnished to the
Company in writing by the Underwriters expressly for use
in the Registration Statement and the Rule 462(b)
Registration Statement, if any, or the Prospectus.
(d) The documents incorporated by reference in the
Prospectus, at the time they were or hereafter are filed
with the Commission, complied or when so filed will
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comply, as the case may be, in all material respects with
the requirements of the 1934 Act and the rules and
regulations of the Commission 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.
(e) The accountants who certified the financial
statements included or incorporated by reference in the
Registration Statement and the Prospectus are independent
public accountants with respect to the Company as
required by the 1933 Act and the 1933 Act Regulations.
(f) 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; the
supporting schedules included or incorporated by
reference in the Registration Statement and the
Prospectus present fairly the information required to be
stated therein; and the pro forma financial statements
and the related notes thereto, if any, included or
incorporated by reference in the Registration Statement
and the Prospectuses present fairly the information shown
therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro
forma financial statements and have been properly
compiled on the bases described therein, and the
assumptions used in the preparation thereof are
reasonable and the adjustments used therein are
appropriate to give effect to the transactions and
circumstances referred to therein.
(g) 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.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and, upon execution and delivery
by the Underwriters, will be valid and legally binding
agreement of the Company.
(i) In case the Offered Securities include Depositary
Shares, the Deposit Agreement has been duly authorized,
executed and delivered by the Company and assuming due
authorization, execution and delivery by the Depositary,
constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms except
as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and
by general equity principles.
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(j) The Company's authorized equity capitalization is as
set forth in the Prospectus; and the Preferred Stock, the
Depositary Shares, if any, and the Company's common stock
conform to the descriptions thereof contained in the
Prospectus.
(k) The Offered Securities have been duly and validly
authorized for issuance, offer and sale pursuant to this
Agreement and the applicable Terms Agreement and when
issued and delivered pursuant to the provisions of this
Agreement, the Deposit Agreement, if any, and the
applicable Terms Agreement against payment of the
consideration therefor, the Offered Securities will be
validly issued, fully paid and non-assessable, and the
issuance of such securities will not be subject to any
preemptive or similar rights
(l) Since the respective dates as of which information is
given in the Registration Statement, any Rule 462(b)
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.
(m) 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 Terms Agreement 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
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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 subsidiary thereof 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.
(n) 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 Offered Securities 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").
(o) 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 Terms
Agreement or any transaction contemplated hereby or
thereby.
(p) 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.
(q) 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 have 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 licenses or
authorizations or make such
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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.
(r) 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 the same
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.
(s) 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 (1) are described in the Prospectus, (2)
liens and encumbrances under operating agreements,
unitization and pooling agreements, production sales
contracts, farm-out agreements and other oil and gas
exploration and production 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 (3) those that do
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.
(t) 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 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.
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(u) 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").
(v) 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.
(w) Except as described in the Registration Statement,
(1) 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 (2) 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.
Any certificate signed by any director or officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company as to the matters covered
thereby.
SECTION 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Offered Securities pursuant to this Agreement shall be deemed to have been made
on the basis of the representations and warranties herein contained and shall
be subject to the terms and conditions herein and therein set forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the Terms Agreement, an option to the
Underwriters named in the Terms Agreement, severally and not jointly, to
purchase up to the number of Option Securities set forth therein at the same
price
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per share as is applicable to the Offered Securities plus accrued dividends, if
any. Such option, if granted, will expire 30 days after the date of the Terms
Agreement, and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Offered Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days and not
earlier than two full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined, unless otherwise
agreed upon by the Representatives and the Company. If the option is exercised
as to all or any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase the proportion of the total
number of Option Securities then being purchased that the number of Firm
Securities each such Underwriter has agreed to purchase, as set forth in the
Terms Agreement, bears to the total number of Firm Securities, subject to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of, the
Firm Securities to be purchased by the Underwriters shall be made at the place
set forth in the Terms Agreement, or at such other place as shall be agreed
upon by the Representatives and the Company, on the third business day (unless
postponed in accordance with the provisions of Section 10) following the date
of the Terms Agreement or such other time as shall be agreed upon by the
Underwriters and the Company (such time and date being referred to as the
"Closing Time"). Except as specified in the Terms Agreement, payment shall be
made to the Company by wire transfer in same day funds to the account of the
Company specified in the Terms Agreement against delivery to the Underwriters
for the respective accounts of the Underwriters of the Firm Securities to be
purchased by them. In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price
for, and delivery of certificates representing, such Option Securities shall be
made at such place as shall be agreed upon by the Representatives and the
Company, on each Date of Delivery as agreed by the Representatives and the
Company. The Firm Securities shall be in such denominations and registered in
such names as the Underwriters may request in writing at least two business
days prior to the Closing Time or relevant Date of Delivery, as the case may
be. The Firm Securities and the Option Securities, if any, will be made
available for examination and packaging by the Representatives on or before the
first business day prior to the Closing Time or relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of the Terms
Agreement, the Company will prepare a Prospectus
Supplement in form approved by the Representatives
setting forth the number, class and designation of
Offered Securities, the names of the Underwriters and the
number of the Offered Securities which each severally has
agreed to purchase, the names of the Underwriters, the
price at which the Offered Securities are to be purchased
by the Underwriters from the Company, the initial public
offering price, the selling concession and reallowance,
if any,
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<PAGE> 11
any Option Securities, and such other information as the
Representatives and the Company deem appropriate in
connection with the offering of the Offered Securities.
The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing
pursuant to Rule 424 of the 1933 Act Regulations and will
furnish to the Underwriters named therein as many copies
of the Prospectus (including the Prospectus Supplement)
as the Representatives shall reasonably request.
(b) If at any time when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the
Offered Securities any event shall occur or condition
exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters 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 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 the Prospectus comply with such
requirements.
(c) 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 Offered Securities.
(d) While the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Offered
Securities, the Company will give the Representatives
notice of its intention to file any additional
registration statement with respect to the registration
of additional Preferred Stock, any amendment to the
Registration Statement (including any filing under Rule
462(b)) or any amendment or supplement to the Prospectus,
whether pursuant to the 1934 Act, the 1933 Act or
otherwise; will furnish the Underwriters with copies of
any such amendment or supplement or other documents
proposed to be filed 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 Representatives or counsel to the
Underwriters reasonably object.
(e) While the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Offered
Securities, the Company will notify the Representatives
immediately, and promptly confirm the notice in writing,
of (i)
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<PAGE> 12
the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for
filing of any supplement to the Prospectus or any
document to be filed pursuant to the 1934 Act which will
be incorporated by reference into the Registration
Statement or the Prospectus, (iii) the receipt of any
comments from the Commission with respect to the
Registration Statement, the Prospectus or the Prospectus
Supplement, (iv) any request by the Commission for any
amendment to the Registration Statement, or any amendment
or supplement to the Prospectus or for additional
information, (v) the issuance by the Commission 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.
(f) The Company will deliver to each Underwriter one
conformed 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
Representatives as many conformed copies of the
Registration Statement as originally filed and of each
amendment thereto (without exhibits) as the
Representatives may reasonably request. While the
Prospectus is required by the 1933 Act to be delivered in
connection with sales of the Offered Securities, the
Company will furnish to the Representatives as many
copies of the Prospectus (including the Prospectus
Supplement) as the Representatives reasonably request.
(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Offered Securities for
offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States
as the Underwriters may designate, and will maintain such
qualifications in effect for as long as may be required
for the distribution of the Offered Securities; provided,
however, that the Company shall not be obligated to file
any general consent to service of process or to qualify
as a foreign corporation 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 Offered Securities have
been qualified as above provided. The Company will
promptly advise the Representatives of the receipt by the
Company of any notification with respect to the
suspension of the qualification of the Offered Securities
for sale in any such state or jurisdiction or the
initiating or threatening of any proceeding for such
purpose.
(h) 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 Offered Securities,
will file all documents required to be filed with the
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<PAGE> 13
Commission 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.
(i) If specified in the Terms Agreement, between the date
of the Terms Agreement and the completion of the
distribution of the Offered Securities or the Closing
Time, whichever is later, or such other time as is
specified in the Terms Agreement, the Company will not,
without the prior written consent of the Representatives,
offer or sell, grant any option for the sale of, or enter
into any agreement to sell, any securities of the Company
substantially similar to the Offered Securities (other
than the Offered Securities that are to be sold pursuant
to such agreement).
SECTION 4. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase Offered Securities pursuant to this Agreement
are subject to the accuracy of the representations and warranties on the part
of the Company herein contained, to the accuracy of the statements which the
Company's officers made in any certificate furnished pursuant to the provisions
hereof, to the performance by the Company of all of its covenants and other
obligations hereunder and under the Terms Agreement, and to the following
further conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement or any Rule
462(b) Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
(b) At the Closing Time, the Representatives shall have
received:
(1) The favorable opinion, dated as of the
Closing Time, 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 and the Terms Agreement
have been duly authorized, executed and delivered by the
Company.
(iii) The Offered Securities have been duly
authorized for issuance, offer and sale pursuant to this
Agreement and the applicable Terms Agreement and, when
issued, authenticated and delivered pursuant to the
provisions of this Agreement, the Deposit Agreement and
the applicable Terms Agreement against payment of the
consideration therefor, will be validly issued, fully
paid and non-assessable, and the issuance of such Offered
Securities will not be subject to any preemptive or
similar rights.
(iv) The Offered Securities conform in all
material respects to the statements relating thereto in
the Prospectus; and the statements in the Prospectus
under the captions "Description of Preferred Stock, "
"Description of Depositary Shares" and "Description of
Capital Stock", insofar as they purport to summarize
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<PAGE> 14
certain provisions of documents specifically referred to
therein, are accurate summaries of such provisions.
(v) The Registration Statement, including
any Rule 462(b) Registration Statement, has been declared
effective by the Commission under the 1933 Act and, to
the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has
been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(vi) The execution and delivery of this
Agreement and the Terms Agreement, the issuance of
Offered Securities covered by the Terms Agreement, the
incurrence of the obligations set forth herein and
therein, and the consummation of the transactions herein
and therein contemplated do not and will not conflict
with or constitute or result in a breach of, or default
under, the certificate of incorporation or by-laws, each
as in effect at the applicable Closing Time, of the
Company.
(vii) In case the Offered Securities include
Depositary Shares, the Deposit Agreement has been duly
authorized, executed and delivered by the Company and
assuming due authorization, execution and delivery by the
Depositary, constitutes a valid and legally binding
obligation of the Company enforceable in accordance with
its terms except as enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights
generally and by general equity principles.
(viii) The Company's authorized equity
capitalization is as set forth in the Prospectus.
(ix) The Registration Statement, including any
Rule 462(b) Registration Statement, and the Prospectus
(except for financial statements and engineering reports
and other financial or engineering data, 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 caption "Certain United States
Federal Income Tax 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 (i) 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 and (ii) as to the laws of
the State of New York applicable to the enforceability of
the Deposit Agreement upon the opinion of Brown & Wood
LLP. Such opinion shall be
14
<PAGE> 15
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 and the Terms 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 the State of 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, pledge, lien,
encumbrance, claim or equity (except as described in the
Prospectus).
(iv) In case the Offered Securities include
Depositary Shares, the Deposit Agreement has been duly
authorized, executed and delivered by the Company and
assuming due authorization, execution and delivery by the
Depositary, constitutes a valid and legally binding
obligation of the Company enforceable in accordance with
its terms except as enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights
generally and by general equity principles.
(v) The Company's authorized equity
capitalization is as set forth in the Prospectus; and the
Preferred Stock, the Depositary Shares, if any, and the
Company's common stock conform to the descriptions
thereof contained in the Prospectus.
15
<PAGE> 16
(vi) The Offered Securities have been duly
and validly authorized for issuance, offer and sale
pursuant to this Agreement and the applicable Terms
Agreement and when issued and delivered pursuant to the
provisions of this Agreement, the Deposit Agreement, if
any, and the applicable Terms Agreement against payment
of the consideration therefor, the Offered Securities
will be validly issued, fully paid and non-assessable,
and the issuance of such securities will not be subject
to any preemptive or similar rights,
(vii) 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 its face
to be appropriately responsive when so filed to the
requirements of the 1934 Act and the 1934 Act
Regulations.
(viii) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940
Act.
(ix) 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, 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 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.
(x) Neither the Company nor any of its
Significant Subsidiaries is in violation of its charter
or by-laws.
(xi) 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 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
16
<PAGE> 17
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 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 authorizations 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.
(xii) 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 and the Terms Agreement or
any transaction contemplated hereby or thereby.
(xiii) 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 operations,
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, the laws of the State of Texas
and the laws of the United States of America.
(3) The favorable opinion, dated as
of the Closing Time, of Brown & Wood LLP, counsel for the
Underwriters, with respect to the matters set forth in clauses (i) to
(v), inclusive, and (ix) of subsection (b)(1) of this Section.
(4) In giving their opinions required
by subsection (b)(1), (b)(2) and (b)(3), respectively, of this
Section 4, Woodard, Hall & Primm, P.C., Zurab S.
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<PAGE> 18
Kobiashvili and Brown & Wood LLP 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 the
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 to
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 Commission
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), contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus or any
amendment or supplement thereto, at the time the Prospectus was
issued at the time any such amendment or supplement was issued or, at
the Closing Time 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 the Registration Statement
(including the Prospectus)).
(c) At the Closing Time, there shall not have
been, since the date of the Terms Agreement or since the
respective dates as of which information is given in the
Registration Statement and 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, and the Representatives
shall have received a certificate of the Chief Executive
Officer, President or a Vice President and the Treasurer,
the Assistant Treasurer, the principal financial officer
or principal accounting officer of the Company, dated as
of the Closing Time, to the effect that (i) there has
been no such material adverse change with respect to the
Company and its subsidiaries, (ii) the representations
and warranties of the Company contained in Section 1 are
true and correct as of the Closing Time, (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 and
(iv) no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration
Statement has been issued and no proceedings for that
purpose have been initiated
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<PAGE> 19
or threatened by the Commission. As used in this Section
4(c), the term "Prospectus" means the Prospectus in the
form first provided to the applicable Underwriter or
Underwriters for use in confirming sales of the Offered
Securities.
(d)(1) On the date of the Terms Agreement, the
Underwriters shall have received a letter from Arthur
Andersen LLP, dated as of the date thereof and in form
and substance satisfactory to the Underwriters, 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) 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
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 the 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 the 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 the 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 the 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
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<PAGE> 20
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 the Prospectus disclose have occurred or may occur or
except for such exceptions enumerated in such letter as
shall have been agreed to by the Underwriters 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.
(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 Underwriters,
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.
(2) At the Closing Time, the
Underwriters shall have received from Arthur Andersen
LLP, a letter, dated as of the Closing Time, to the
effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d)(1) of this
Section, except that the specified date referred to shall
be a date not more than three days prior to the Closing
Time.
(e) At the Closing Time, counsel for the Underwriters
shall have been furnished with such documents and
opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of
the Offered Securities 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 the
Offered Securities as herein and in the Terms Agreement
contemplated shall be satisfactory in form and substance
to the Representatives.
(f) In the event that the Terms Agreement provides for
Option Securities and the Underwriters exercise their
option pursuant to Section 2(b) hereof to purchase all or
any portion of the Option Securities, the representations
and warranties of the Company contained herein and the
statements in any certificates furnished by the
20
<PAGE> 21
Company hereunder shall be true and correct as of each
Date of Delivery, and the Underwriters shall have
received:
(1) Unless the Date of Delivery is the Closing
Time, a certificate, dated such Date of Delivery, of the Chief
Executive Officer, President or a Vice President and the Treasurer,
the Assistant Treasurer, the principal financial officer or principal
accounting officer of the Company, in their capacities as such,
confirming that the certificate delivered at the Closing Time
pursuant to Section 4(c) hereof remains true and correct as of such
Date of Delivery.
(2) The favorable opinion of Woodard, Hall &
Primm, P.C., counsel for the Company, and Zurab S. Kobiashvili,
General Counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise substantially to the
same effect as the opinions required by subsections (1) and (2) of
Section 4(b) hereof.
(3) The favorable opinion of Brown & Wood LLP,
counsel for the Underwriters, dated such Date of Delivery, relating
to the Option Securities and otherwise to the same effect as the
opinion required by subsection (3) to Section 4(b) hereof.
(4) Unless the Date of Delivery is the Closing
Time, a letter from Arthur Andersen LLP, in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished
to the Underwriters at the Closing Time pursuant to Section 4(d)
hereof, except that the "specified date" in the letter shall be a
date not more than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representatives by notice to the Company at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party except as provided in Section 5.
SECTION 5. 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, including any Rule 462(b)
Registration Statement, and all amendments thereto and
the Prospectus and any amendments or supplements thereto;
(b) the preparation, filing and reproduction of
this Agreement;
(c) the preparation, printing, issuance and
delivery of the Offered Securities, including any stock
or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the
Offered Securities;
(d) the fees and disbursements of the Company's
accountants and its counsel;
21
<PAGE> 22
(e) except as otherwise provided in the Terms
Agreement, the reasonable fees and disbursements of
counsel to the Underwriters;
(f) the qualification of the Offered Securities
under state securities laws in accordance with the
provisions of Section 3(k) hereof, including filing fees
and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky or Legal
Investment Survey;
(g) the printing and delivery to the Underwriters
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 Underwriters of the Prospectus
and any amendments or supplements thereto in connection
with solicitations or confirmations of sales of the
Offered Securities;
(h) all fees and disbursements of any transfer
and paying agent;
(i) any fees charged by nationally recognized
statistical rating organizations for the rating of the
Offered Securities;
(j) the fees and expenses incurred in connection
with any listing of Offered Securities 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 out-of-pocket expenses of the
Underwriters incurred with the approval of the Company;
and
(m) the cost of providing any CUSIP or other
identification numbers for the Offered Securities.
If this Agreement is terminated by the Underwriters in accordance
with the provisions of Section 9, the Company shall reimburse the Underwriters
for all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act 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 any Rule
462(b) Registration Statement, 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
22
<PAGE> 23
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, 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
Underwriter 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 Underwriter),
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 (x) the
Company is required to do so under Section 6(c) below and (y) that
any such expense is not paid under (i) or (ii) above.
(b) Each Underwriter 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), any Rule 462(b) Registration Statement or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter expressly for use in the Registration
Statement (or any amendment thereto), any Rule 462(b) Registration Statement or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) 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
23
<PAGE> 24
the defense thereof other than reasonable costs of investigation; provided,
however, that each Underwriter shall have the right to employ counsel to
represent jointly the Underwriters 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 Underwriters against the Company under this
Section if, in the judgment of any of the Underwriters, it is advisable for
such Underwriter or Underwriters 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 6 or Section 7 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) For purposes of this Section 6, 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 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Offered Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Offered
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Offered Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total commission or underwriting discount
received by each Underwriter, in each case as set forth on the cover of the
Prospectus Supplement, bear to the aggregate initial public offering price of
the Offered Securities sold to or through such Underwriter as set forth on such
cover. The relative fault of the Company on the one hand and the Underwriters
on the other
24
<PAGE> 25
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 Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Offered Securities sold to or through such Underwriter were offered to the
public exceeds the amount of any damages which such Underwriter 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 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the principal amount of Offered Securities sold to
or through each Underwriter and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person of an Underwriter, or by or on behalf of the Company, and
shall survive each delivery of and payment for any Offered Securities.
SECTION 9. Termination.
(a) The Representatives may terminate this Agreement immediately upon
notice to the Company, at any time at or prior to the Closing Time if (i) there
has been, since the date of the Terms Agreement or since the respective dates
as of which information is given in the Registration Statement, 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 which is such as to make it, in the judgment of the
25
<PAGE> 26
Representatives, impracticable to market the Offered Securities or enforce
contracts for the sale of the Offered Securities, or (iii) trading in any
securities of the Company has been suspended by the Commission 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
Commission 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 Offered Securities 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 the Terms 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 the Representatives 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 the Offered Securities, 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 9, the term "Prospectus" means the Prospectus in the form first
provided to the applicable Underwriter or Underwriters for use in confirming
sales of the related Offered Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 5. Notwithstanding any such termination, (i)
the covenants set forth in Section 3(b), (d), and (e) with respect to any
offering of Offered Securities shall remain in effect so long as any
Underwriter owns any such Offered Securities purchased from the Company
pursuant to this Agreement and during the period when the Prospectus is
required to be delivered in connection with sales of the Offered Securities and
(ii) the covenants set forth in Section 3(c), (g), (h) and, if applicable, (i),
the provisions of Section 5, the indemnity agreement set forth in Section 6,
the contribution provisions set forth in Section 7 and the provisions of
Sections 8, 11, 12 and 13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters shall fail at
the Closing Time or a Date of Delivery to purchase the Firm Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), then the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth. If, however, during such 24 hours the
Representatives shall not have completed such arrangements for the purchase of
all of the Defaulted Securities, then:
(a) if the amount of Defaulted Securities does
not exceed 10% of the amount of Firm Securities to be
purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the
proportions that their respective underwriting
obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
26
<PAGE> 27
(b) if the amount of Defaulted Securities exceeds
10% of the number of Firm Securities to be purchased on
such date, this Agreement or, with respect to any Date of
Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the
Company to sell the Option Securities to be purchased and
sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the Representatives or the
Company shall have the right to postpone the Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or the Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing, either delivered by hand, by mail or by telex, telecopier
or telegram, and any such notice shall be effective when received at the
address specified in this Section 11. Notices to the Underwriters shall be
directed as provided in the Terms Agreement. Notices to the Company shall be
directed to Apache Corporation, 2000 Post Oak Boulevard, Suite 100, Houston,
Texas 77056-4400, Attention: Vice President and Treasurer, with a copy to:
Ralph K. Miller, Jr., Woodard, Hall & Primm, P.C., 7100 Chase Tower, Houston,
Texas 77002. Any party to this Agreement may from time to time designate
another address to receive notice pursuant to this Agreement by notice duly
given in accordance with the terms of this Section 11.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Offered Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
27
<PAGE> 28
SECTION 13. Governing Law. This Agreement and all the rights and
obligations of the parties hereto 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 14. Counterparts. Any Terms Agreement may be executed in one
or more counterparts and, if executed in more than one counterpart, the
executed counterparts thereof shall constitute a single instrument.
28
<PAGE> 29
EXHIBIT A
TERMS AGREEMENT
Preferred Stock
___________ __, 19__
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention: [Title]
Dear Sirs:
The undersigned underwriters (the "Underwriters") understand that
Apache Corporation (the "Company") proposes to issue and sell [number of]
shares of its preferred stock, no par value (the "Offered Securities"). Subject
to the terms and conditions set forth herein or incorporated by reference
herein, the Underwriters offer to purchase, severally and not jointly, the
number of Offered Securities set forth below opposite their respective names at
$___ per share together with accrued dividend thereon from __________, 19__ to
the Closing Time:
<TABLE>
<CAPTION>
Number of
Underwriter Firm Securities
------------ ---------------
<S> <C>
------------------
Total
==================
</TABLE>
The Offered Securities shall have the following terms:
Title of Offered Securities:
Number of Firm Securities to be issued:
Maximum number of Option Securities to be issued:
Current ratings:
Dividend rate:
Redemption provisions:
Conversion provision, if any:
Initial price to public:
29
<PAGE> 30
Underwriting Commission:
Purchase price
Closing Time:
Place of delivery and payment:
Company account for wire transfer of payment:
Lock-up pursuant to Section 3(i) of the
Underwriting Agreement Basic Terms: [yes] [no]
Securities Exchanges, if any, on which application will be made to list the
Offered Securities:
Other terms, if any:
All the provisions contained in "Apache Corporation-Preferred
Stock--Underwriting Agreement Basic Terms" (the "Basic Terms"), filed as an
exhibit to the Registration Statement relating to the Offered Securities and
attached hereto as Annex A, are herein incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined
in such document are used herein as therein defined.
Any notice by the Company to the Underwriters pursuant to this Terms
Agreement shall be sufficient if given in accordance with Section 11 of the
Basic Terms addressed to: [insert name and address of the lead manager or
managers or, if only one underwriter is a party hereto, of such firm] which
shall, for all purposes of this Agreement, be the "Representatives".
Very truly yours,
REPRESENTATIVE[S]
[Acting for themselves and as
Representative[s] of the Underwriters]
Accepted:
APACHE CORPORATION
By:
-----------------------------------------------
Title:
30
<PAGE> 31
ANNEX A
[Apache Corporation--Preferred Stock--
Underwriting Agreement Basic Terms]
31
<PAGE> 1
EXHIBIT 4.3
APACHE CORPORATION
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
------------
DEPOSIT AGREEMENT
------------
Dated as of August ____, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
"Certificate of Designation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Certificate of Incorporation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Corporate Office" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Deposit Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Depositary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Depositary Share" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Depositary's Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Receipt" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"record holder" or "holder" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER
AND REDEMPTION AND REPURCHASE OF RECEIPTS
SECTION 2.01 Form and Transfer of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.02 Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof . . . . . . . . . . . 3
SECTION 2.03 Redemption and Repurchase of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.04 Register of Transfer of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.05 Combination and Split-ups of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.06 Surrender of Receipts and Withdrawal of Stock . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.07 Limitations on Execution and Delivery, Transfer, Split-up, Combination and
Surrender of Receipts and Withdrawal or Deposit of Stock . . . . . . . . . . . . . . 7
SECTION 2.08 Lost Receipts, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.09 Cancellation and Destruction of Surrendered Receipts . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.01 Filing Proofs, Certificates and Other Information . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.02 Payment of Taxes or Other Governmental Charges . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.03 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.04 Representations and Warranties as to Stock . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01 Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.02 Distributions Other Than Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.03 Subscription Rights, Preferences or Privileges . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.04 Notice of Dividends, Fixing of Record Date for Holders of Receipts . . . . . . . . . . . . 10
SECTION 4.05 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.06 Changes Affecting Stock and Reclassifications, Recapitalizations, etc. . . . . . . . . . . 11
SECTION 4.07 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.08 Lists of Receipt Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01 Maintenance of Offices, Agencies, Transfer Books by the Depositary;
the Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.02 Prevention or Delay in Performance by the Depositary, the Depositary's
Agents, the Registrar or the Company . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.03 Obligations of the Depositary, the Depositary's Agents, the Registrar
and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.04 Resignation and Removal of the Depositary, Appointment of
Successor Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.05 Corporate Notices and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.06 Deposit of Stock by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.07 Indemnification by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.08 Fees, Charges and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.02 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.02 Exclusive Benefits of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.03 Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 7.05 Depositary's Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 7.06 Holders of Receipts Are Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 7.07 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 7.08 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
EXHIBIT A
</TABLE>
iii
<PAGE> 5
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of August ___, 1998, among Apache
Corporation, a Delaware corporation, Norwest Bank Minnesota, National
Association, as Depositary, and all holders from time to time of Receipts
issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide as hereinafter set forth in
this Deposit Agreement, for the deposit of shares of the Stock with the
Depositary, as agent for the beneficial owners of the Stock, for the purposes
set forth in this Deposit Agreement and for the issuance hereunder of the
Receipts evidencing Depositary Shares representing an interest in the Stock so
deposited; and
WHEREAS, the Receipts are to be substantially in the form annexed as
Exhibit A to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:
"Certificate of Designation" shall mean the Certificate of
Designations, Preferences and Rights establishing and setting forth the rights,
preferences, privileges and limitations of the Stock, as filed with the
Secretary of State of the State of Delaware.
"Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation, as amended and restated from time to time, of the Company.
"Company" shall mean Apache Corporation, a Delaware corporation, and
its successors.
"Corporate Office" shall mean the office of the Depositary in South
St. Paul, Minnesota, at which at any particular time its business in respect of
matters governed by this Deposit Agreement shall be administered, which at the
date of this Deposit Agreement is located at 161 North Concord Exchange, South
St. Paul, Minnesota 55075.
"Deposit Agreement" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time.
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"Depositary" shall mean Norwest Bank Minnesota, National Association,
as Depositary hereunder, and any successor as Depositary hereunder.
"Depositary Share" shall mean the rights evidenced by the Receipts
executed and delivered hereunder, including the interests in Stock granted to
holders of Receipts pursuant to the terms and conditions of the Deposit
Agreement. Each Depositary Share shall represent an interest in one-tenth
(1/10) of one share of Stock deposited with the Depositary hereunder and the
same proportionate interest in any and all other property received by the
Depositary in respect of such share of Stock and held under this Deposit
Agreement. Subject to the terms of this Deposit Agreement, each record holder
of a Receipt evidencing a Depositary Share or Shares is entitled,
proportionately, to all the rights, preferences and privileges of the Stock
represented by such Depositary Share or Shares, including the dividend,
redemption, voting and liquidation rights contained in the Certificate of
Designation, and to the benefits of all obligations and duties of the Company
in respect of the Stock under the Certificate of Designation and the
Certificate of Incorporation.
"Depositary's Agent" shall mean an agent appointed by the Depositary
as provided, and for the purposes specified, in Section 7.05.
"Receipt" shall mean a Depositary Receipt executed and delivered
hereunder, in substantially the form of Exhibit A hereto, evidencing a
Depositary Share or Shares, as the same may be amended from time to time in
accordance with the provisions hereof.
"record holder" or "holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books maintained by or on
behalf of the Depositary for such purpose.
"Registrar" shall mean any company appointed to register ownership and
transfers of Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of the Company's ______% Cumulative
Preferred Stock, Series B, no par value per share.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER
AND REDEMPTION AND REPURCHASE OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts. Receipts shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Receipts shall be executed by the Depositary by the
manual signature of a duly authorized officer of the Depositary; provided,
however, that such signature may be a facsimile if a Registrar (other than the
Depositary) shall have countersigned the Receipts by manual signature of a duly
authorized officer of the Registrar. Pending the preparation of definitive
Receipts, the Depositary, upon the written order of the Company delivered in
accordance with Section 2.02, shall
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<PAGE> 7
execute and deliver temporary Receipts which shall be printed, lithographed,
typewritten or otherwise substantially of the tenor of the definitive Receipts
in lieu of which they are issued and with appropriate insertions, omissions,
substitutions and other variations as the persons executing such Receipts may
determine are necessary for such temporary Receipts, as evidenced by their
execution of such temporary Receipts. If temporary Receipts are issued, the
Company and the Depositary will cause definitive Receipts to be prepared
without unreasonable delay; provided that, if such temporary Receipts are
global Receipts, definitive Receipts need not be prepared until the Receipts
cease to be held in global form. After the preparation of definitive Receipts,
the temporary Receipts shall be exchangeable for definitive Receipts upon
surrender of the temporary Receipts at the Corporate Office or such other
office as the Depositary may designate, without charge to the holder. Upon
surrender for cancellation of any one or more temporary Receipts, the
Depositary shall execute and deliver in exchange therefor definitive Receipts
representing the same number of Depositary Shares as represented by the
surrendered temporary Receipt or Receipts. Such exchange shall be made at the
Company's expense and without any charge therefor. Until so exchanged, the
temporary Receipts shall in all respects be entitled to the same benefits under
this Agreement, and with respect to the Stock, as definitive Receipts.
No Receipt shall be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose unless it shall have been
executed as provided in the preceding sentence. The Depositary shall record on
its books each Receipt executed as provided above and delivered as hereinafter
provided. Receipts bearing the facsimile signature of anyone who was at any
time a duly authorized officer of the Depositary shall bind the Depositary,
notwithstanding that such officer has ceased to hold such office prior to the
delivery of such Receipts.
Receipts may be issued in denominations of any number of whole
Depositary Shares. All Receipts shall be dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of
this Deposit Agreement as may be required by the Depositary or required to
comply with any applicable law or regulation or with the rules and regulations
of any securities exchange upon which the Stock or the Depositary Shares may be
listed or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Receipts are
subject by reason of the date of issuance of the Stock or otherwise.
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer shall be transferable by delivery with the same effect
as in the case of investment securities in general; provided, however, that the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts
in Respect Thereof. Subject to the terms and conditions of this Deposit
Agreement, the Company or any holder of Stock may deposit such Stock under this
Deposit Agreement by delivery to the Depositary of a certificate or
certificates for the Stock to be deposited, properly endorsed or accompanied,
if required by the Depositary, by a properly executed instrument of transfer in
form satisfactory to the Depositary, together with (i) all such certifications
as may be required by the Depositary in accordance with the provisions of
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<PAGE> 8
this Deposit Agreement and (ii) a written order of the Company or such holder,
as the case may be, directing the Depositary to execute and deliver to or upon
the written order of the person or persons stated in such order a Receipt or
Receipts for the number of Depositary Shares representing such deposited Stock.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary shall, as soon as transfer and registration can be
accomplished, present such certificate or certificates to the registrar and
transfer agent of the Stock for transfer and registration in the name of the
Depositary or its nominee of the Stock being deposited. Deposited Stock shall
be held by the Depositary in an account to be established by the Depositary at
the Corporate Office.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver, to or upon the order of the person or
persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section 2.02, a Receipt or Receipts for the number
of whole Depositary Shares representing the Stock so deposited and registered
in such name or names as may be requested by such person or persons. The
Depositary shall execute and deliver such Receipt or Receipts at the Corporate
Office, except that, at the request, risk and expense of any person requesting
such delivery and for the account of such person, such delivery may be made at
such other place as may be designated by such person. In each case, delivery
will be made only upon payment by such person to the Depositary of all taxes
and other governmental charges and any fees payable in connection with such
deposit and the transfer of the deposited Stock.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary
to perform its obligations under this Deposit Agreement.
SECTION 2.03. Redemption and Repurchase of Stock. Whenever the
Company shall redeem shares of Stock in accordance with the Certificate of
Designation, it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary not less than five business
days' prior notice of the proposed date of the mailing of a notice of
redemption of Stock and the simultaneous redemption of the Depositary Shares
representing the Stock to be redeemed and of the number of such shares of Stock
held by the Depositary to be redeemed. The Depositary shall, as directed by
the Company in writing, mail, first class postage prepaid, notice of the
redemption of Stock and the proposed simultaneous redemption of the Depositary
Shares representing the Stock to be redeemed not less than 30 and not more than
60 days prior to the date fixed for redemption of such Stock and Depositary
Shares, to the record holders of the Receipts evidencing the Depositary Shares
to be so redeemed at the addresses of such holders as the same appear on the
records of the Depositary. Notwithstanding the foregoing, neither failure to
mail or publish any such notice to one or more such holders nor any defect in
any notice shall affect the sufficiency of the proceedings for redemption. The
Company shall provide the Depositary with such notice, and each such notice
shall state: the method for determining the amount payable per Depositary
Share; the redemption date; the number of Depositary Shares to be redeemed; and
shall call upon each holder of Depositary Shares to surrender, on the
redemption date and at the place or places designated by the Company, the
Receipts evidencing Depositary Shares to be redeemed. On the date of any such
redemption the Depositary shall surrender
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<PAGE> 9
the certificate or certificates held by the Depositary evidencing the number of
shares of Stock to be redeemed in the manner specified in the notice of
redemption of Stock provided by the Company pursuant to the Certificate of
Designation. The Depositary shall, thereafter, redeem the number of Depositary
Shares representing such redeemed Stock upon the surrender of Receipts
evidencing such Depositary Shares in the manner provided in the notice sent to
record holders of Receipts.
Notice having been mailed by the Depositary as aforesaid, from and
after the redemption date (unless the Company shall have failed to redeem the
shares of Stock to be redeemed by it upon the surrender of the certificate or
certificates therefor by the Depositary as described in the preceding
paragraph), the Depositary Shares called for redemption shall be deemed no
longer to be outstanding and all rights of the holders of Receipts evidencing
such Depositary Shares (except the right to receive the cash payable upon
redemption upon surrender of such Receipts) shall, to the extent of such
Depositary Shares, cease and terminate. The foregoing shall be subject further
to the terms and conditions of the Certificate of Designation.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such
Receipt upon its surrender to the Depositary, together with the redemption
price (to be paid in the form of cash) and all accrued and unpaid dividends to
and including the date fixed for redemption payable in respect of the
Depositary Shares called for redemption, a new Receipt evidencing the
Depositary Shares evidenced by such prior Receipt and not called for
redemption.
The Depositary shall not be required (a) to issue, transfer or
exchange any Receipts for a period beginning at the opening of business 15 days
next preceding any selection of Depositary Shares and Stock to be redeemed and
ending at the close of business on the day of the mailing of notice of
redemption of Depositary Shares or (b) to transfer or exchange for another
Receipt any Receipt evidencing Depositary Shares called or being called for
redemption, in whole or in part except as provided in the immediately preceding
paragraph of this Section 2.03.
Whenever the Company shall be required to make an offer to repurchase
Depositary Shares representing Stock in accordance with the Certificate of
Designation, it shall give the Depositary in its capacity as Depositary not
less than five business days' prior notice of the required date of the mailing
of a notice of the repurchase offer. The Depositary shall, as directed by the
Company in writing, mail, first class postage prepaid, notice of the relevant
terms of the repurchase offer, as provided by the Company, including: (i) that
such notice is being given pursuant to a repurchase offer, (ii) the number of
Depositary Shares and Stock for which the offer is being made, (iii) the method
for determining the amount payable per Depositary Share, (iv) the last date,
which shall not be less than 30 nor more than 60 days after the date of such
notice, by which a holder must elect to accept the repurchase offer, (v) the
procedures that such holder must follow to exercise its rights and (vi) the
procedures for withdrawing an election.
The Depositary shall, thereafter, receive from each holder electing to
have Depositary Shares repurchased pursuant to the repurchase offer in
accordance with the instructions in the notice, the holder's Receipts, with an
appropriate form duly completed prior to the repurchase date. Holders will be
entitled to withdraw an election by a written notice of withdrawal delivered to
the Depositary prior to the close of business on the repurchase date. The
notice of withdrawal shall state the number of
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<PAGE> 10
Depositary Shares and the Receipt numbers to which the notice of withdrawal
relates and the number of Depositary Shares and Receipt numbers, if any, which
remain subject to election. In case the aggregate number of Depositary Shares
offered for repurchase by the holders exceeds the amount of Depositary Shares
which the Company has offered to repurchase pursuant to the repurchase offer,
the Depositary Shares to be repurchased shall be selected by the Depositary on
a pro rata basis at the direction of the Company. The Depositary shall, at the
direction of the Company, cause payment to be mailed or delivered to each
tendering holder as promptly as reasonably practicable after the repurchase
date, in the amount of the repurchase price, and any unpurchased Depositary
Shares to be returned to the holder thereof. The foregoing is subject further
to the terms and conditions of the Certificate of Designation.
SECTION 2.04. Register of Transfer of Receipts. Subject to the
terms and conditions of this Deposit Agreement, the Depositary shall register
on its books from time to time transfers of Receipts upon any surrender thereof
at the Corporate Office, or such other office as the Depositary may designate
for such purpose, by the record holder in person or by a duly authorized
attorney, properly endorsed or accompanied by a properly executed instrument of
transfer, together with evidence of the payment of any transfer taxes as may be
required by law. Upon such surrender, the Depositary shall execute a new
Receipt or Receipts and deliver the same to or upon the order of the person
entitled thereto evidencing the same aggregate number of Depositary Shares
evidenced by the Receipt or Receipts surrendered.
SECTION 2.05. Combination and Split-ups of Receipts. Upon
surrender of a Receipt or Receipts at the Corporate Office, or such other
office as the Depositary may designate for the purpose of effecting a split-up
or combination of Receipts, subject to the terms and conditions of this Deposit
Agreement, the Depositary shall execute and deliver a new Receipt or Receipts
in the authorized denominations requested evidencing the same aggregate number
of Depositary Shares evidenced by the Receipt or Receipts surrendered;
provided, however, that the Depositary shall not issue any Receipt evidencing a
fractional Depositary Share.
SECTION 2.06. Surrender of Receipts and Withdrawal of Stock.
(a) Except as provided in Section 2.06(b), no holder of a Receipt
or Receipts shall have the right to withdraw any of the shares of Stock
represented by such Receipts.
(b) Notwithstanding Section 2.06(a), the Company shall have the
right to withdraw any or all of the Stock (but only in whole shares of Stock)
represented by the Depositary Shares and all money and other property, if any,
represented by such Depositary Shares by surrendering the Receipt or Receipts
evidencing such Depositary Shares at the Corporate Office, or at such other
office as the Depositary may designate for such withdrawals (and cancellation
of the surrendered Receipts as provided in Section 2.09). After such
surrender, without unreasonable delay, the Depositary shall deliver to the
Company the whole number of shares of Stock and all such money and other
property, if any, represented by the Depositary Shares evidenced by the Receipt
or Receipts so surrendered for withdrawal. If the Receipt or Receipts
delivered by the Company to the Depositary in connection with such withdrawal
shall evidence a number of Depositary Shares in excess of the number of whole
Depositary Shares representing the whole number of shares of Stock to be
withdrawn, the Depositary shall at the same time, in addition to such whole
number of shares of Stock and such money and other property, if any, to be
withdrawn, deliver to the Company, or (subject to Section 2.04) upon its order,
a new Receipt or Receipts evidencing such excess number of whole Depositary
Shares.
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Delivery of the Stock and such money and other property being
withdrawn may be made by the delivery of such certificates, documents of title
and other instruments as the Depositary may deem appropriate, which, if
required by the Depositary, shall be properly endorsed or accompanied by proper
instruments of transfer.
The Depositary shall deliver the Stock and the money and other
property, if any, represented by the Depositary Shares evidenced by Receipts
surrendered for withdrawal, without unreasonable delay, at the office at which
such Receipts were surrendered, except that, at the request, risk and expense
of the Company such delivery may be made, without unreasonable delay, at such
other place as may be designated by the Company.
For purposes of determining the number of Depositary Shares
outstanding on any dividend payment date for purposes of [Section 4(b)] of the
Certificate of Designation, the Receipts representing Depositary Shares
acquired by the Company on or prior to such dividend payment date and not
theretofore delivered to the Depositary for withdrawal and cancellation shall
be deemed to be outstanding.
SECTION 2.07. Limitations on Execution and Delivery, Transfer,
Split-up, Combination and Surrender of Receipts and Withdrawal or Deposit of
Stock. As a condition precedent to the execution and delivery, registration of
transfer, split-up, combination, or surrender of any Receipt, the delivery of
any distribution thereon or deposit of Stock, the Depositary, any of the
Depositary's Agents or the Company may require any or all of the following:
(i) payment to it of a sum sufficient for the payment (or, in the event that
the Depositary or the Company shall have made such payment, the reimbursement
to it) of any tax or other governmental charge with respect thereto (including
any such tax or charge with respect to the Stock being deposited or withdrawn
or with respect to property of the Company being issued upon redemption); (ii)
production of proof satisfactory to it as to the identity and genuineness of
any signature; and (iii) compliance with such reasonable regulations, if any,
as the Depositary or the Company may establish not inconsistent with the
provisions of this Deposit Agreement.
The deposit of Stock may be refused, or the registration of transfer,
split-up, combination or surrender of outstanding Receipts and the withdrawal
of deposited Stock may be suspended (i) during any period when the register of
stockholders of the Company is closed, (ii) if any such action is deemed
necessary or advisable by the Depositary, any of the Depositary's Agents or the
Company at any time or from time to time because of any requirement of law or
of any government or governmental body or commission, or under any provision of
this Deposit Agreement, or (iii) with the approval of the Company, for any
other reason. Without limitation of the foregoing, the Depositary shall not
knowingly accept for deposit under this Deposit Agreement any shares of Stock
that are required to be registered under the Securities Act unless a
registration statement under the Securities Act is in effect as to such shares
of Stock.
SECTION 2.08. Lost Receipts, etc. In case any Receipt shall be
mutilated or destroyed or lost or stolen, the Depositary shall execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt or in lieu of and in substitution for such destroyed, lost or
stolen Receipt unless the Depositary has notice that such Receipt has been
acquired by a bona fide purchaser; provided, however, that the holder thereof
provides the Depositary with (i) evidence satisfactory to the Depositary of
such destruction, loss or theft of such Receipt, of the authenticity thereof
and of his
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<PAGE> 12
ownership thereof, (ii) reasonable indemnification satisfactory to the
Depositary or the payment of any charges incurred by the Depositary in
obtaining insurance in lieu of such indemnification and (iii) payment of any
expense (including fees, charges and expenses of the Depositary) in connection
with such execution and delivery.
SECTION 2.09. Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary shall, from time to time, deliver such cancelled
Receipts to the Company, who will retain them in compliance with applicable
regulations of the Securities and Exchange Commission.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information.
Any person presenting Stock for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold or delay the delivery of
any Receipt, the registration of transfer or redemption of any Receipt, the
withdrawal of the Stock represented by the Depositary Shares evidenced by any
Receipt or the distribution of any dividend or other distribution until such
proof or other information is filed, such certificates are executed or such
representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges. If
any tax or other governmental charge shall become payable by or on behalf of
the Depositary with respect to (i) any Receipt, (ii) the Depositary Shares
evidenced by such Receipt, (iii) the Stock (or fractional interest therein) or
other property represented by such Depositary Shares, or (iv) any transaction
referred to in Section 4.06, such tax (including transfer, issuance or
acquisition taxes, if any) or governmental charge shall be payable by the
holder of such Receipt, who shall pay the amount thereof to the Depositary.
Until such payment is made, registration or transfer of any Receipt or any
split-up or combination thereof or any withdrawal of the Stock or money or
other property, if any, represented by the Depositary Shares evidenced by such
Receipt may be refused, any dividend or other distribution may be withheld and
any part or all of the Stock or other property represented by the Depositary
Shares evidenced by such Receipt may be sold for the account of the holder
thereof (after attempting by reasonable means to notify such holder prior to
such sale). Any dividend or other distribution so withheld and the proceeds of
any such sale may be applied to any payment of such tax or other governmental
charge, the holder of such Receipt remaining liable for any deficiency.
SECTION 3.03. Withholding. The Depositary shall act as the tax
withholding agent for any payments, distributions made with respect to the
Depositary Shares and Receipts, and the Stock. The Depositary shall be
responsible with respect to the Depositary Shares, Receipts and Stock for the
timely (i) collection and deposit of any required withholding or backup
withholding tax, and (ii) filing of any information returns or other documents
with federal (and other applicable) taxing authorities.
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SECTION 3.04. Representations and Warranties as to Stock. In the
case of the initial deposit of the Stock, the Company and, in the case of
subsequent deposits thereof, each person so depositing Stock under this Deposit
Agreement shall be deemed thereby to represent and warrant that such Stock and
each certificate therefor are valid and that the person making such deposit is
duly authorized to do so. Such representations and warranties shall survive
the deposit of the Stock and the issuance of Receipts therefor.
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01. Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to Section 3.02, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.04 such amounts of such
sum as are, as nearly as practicable, in proportion to the respective numbers
of Depositary Shares evidenced by the Receipts held by such holders; provided,
however, that in case the Company or the Depositary shall be required by law to
withhold and does withhold from any cash dividend or other cash distribution in
respect of the Stock an amount on account of taxes, the amount made available
for distribution or distributed in respect of Depositary Shares shall be
reduced accordingly. The Depositary shall distribute or make available for
distribution, as the case may be, only such amount, however, as can be
distributed without attributing to any owner of Depositary Shares a fraction of
one cent and any balance not so distributable shall be held by the Depositary
(without liability for interest thereon) and shall be added to and be treated
as part of the next sum received by the Depositary for distribution to record
holders of Receipts then outstanding.
SECTION 4.02. Distributions Other Than Cash. Whenever the
Depositary shall receive any distribution other than cash, rights, preferences
or privileges upon the Stock, the Depositary shall, subject to Section 3.02,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.04 such amounts of the securities or property received by it as are,
as nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders, in any manner that the
Depositary and the Company may deem equitable and practicable for accomplishing
such distribution. If, in the opinion of the Company after consultation with
the Depositary, such distribution cannot be made proportionately among such
record holders, or if for any other reason (including any tax withholding or
securities law requirement), the Depositary deems, after consultation with the
Company, such distribution not to be feasible, the Depositary may, with the
approval of the Company which approval shall not be unreasonably withheld,
adopt such method as it deems equitable and practicable for the purpose of
effecting such distribution, including the sale (at public or private sale) of
the securities or property thus received, or any part thereof, at such place or
places and upon such terms as it may deem proper. The net proceeds of any such
sale shall, subject to Section 3.02, be distributed or made available for
distribution, as the case may be, by the Depositary to record holders of
Receipts as provided by Section 4.01 in the case of a distribution received in
cash.
SECTION 4.03. Subscription Rights, Preferences or Privileges. If
the Company shall at any time offer or cause to be offered to the persons in
whose names Stock is registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each
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such instance be made available by the Depositary to the record holders of
Receipts in such manner as the Company shall instruct (including by the issue
to such record holders of warrants representing such rights, preferences or
privileges); provided, however, that (a) if at the time of issue or offer of
any such rights, preferences or privileges the Company determines and instructs
the Depositary that it is not lawful or feasible to make such rights,
preferences or privileges available to some or all holders of Receipts (by the
issue of warrants or otherwise) or (b) if and to the extent instructed by
holders of Receipts who do not desire to exercise such rights, preferences or
privileges, the Depositary shall then, in each case, and if applicable laws or
the terms of such rights, preferences or privileges so permit, sell such
rights, preferences or privileges of such holders at public or private sale, at
such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall be distributed by the Depositary to the record
holders of Receipts entitled thereto as provided by Section 4.01 in the case of
a distribution received in cash.
If registration under the Securities Act of the securities to which
any rights, preferences or privileges relate is required in order for holders
of Receipts to be offered or sold such securities, the Company shall promptly
file a registration statement pursuant to the Securities Act with respect to
such rights, preferences or privileges and securities and use its best efforts
and take all steps available to it to cause such registration statement to
become effective sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges. In no event shall the Depositary make available to
the holders of Receipts any right, preference or privilege to subscribe for or
to purchase any securities unless and until such registration statement shall
have become effective or unless the offering and sale of such securities to
such holders are exempt from registration under the provisions of the
Securities Act.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to
holders of Receipts, the Company agrees with the Depositary that the Company
will use its reasonable best efforts to take such action or obtain such
authorization, consent or permit sufficiently in advance of the expiration of
such rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges.
SECTION 4.04. Notice of Dividends, Fixing of Record Date for
Holders of Receipts. Whenever (i) any cash dividend or other cash distribution
shall become payable, or any distribution other than cash shall be made, or any
rights, preferences or privileges shall at any time be offered, with respect to
the Stock, or (ii) the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice or any election on the part of the Company to call for the redemption
of, any shares of Stock, the Depositary shall in each such instance fix a
record date (which shall be the same date as the record date fixed by the
Company with respect to the Stock) for the determination of the holders of
Receipts (x) who shall be entitled to receive such dividend, distribution,
rights, preferences or privileges or the net proceeds of the sale thereof, or
(y) who shall be entitled to give instructions for the exercise of voting
rights at any such meeting or to receive notice of such meeting or of such
redemption.
SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting
at which the holders of Stock are entitled to vote, the Depositary shall, as
soon as practicable thereafter, mail to the record holders of Receipts a
notice, which shall be provided by the Company and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that
the holders of Receipts at the
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close of business on a specified record date fixed pursuant to Section 4.04
will be entitled, subject to any applicable provision of law, the Certificate
of Incorporation or the Certificate of Designation, to instruct the Depositary
as to the exercise of the voting rights pertaining to the Stock represented by
their respective Depositary Shares and (iii) a brief statement as to the manner
in which such instructions may be given. Upon the written request of a holder
of a Receipt on such record date, the Depositary shall endeavor insofar as
practicable to vote or cause to be voted the Stock represented by the
Depositary Shares evidenced by such Receipt in accordance with the instructions
set forth in such request. The Company hereby agrees to take all reasonable
action that may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be voted. In the absence
of specific instructions from the holder of a Receipt, the Depositary will
abstain from voting to the extent of the Stock represented by the Depositary
Shares evidenced by such Receipt.
SECTION 4.06. Changes Affecting Stock and Reclassifications,
Recapitalizations, etc. Upon any split-up, consolidation or any other
reclassification of Stock, or upon any recapitalization, reorganization,
merger, amalgamation or consolidation affecting the Company or to which it is a
party or sale of all or substantially all of the Company's assets, the
Depositary shall treat any shares of stock or other securities or property
(including cash) that shall be received by the Depositary in exchange for or in
respect of the Stock as new deposited property under this Deposit Agreement,
and Receipts then outstanding shall thenceforth represent the proportionate
interests of holders thereof in the new deposited property so received in
exchange for or in respect of such Stock. In any such case the Depositary may,
in its discretion, with the approval of the Company, execute and deliver
additional Receipts, or may call for the surrender of all outstanding Receipts
to be exchanged for new Receipts specifically describing such new deposited
property.
SECTION 4.07. Reports. The Company or, at the option of the
Company, the Depositary shall forward to the holders of Receipts any reports
and communications received from the Company that are received by the
Depositary as the holder of Stock.
SECTION 4.08. Lists of Receipt Holders. Promptly upon request from
time to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.
At the expense of the Company, the Company shall have the right to inspect
transfer and registration records of the Depositary, any Depositary's Agent or
the Registrar, take copies thereof and require the Depositary, any Depositary's
Agent or the Registrar to supply copies of such portions of such records as the
Company may request.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by
the Depositary; the Registrar. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain (i) at the Corporate
Office facilities for the execution and delivery, registration, registration of
transfer, surrender, split-up, combination and redemption of Receipts and
deposit and withdrawal of Stock and (ii) at the offices of the Depositary's
Agents, if any, facilities for the delivery, registration,
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registration of transfer, surrender, split-up, combination, and redemption of
Receipts and deposit and withdrawal of Stock, all in accordance with the
provisions of this Deposit Agreement.
The Depositary, acting as transfer agent and Registrar, shall keep
books at the Corporate Office for the registration and transfer of Receipts,
which books at all reasonable times shall be open for inspection by the record
holders of Receipts; provided that any such holder requesting to exercise such
right shall certify to the Depositary that such inspection shall be for a
proper purpose reasonably related to such person's interest as an owner of
Depositary Shares. The Depositary shall consult with the Company upon receipt
of any request for inspection. The Depositary may close such books, at any
time or from time to time, when deemed expedient by it in connection with the
performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the
Stock represented by such Depositary Shares shall be listed on one or more
stock exchanges, the Depositary shall, with the approval of the Company,
appoint a Registrar for registry of such Receipts or Depositary Shares in
accordance with the requirements of such exchange or exchanges. Such Registrar
(which may be the Depositary if so permitted by the requirements of such
exchange or exchanges) may be removed and a substitute registrar appointed by
the Depositary upon the request or with the approval of the Company. In
addition, if the Receipts, such Depositary Shares or such Stock are listed on
one or more stock exchanges, the Depositary will, at the request of the
Company, arrange such facilities for the delivery, registration, registration
of transfer, surrender, split-up, combination or redemption of such Receipts,
such Depositary Shares or such Stock as may be required by law or applicable
stock exchange regulations.
SECTION 5.02. Prevention or Delay in Performance by the Depositary,
the Depositary's Agents, the Registrar or the Company. Neither the Depositary
nor any Depositary's Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt, if by reason of any provision of any
present or future law or regulation thereunder of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Registrar or any Depositary's Agent, by reason of any provision, present or
future, of the Certificate of Incorporation or the Certificate of Designation
or, in the case of the Company, the Depositary, the Registrar or any
Depositary's Agent, by reason of any act of God or war or other circumstances
beyond the control of the relevant party, the Depositary, any Depositary's
Agent, the Registrar or the Company shall be prevented or forbidden from doing
or performing any act or thing that the terms of this Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
the Registrar or the Company incur any liability to any holder of a Receipt (i)
by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of this Deposit Agreement
provide shall or may be done or performed, or (ii) by reason of any exercise
of, or failure to exercise, any discretion provided for in this Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or the
Registrar, if any such exercise or failure to exercise discretion is caused by
its gross negligence or willful misconduct.
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Company. The Company assumes no obligation and
shall be subject to no liability under this Deposit Agreement or the Receipts
to holders or other persons, except to perform in good faith such obligations
as are specifically set forth and undertaken by it to perform in this Deposit
Agreement. Each of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject
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to no liability under this Deposit Agreement or the Receipts to holders or
other persons, except to perform such obligations as are specifically set forth
and undertaken by it to perform in this Deposit Agreement without gross
negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding with respect to Stock, Depositary Shares
or Receipts that in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense and liability be furnished as
often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be liable for any action or any failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of a Receipt or any other
person believed by it in good faith to be competent to give such advice or
information. The Depositary, any Depositary's Agent, the Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and
to have been signed or presented by the proper party or parties.
The Depositary, the Registrar and any Depositary's Agent may own and
deal in any class of securities of the Company and its affiliates and in
Receipts or Depositary Shares. The Depositary may also act as transfer agent
or registrar of any of the securities of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
nor the Registrar shall be deemed to be an "issuer" of the Stock, the
Depositary Shares, or the Receipts or other securities issued upon exchange or
redemption of the Stock under the federal securities laws or applicable state
securities laws, it being expressly understood and agreed that the Depositary
and any Depositary's Agent and the Registrar are acting only in a ministerial
capacity; provided, however, that the Depositary agrees to comply with all
information reporting and withholding requirements applicable to it under law
or this Deposit Agreement in its capacity as Depositary.
Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent nor the Registrar makes any representation
or has any responsibility as to the validity of the Registration Statement
pursuant to which the Depositary Shares are registered under the Securities
Act, the Stock, the Depositary Shares or any instruments referred to therein or
herein, or as to the correctness of any statement made therein or herein;
provided, however, that the Depositary is responsible for its representations
in this Deposit Agreement.
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Stock at any time deposited with the Depositary hereunder or
of the Depositary Shares, as to the validity or sufficiency of this Deposit
Agreement, as to the value of the Depositary Shares or as to any right, title
or interest of the record holders of Receipts in and to the Depositary Shares
except that the Depositary hereby represents and warrants as follows: (i) the
Depositary has been duly organized and is validly existing and in good standing
under the laws of the State of Minnesota, with full power, authority and legal
right under such law to execute, deliver and carry out the terms of this
Deposit Agreement; (ii) this Deposit Agreement has been duly authorized,
executed and delivered by the Depositary; and (iii) this
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Deposit Agreement constitutes, and when executed and delivered, each Receipt
will constitute, a valid and binding obligation of the Depositary, enforceable
against the Depositary in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law). The
Depositary shall not be accountable for the use or application by the Company
of the Depositary Shares or the Receipts or the proceeds thereof.
SECTION 5.04. Resignation and Removal of the Depositary,
Appointment of Successor Depositary. The Depositary may at any time resign as
Depositary hereunder by written notice via registered mail of its election to
do so delivered to the Company, such resignation to take effect upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.
The Depositary may at any time be removed by the Company by written
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company, having its principal office in the United States of America and having
a combined capital and surplus of at least $50,000,000. If a successor
depositary shall not have been appointed in 60 days, the resigning or removed
Depositary may petition a court of competent jurisdiction to appoint a
successor depositary. Every successor depositary shall execute and deliver to
its predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall promptly
execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all rights, title and interest in the Stock and any moneys or property held
hereunder to such successor and shall deliver to such successor a list of the
record holders of all outstanding Receipts. Any successor depositary shall
promptly mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
depositary may execute the Receipts either in the name of the predecessor
depositary or in the name of the successor depositary.
SECTION 5.05. Corporate Notices and Reports. The Company agrees
that it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at
the address recorded in the Depositary's books, copies of all notices and
reports (including financial statements) required by law, by the rules of any
national securities exchange upon which the Stock, the Depositary Shares or the
Receipts are listed or by the Certificate of Incorporation and the Certificate
of Designation to be furnished by the Company to holders of Stock. Such
transmission will be at the Company's expense and the Company will provide the
Depositary with such number of copies of such documents as the Depositary may
reasonably request. In addition, the
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Depositary will transmit to the record holders of Receipts at the Company's
expense such other documents as may be requested by the Company.
SECTION 5.06. Deposit of Stock by the Company. The Company agrees
with the Depositary that neither the Company nor any company controlled by the
Company will at any time deposit any Stock if such Stock is required to be
registered under the provisions of the Securities Act and no registration
statement is at such time in effect as to such Stock.
SECTION 5.07. Indemnification by the Company. The Company shall
indemnify the Depositary for, and hold it harmless against, any loss,
liability, claim or expense ("Loss") arising out of or in connection with its
duties under this Agreement, including the reasonable costs and expenses of
defending itself against Loss, unless such Loss shall have been determined by a
court of competent jurisdiction to be a result of the Depositary's gross
negligence or willful misconduct. Anything to the contrary notwithstanding, in
no event shall the Depositary be liable for special, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Depositary has been advised of the likelihood of
such damages.
SECTION 5.08. Fees, Charges and Expenses. No fees, charges and
expenses of the Depositary or any Depositary's Agent hereunder or of any
Registrar shall be payable by any person other than the Company, except for any
taxes and other governmental charges and except as provided in this Deposit
Agreement. If, at the request of a holder of a Receipt, the Depositary incurs
fees, charges or expenses for which it is not otherwise liable hereunder, such
holder or other person will be liable for such fees, charges and expenses. All
other fees, charges and expenses of the Depositary and any Depositary's Agent
hereunder and of any Registrar (including, in each case, reasonable fees and
expenses of counsel) incident to the performance of their respective
obligations hereunder will be paid from time to time upon consultation and
agreement between the Depositary and the Company as to the amount and nature of
such fees, charges and expenses.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment. The form of the Receipts and any
provision of this Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary in any respect that
they may deem necessary or desirable; provided, however, that no such amendment
that shall materially and adversely alter the rights of the holders of Receipts
shall be effective as to outstanding Receipts until the expiration of 90 days
after notice of such amendment shall have been given to the record holders of
outstanding Receipts and unless such amendment shall have been approved by the
holders of at least a majority of the Depositary Shares outstanding. In no
event shall any amendment impair the right, subject to the provisions of
Sections 2.03, 2.06 and 2.07 and Article III, of any owner of any Depositary
Shares to surrender the Receipt evidencing such Depositary Shares with
instructions to the Depositary to deliver to the holder the Stock and all money
and other property, if any, represented thereby, except in order to comply with
mandatory provisions of applicable law.
SECTION 6.02. Termination. Whenever so directed by the Company,
the Depositary will terminate this Deposit Agreement by mailing notice of such
termination to the record holders of all
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Receipts then outstanding at least 30 days prior to the date fixed in such
notice for such termination. The Depositary may likewise terminate this Deposit
Agreement if at any time 45 days shall have expired after the Depositary shall
have delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its appointment
as provided in Section 5.04.
If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the
holders thereof and shall not give any further notices (other than notice of
such termination) or perform any further acts under this Deposit Agreement,
except as provided below and that the Depositary shall continue to collect
dividends and other distributions pertaining to Stock, shall sell rights,
preferences or privileges as provided in this Deposit Agreement and shall
continue to deliver the Stock and any money and other property represented by
Receipts, without liability for interest thereon, upon surrender thereof by the
holders thereof. At any time after the expiration of two years from the date
of termination, the Depositary may sell Stock then held hereunder at public or
private sale, at such places and upon such terms as it deems proper and may
thereafter hold in a segregated account the net proceeds of any such sale,
together with any money and other property held by it hereunder, without
liability for interest, for the benefit, pro rata in accordance with their
holdings, of the holders of Receipts that have not heretofore been surrendered.
After making such sale, the Depositary shall be discharged from all obligations
under this Deposit Agreement except to account for such net proceeds and money
and other property. Upon the termination of this Deposit Agreement, the
Company shall be discharged from all obligations under this Deposit Agreement
except for its obligations to the Depositary, any Depositary's Agent and any
Registrar under Sections 5.07 and 5.08.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. This Deposit Agreement may be executed
by the Company and the Depositary in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection during business hours at the Corporate Office and
the respective offices of the Depositary's Agents, if any, by any holder of a
Receipt.
SECTION 7.02. Exclusive Benefits of Parties. This Deposit
Agreement is for the exclusive benefit of the parties hereto, and their
respective successors hereunder, and shall not be deemed to give any legal or
equitable right, remedy or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more of
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
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SECTION 7.04. Notices. Any notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or
telex or telecopier confirmed by letter, addressed to the Company at 2000 Post
Oak Boulevard, Suite 100, Houston, Texas 77056- 4400, Attention: Corporate
Secretary, or at any other place to which the Company may have transferred its
principal executive office.
Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Depositary at the Corporate Office.
Except as provided in the next paragraph, any notices given to any
record holder of a Receipt hereunder or under the Receipts shall be in writing
and shall be deemed to have been duly given if personally delivered or sent by
mail, or by telegram or telex or telecopier confirmed by letter, addressed to
such record holder at the address of such record holder as it appears on the
books of the Depositary or, if such holder shall have filed with the Depositary
a written request that notices intended for such holder be mailed to some other
address, at the address designated in such request.
In addition, whenever the Certificate of Designation requires any
notice to be published, the Depositary will, if requested by the Company, cause
such notice to be published in the manner directed by the Company.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telegram or telex or telecopier message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any telegram or telex or telecopier message received by
it from the other or from any holder of a Receipt, notwithstanding that such
telegram or telex or telecopier message shall not subsequently be confirmed by
letter as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may, with the
approval of the Company which approval shall not be unreasonably withheld, from
time to time appoint one or more Depositary's Agents to act in any respect for
the Depositary for the purposes of this Deposit Agreement and may vary or
terminate the appointment of such Depositary's Agents.
SECTION 7.06. Holders of Receipts Are Parties. Notwithstanding
that holders of Receipts have not executed and delivered this Deposit Agreement
or any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions, and be entitled to all of the benefits, hereof and of the
Receipts by acceptance of delivery of Receipts.
SECTION 7.07. Governing Law. This Deposit Agreement and the
Receipts and all rights hereunder and thereunder and provisions hereof and
thereof shall be governed by, and construed in accordance with, the law of the
State of New York without giving effect to principles of conflict of laws.
SECTION 7.08. Headings. The headings of articles and sections in
this Deposit Agreement and in the form of the Receipt set forth in Exhibit A
hereto have been inserted for
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convenience only and are not to be regarded as a part of this Deposit Agreement
or to have any bearing upon the meaning or interpretation of any provision
contained herein or in the Receipts.
IN WITNESS WHEREOF, Apache Corporation and Norwest Bank Minnesota, National
Association, have duly executed this Deposit Agreement as of the day and year
first above set forth and all holders of Receipts shall become parties hereto
by and upon acceptance by them of delivery of Receipts issued in accordance
with the terms hereof.
APACHE CORPORATION
Attest:
By: By:
--------------------------------- ----------------------------
Authorized Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Depositary
Attest:
By: By:
--------------------------------- ----------------------------
Authorized Officer
18
<PAGE> 23
EXHIBIT A
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES
EACH REPRESENTING 1/10 OF A SHARE OF
______% CUMULATIVE PREFERRED STOCK, SERIES B
OF
APACHE CORPORATION
No. 1 CUSIP: 037411 ____________
Norwest Bank Minnesota, National Association (the "Depositary") hereby
certifies that Cede & Co. is the registered owner of __________________
Depositary Shares (the "Depositary Shares"), each Depositary Share representing
1/10 of a share of _______% Cumulative Preferred Stock, Series B, no par value
(the "Stock"), of Apache Corporation, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), deposited with the
Depositary and the same proportionate interest in any and all other property
received by the Depositary in respect of such shares of Stock and held by the
Depositary under the Deposit Agreement (as defined below). Subject to the terms
of the Deposit Agreement, each owner of a Depositary Share is entitled,
proportionately, to all the rights, preferences and privileges of the Stock
represented thereby, including the dividend, conversion, exchange, voting,
liquidation and other rights contained in the Certificate of Designations,
Preferences and Rights establishing the rights, preferences, privileges and
limitations of the Stock (the "Certificate of Designations"), copies of which
are on file at the office of the Depositary in The City of South St. Paul, at
which at any particular time its business in respect of matters governed by the
Deposit Agreement shall be administered, which at the time of the execution of
the Deposit Agreement is located at 161 North Concord Exchange, South St. Paul,
Minnesota 55075 (the "Corporate Office").
This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any purpose
unless this Receipt shall have been executed manually or, if a Registrar for
the Receipts (other than the Depositary) shall have been appointed, by
facsimile by the Depositary by the signature of a duly authorized officer and,
if executed by facsimile signature of the Depositary, shall have been
countersigned manually by such Registrar by the signature of a duly authorized
officer.
1
<PAGE> 24
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED
STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE
COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS
EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO
WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF
ANY STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT
OR OF THE DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT
AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE
OR INTEREST OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE
DEPOSITARY SHARES.
The Company will furnish to any holder of this Receipt without charge,
upon request addressed to its executive office, a full statement of the
designation, relative rights, preferences and limitations of the shares of each
authorized class, and of each class of preferred stock authorized to be issued,
so far as the same may have been fixed, and a statement of the authority of the
Board of Directors of the Company to designate and fix the relative rights,
preferences and limitations of other classes.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.
Dated: August ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Depositary and Registrar
By:
-----------------------------------
Authorized Officer
Further Conditions and Agreements Forming Part of this Receipt Appear on the
Reverse Side.
2
<PAGE> 25
[REVERSE
OF DEPOSITARY RECEIPT]
1. The Deposit Agreement. Depositary Receipts (the "Receipts"),
of which this Receipt is one, are made available upon the terms and conditions
set forth in the Deposit Agreement, dated as of August ___, 1998 (the "Deposit
Agreement"), among the Company, the Depositary and all holders from time to
time of Receipts. The Deposit Agreement (copies of which are on file at the
Corporate Office and at the office of any agent of the Depositary) sets forth
the rights of holders of Receipts and the rights and duties of the Depositary.
The statements made on the face and the reverse of this Receipt are summaries
of certain provisions of the Deposit Agreement and are subject to the detailed
provisions thereof, to which reference is hereby made. In the event of any
conflict between the provisions of this Receipt and the provisions of the
Deposit Agreement, the provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
3. Redemption by the Company; Repurchase by the Company.
Whenever the Company shall redeem shares of Stock in accordance with the
Certificate of Designations, it shall (unless otherwise agreed in writing with
the Depositary) give the Depositary in its capacity as Depositary not less than
five business days' prior notice of the proposed date of the mailing of a
notice of redemption and of the number of such shares of Stock held by the
Depositary to be redeemed. The Depositary shall, as directed by the Company in
writing, mail, first class postage prepaid, notice of the redemption not less
than 30 and not more than 60 days prior to the date fixed for redemption of
such Stock and Depositary Shares, to the record holders of the Receipts
evidencing the Depositary Shares to be so redeemed, at the addresses of such
holders as the same appear on the records of such holders as the same appear on
the records of the Depositary. On the date of any such redemption, the
Depositary shall surrender the certificate or certificates held by the
Depositary evidencing the number of shares of Stock to be redeemed in the
manner specified in the notice of redemption. The Depositary shall,
thereafter, redeem the number of Depositary shares representing such redeemed
Stock upon the surrender of Receipts evidencing such Depositary Shares in the
manner provided in the notice sent to record holders of Receipts. Notice
having been mailed and published as aforesaid, from and after the redemption
date (unless the Company shall have failed to redeem the shares of Stock to be
redeemed by it upon the surrender of the certificate or certificates therefor
by the Depositary as described above), the Depositary Shares called for
redemption shall be deemed no longer to be outstanding and all rights of the
holders of Receipts evidencing such Depositary Shares shall, to the extent of
such Depositary Shares, cease and terminate.
Whenever the Company shall be required to make a repurchase of
Depositary Shares in accordance with the Certificate of Designations, it shall
give the Depositary in its capacity as Depositary not less than five business
days' prior notice of the required date of the mailing of a notice of the
repurchase offer. The Depositary shall, as directed by the Company in writing,
mail, first class postage prepaid, notice of the relevant terms and conditions
of the repurchase offer, as provided by the Company, to the record holders of
the Receipts evidencing the Depositary Shares to be repurchased by the Company,
at the addresses of such holders as the same appear on the records of the
Depositary. The Depositary shall, thereafter, collect any notices, guarantees
and Receipts evidencing the Depositary
3
<PAGE> 26
Shares from the holders in the manner provided for in the notice sent to the
holders from the Company. In case the aggregate number of Depositary Shares
exceeds the amount the Company is required to repurchase, the Depositary Shares
to be repurchased shall be selected by the Depositary on a pro rata basis at
the direction of the Company. The foregoing is subject further to the terms
and conditions of the Certificate of Designations.
4. Withdrawal of Stock Not Permitted. Holders of Receipts are
not entitled to receive any of the shares of Stock represented by such
Receipts.
5. Transfers, Split-ups, Combinations. Subject to Paragraphs 6,
7 and 8 below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Corporate Office or at such
other offices as the Depositary may designate, properly endorsed or accompanied
by a properly executed instrument of transfer, and upon such transfer the
Depositary shall sign and deliver a Receipt or Receipts to or upon the order of
the person entitled thereto, all as provided in and subject to the Deposit
Agreement. This Receipt may be split into other Receipts or combined with
other Receipts into one Receipt evidencing the same aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
however, that the Depositary shall not issue any Receipt evidencing a
fractional Depositary Share.
6. Conditions to Signing and Delivery, Transfer, etc., of
Receipts. Prior to the execution and delivery, registration of transfer,
split-up, combination, surrender or exchange of this Receipt, the delivery of
any distribution hereon, the Depositary, any of the Depositary's Agents or the
Company may require any or all of the following: (i) payment to it of a sum
sufficient for the payment (or, in the event that the Depositary or the Company
shall have made such payment, the reimbursement to it) of any tax or other
governmental charge with respect thereto (including any such tax or charge with
respect to Stock being deposited or withdrawn or with respect to other
securities or property of the Company being issued upon redemption); (ii)
production of proof satisfactory to it as to the identity and genuineness of
any signature; and (iii) compliance with such reasonable regulations, if any,
as the Depositary or the Company may establish not inconsistent with the
Deposit Agreement. Any person presenting Stock for deposit, or any holder of
this Receipt, may be required to file such proof of information, to execute
such certificates and to make such representations and warranties as the
Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company may withhold or delay the delivery of this Receipt,
the registration of transfer, redemption, or exchange of this Receipt, the
withdrawal of the Stock represented by the Depositary Shares evidenced by this
Receipt or the distribution of any dividend or other distribution until such
proof or other information is filed, such certificates are executed or such
representations and warranties are made.
7. Suspension of Delivery, Transfer, etc. The registration of
transfer, split-up, combination, surrender or exchange of this Receipt may be
suspended (i) during any period when the register of stockholders of the
Company is closed, (ii) if any such action is deemed necessary or advisable by
the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of the Deposit
Agreement, or (iii) with the approval of the Company, for any other reason.
The Depositary shall not be required to issue, transfer or exchange any
Receipts for a period beginning at the opening of business 15 days next
preceding any selection of Depositary Shares and Stock to be redeemed and
ending at the close of business on the day of the mailing of notice of
redemption of Depositary Shares.
4
<PAGE> 27
8. Payment of Taxes or Other Governmental Charges. If any tax or
other governmental charge shall become payable by or on behalf of the
Depositary with respect to (i) this Receipt, (ii) the Depositary Shares
evidenced by this Receipt, (iii) the Stock (or fractional interest therein) or
other property represented by such Depositary Shares, or (iv) any transaction
referred to in Section 4.06 of the Deposit Agreement, such tax (including
transfer, issuance or acquisition taxes, if any) or governmental charge shall
be payable by the holder of this Receipt, who shall pay the amount thereof to
the Depositary. Until such payment is made, registration of transfer of this
Receipt or any split-up or combination hereof or any withdrawal of the Stock or
money or other property, if any, represented by the Depositary Shares evidenced
by this Receipt may be refused, any dividend or other distribution may be
withheld and any part or all of the Stock or other property represented by the
Depositary Shares evidenced by this Receipt may be sold for the account of the
holder hereof (after attempting by reasonable means to notify such holder prior
to such sale). Any dividend or other distribution so withheld and the proceeds
of any such sale may be applied to any payment of such tax or other
governmental charge, the holder of this Receipt remaining liable for any
deficiency.
9. Amendment. The form of the Receipts and any provision of the
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect that they may deem
necessary or desirable; provided, however, that no such amendment that shall
materially and adversely alter the rights of the holders of Receipt shall be
effective as to outstanding Receipts until the expiration of 90 days after
notice of such amendment shall have been given to the record holders of
outstanding Receipts and unless such amendment shall have been approved by the
holders of at least a majority of the Depositary Shares outstanding. Every
holder of an outstanding Receipt at the time 90 days after such notice of
amendment shall have been given shall be deemed, by continuing to hold such
Receipt, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. In no event shall any amendment impair the
right, subject to the provisions of Paragraphs 3, 4 6, 7, and 8 hereof and of
Sections 2.03, 2.06 and 2.07 and Article III of the Deposit Agreement, of the
owner of the Depositary Shares evidenced by this Receipt to surrender this
Receipt with instructions to the Depositary to deliver to the holder the Stock
and all money and other property, if any, represented thereby, except in order
to comply with mandatory provisions of applicable law.
10. Fees, Charges and Expenses. The Company will pay all fees,
charges and expenses of the Depositary, except for taxes (including transfer
taxes, if any) and other governmental charges and such charges as are expressly
provided in the Deposit Agreement to be at the expense of persons depositing
Stock, holders of Receipts or other persons.
11. Title to Receipts. It is a condition of this Receipt, and
every successive holder hereof by accepting or holding the same consents and
agrees, that title to this Receipt (and to the Depositary Shares evidenced
hereby), when properly endorsed or accompanied by a properly executed
instrument of transfer, is transferable by delivery with the same effect as in
the case of investment securities in general; provided, however, that the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder hereof at such time as the absolute owner hereof for the purpose of
determining the person entitled to distribution of dividends or other
distributions or to any notice provided for in the Deposit Agreement and for
all other purposes.
5
<PAGE> 28
12. Dividends and Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to the provisions of the Deposit Agreement,
distribute to record holders of Receipts such amounts of such sums as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders; provided, however, that
in case the Company or the Depositary shall be required by law to withhold and
does withhold from any cash dividend or other cash distribution in respect of
the Stock an amount on account of taxes, the amount made available for
distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for
distribution, as the case may be, only such amount, however, as can be
distributed without attributing to any owner of Depositary Shares a fraction of
one cent and any balance not so distributable shall be held by the Depositary
(without liability for interest thereon) and shall be added to and be treated
as part of the next sum received by the Depositary for distribution to record
holders of Receipts then outstanding.
13. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
name Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the
Deposit Agreement, be made available by the Depositary to the record holders of
Receipts in such manner as the Company shall instruct.
14. Notice of Dividends, Fixing of Record Date. Whenever (i) any
cash dividend or other cash distribution shall become payable, or any
distribution other than cash shall be made, or any rights, preferences or
privileges shall at any time be offered, with respect to the Stock, or (ii) the
Depositary shall receive notice of any meeting at which holders of Stock are
entitled to vote or of which holders of Stock are entitled to notice, or of the
mandatory conversion of, or any election on the part of the Company to call for
redemption or exchange of, any shares of Stock, the Depositary shall in each
such instance fix a record date (which shall be the same date as the record
date fixed by the Company with respect to the Stock) for the determination of
the holders of Receipts (x) who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the sale
thereof, or (y) who shall be entitled to give instructions for the exercise of
voting rights at any such meeting or of such meeting or to receive notice of
such conversion, exchange or redemption.
15. Voting Rights. Upon receipt of notice of any meeting at which
the holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice, which
shall contain (i) such information as is contained in such notice of meeting,
(ii) a statement that the holders of Receipts at the close of business on a
specified record date determined as provided in Paragraph 14 will be entitled,
subject to any applicable provision of law, the Certificate of Incorporation or
the Certificate of Designations, to instruct the Depositary as to the exercise
of the voting rights pertaining to the Stock represented by their respective
Depositary Shares, and (iii) a brief statement as to the manner in which such
instructions may be given. Upon the written request of a holder of this
Receipt on such record date the Depositary shall endeavor insofar as
practicable to vote or cause to be voted the Stock represented by the
Depositary Shares evidenced by this Receipt in accordance with the instructions
set forth in such request. The Company hereby agrees to take all reasonable
action that may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be voted. In the absence
of specific instructions from the holder of this Receipt, the Depositary will
abstain from voting to the extent of the Stock represented by the Depositary
Shares evidenced by this Receipt.
6
<PAGE> 29
16. Reports, Inspection of Transfer Books. The Depositary shall
make available for inspection by holders of Receipts at the Corporate Office
and at such other places as it may from time to time deem advisable during
normal business hours any reports and communications received from the Company
that are received by the Depositary as the holder of Stock. The Depositary,
acting as transfer agent and Registrar, shall keep books at the Corporate
Office for the registration and transfer of Receipts, which books at all
reasonable times will be open for inspection by the record holders of Receipts;
provided that any such holder requesting to exercise such right shall certify
to the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares.
17. Liability of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's Agent
nor the Registrar nor the Company shall incur any liability to any holder of
this Receipt, if by reason of any provision of any present or future law or
regulation thereunder of any governmental authority or, in the case of the
Depositary, the Registrar or any Depositary's Agent, by reason of any provision
present or future, of the Certificate of Incorporation or the Certificate of
Designations or, in the case of the Company, the Depositary, the Registrar or
any Depositary's Agent, by reason of any act of God or war or other
circumstances beyond the control of the relevant party, the Depositary, any
Depositary's Agent, the Registrar or the Company shall be prevented or
forbidden from doing or performing any act or thing that the terms of the
Deposit Agreement provide shall be done or performed; nor shall the Depositary,
any Depositary's Agent, the Registrar or the Company incur any liability to any
holder of this Receipt (i) by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of the Deposit
Agreement provide shall or may be done or performed or (ii) by reason of any
exercise of, or failure to exercise, any discretion provided for in the Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or the
Registrar, if such exercise or failure to exercise discretion is caused by its
negligence or bad faith.
18. Obligations of the Depositary, the Depositary's Agent, the
Registrar and the Company. The Company assumes no obligation and shall be
subject to no liability under the Deposit Agreement or this Receipt to the
holder hereof or other persons, except to perform in good faith such
obligations as are specifically set forth and undertaken by it to perform in
the Deposit Agreement. Each of the Depositary, the Depositary's Agents and the
Registrar assumes no obligation and shall be subject to no liability under the
Deposit Agreement or this Receipt to the holder hereof or other persons, except
to perform such obligations as are specifically set forth and undertaken by it
to perform in the Deposit Agreement without negligence or bad faith.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding with respect to Stock, Depositary Shares
or Receipts or Common Stock that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company will be liable for any action or failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of this Receipt or any other
person believed by it in good faith to be competent to give such advice or
information.
7
<PAGE> 30
19. Termination of Deposit Agreement. Whenever so directed by the
Company, the Depositary will terminate the Deposit Agreement by mailing notice
of such termination to the record holders of all Receipts then outstanding at
least 30 days prior to the date fixed in such notice for such termination. The
Depositary may likewise terminate the Deposit Agreement if at any time 90 days
shall have expired after the Depositary shall have delivered to the Company a
written notice of its election to resign and a successor depositary shall not
have been appointed and accepted its appointment as provided in Section 5.04 of
the Deposit Agreement. Upon the termination of the Deposit Agreement, the
Company shall be discharged from all obligations thereunder except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 5.07 and 5.08 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination of
the Deposit Agreement, the Depositary thereafter shall discontinue all
functions and be discharged from all obligations as provided in the Deposit
Agreement, except as specifically provided therein.
20. Governing Law. The Deposit Agreement and this Receipt and all
rights thereunder and hereunder and provisions thereof and hereof shall be
governed by, and construed in accordance with, the law of the State of New York
without giving effect to principles of conflict of laws.
-----------------------------------
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________ the within Receipt and all rights and
interests represented by the Depositary Shares evidenced thereby, and hereby
irrevocably constitutes and appoints ______________________ his attorney, to
transfer the same on the books of the within-named Depositary, with full power
of substitution in the premises.
Dated: Signature:
----------------- ----------------------------------------
NOTE: The signature to this assignment
must correspond with the name as written
upon the face of the Receipt in every
particular, without alteration or
enlargement, or any change whatever.
8
<PAGE> 1
EXHIBIT 23.1
I consent to the filing of my opinion, dated June 26, 1998, as an
exhibit to this Registration Statement and to the use of my name under the
caption "Legal Matters" in the Prospectus or any Prospectus Supplement,
included as part of the Registration Statement. In giving such consent, I do
not admit that I am in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended.
/s/ Z.S. Kobiashvili
--------------------------------------
Vice President and General Counsel
Houston, Texas
August 19, 1998
<PAGE> 1
Exhibit 99.2
APACHE CORPORATION
Statement of Computation of Ratios of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------
1998 1997 1997 1996 1995 1994 1993
------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Pretax income from continuing
operations (1) ........................ $46,553 $131,711 $258,640 $200,195 $ 33,143 $ 66,234 $62,067
Add: Fixed charges excluding
capitalized interest .................. 41,026 34,646 78,531 68,091 77,220 39,008 34,355
------- -------- -------- -------- -------- -------- -------
Adjusted Earnings ....................... $87,579 $166,357 $337,171 $268,286 $110,363 $105,242 $96,422
======= ======== ======== ======== ======== ======== =======
FIXED CHARGES
Interest expense including capitalized
interest (2) .......................... $60,331 $ 48,463 $105,148 $ 89,829 $ 88,057 $ 37,838 $34,205
Amortization of debt expense ............ 2,308 2,578 6,438 5,118 4,665 3,987 3,896
Interest component of lease rental
expenditures (3) ...................... 1,775 1,403 3,438 3,856 3,539 3,217 2,533
------- -------- -------- -------- -------- -------- -------
$64,414 $ 52,444 $115,024 $ 98,803 $ 96,261 $ 45,042 $40,634
======= ======== ======== ======== ======== ======== =======
Ratio of earnings to combined fixed charges
and preferred stock dividends ........... 1.36 3.17 2.93 2.72 1.15 2.34 2.37
======= ======== ======== ======== ======== ======== =======
</TABLE>
- ---------------------------
(1) Undistributed income of less-than-50%-owned affiliates is excluded.
(2) Apache guaranteed and was contingently liable for certain debt. This debt,
primarily associated with partnership operations, totaled $1.7 million at
December 31, 1996. The outstanding balance was repaid in January 1997 and
the facility was terminated. Fixed charges, relating to the debt for which
Apache was contingently liable, have not been included in the fixed charges
for any of the periods shown above.
(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% to 34% applies for all periods presented.
