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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 26, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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APACHE CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
NO. 41-0747868
DELAWARE (I.R.S. Employer
(State of incorporation) Identification Number)
ONE POST OAK CENTRAL Z. S. KOBIASHVILI
2000 POST OAK BOULEVARD, SUITE 100 2000 POST OAK BOULEVARD, SUITE 100
HOUSTON, TEXAS 77056-4400 HOUSTON, TEXAS 77056-4400
(713) 296-6000 (713) 296-6000
(Address, including zip code, and (Name, address, including zip code, and
telephone number, including area code, of telephone number, including area code, of
registrant's executive offices) agent for service)
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Copies to:
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<S> <C>
RALPH K. MILLER, JR. CRAIG E. CHAPMAN
WOODARD, HALL & PRIMM, P.C. BROWN & WOOD LLP
7100 CHASE TOWER ONE WORLD TRADE CENTER
HOUSTON, TEXAS 77002 NEW YORK, NEW YORK 10048-0557
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only Securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the Securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional Securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Preferred Stock, no par
value(3)......................
Depositary Shares representing $500,000,000 100% $500,000,000 $147,500
Preferred Stock(3)............
Debt Securities(3)..............
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</TABLE>
(1) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$500,000,000. Any securities registered hereunder may be sold separately or
as units with other securities registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Subject to note (1) above, there are being registered hereunder an
indeterminate principal amount of securities. If any securities are being
issued at an original issue discount, then the offering price shall be in
such greater principal amount as shall result in an aggregate initial
offering price not to exceed $500,000,000 less the dollar amount of any
securities previously issued hereunder.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, JUNE 26, 1998
PROSPECTUS
$500,000,000
APACHE CORP. LOGO
DEBT SECURITIES
PREFERRED STOCK
Apache Corporation (the "Company" or "Apache") may from time to time offer
unsecured senior debt securities in one or more series ("Debt Securities"),
and/or preferred stock, no par value per share, in one or more series
("Preferred Stock" and together with the Debt Securities, the "Securities"), at
an aggregate initial offering price not to exceed $500,000,000, in amounts, at
prices and on terms to be determined at the time of sale and, to the extent not
set forth herein, set forth in an accompanying Prospectus Supplement. The terms
of the Debt Securities, including, where applicable, the specific designation,
aggregate principal amount, currency, denominations, maturity, interest rate
(which may be fixed or variable), method of distribution, and any prepayment
and, original issue discount or other variable terms with regard to time of
payment of interest, if any, terms for redemption at the option of the Company
or the holder, the initial public offering price, and the other specific terms
of the series of the Debt Securities in respect of which this Prospectus is
being delivered, to the extent not set forth herein, will be set forth in the
applicable Prospectus Supplement. The specific designation, rights, preferences,
privileges and restrictions, including, where applicable, the dividend rate (or
manner of calculation thereof), time of payment of dividends, liquidation value,
listing (if any) on a securities exchange, terms for mandatory or optional
redemption and any other specific terms of the series of the Preferred Stock in
respect of which this Prospectus is being delivered, to the extent not set forth
herein, will be set forth in the applicable Prospectus Supplement. If so
specified in the applicable Prospectus Supplement, the Preferred Stock may be
represented by Depositary Shares entitling the holders proportionally to all
rights and preferences of the Preferred Stock.
The applicable Prospectus Supplement will contain information, where
applicable, concerning certain United States federal income tax considerations
relating to the Securities covered by such Prospectus Supplement, any listing or
proposed listing of such Securities on a securities exchange and, if the
Securities are issued in fully registered book-entry form, a description of the
depository arrangements.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The Securities may be sold (i) through underwriters or dealers, (ii)
directly by the Company to a limited number of institutional purchasers or to a
single purchaser, (iii) through agents designated from time to time, or (iv)
through any combination of the above. If any agents of the Company or any
underwriters are involved in the sale of the Securities, the names of such
agents or underwriters and any applicable commissions or discounts will be set
forth in the applicable Prospectus Supplement. See "Plan of Distribution" for
indemnification arrangements which the Company may make available to
underwriters and agents for the sale of the Securities.
The date of this Prospectus is , 1998.
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AVAILABLE INFORMATION
Apache is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "SEC"). Reports, proxy statements and other information filed by
Apache can be inspected and copied at the public reference facilities maintained
by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the SEC's Regional Offices at Seven World Trade Center, 13th Floor, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained by mail from
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. Also, the SEC maintains a web site that
contains reports, proxy statements and other information regarding the Company
at http://www.sec.gov. In addition, reports, proxy statements and other
information concerning Apache may be inspected at the offices of The New York
Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York 10005, and
also at the offices of the Chicago Stock Exchange ("CSE"), One Financial Place,
440 S. LaSalle Street, Chicago, Illinois 60605-1070. The address of the
Company's principal executive offices and its telephone number are 2000 Post Oak
Boulevard, Suite 100, Houston, Texas 77056-4400 and (713) 296-6000.
The Company has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities. This Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits and schedules thereto, certain
portions of which have been omitted pursuant to the rules and regulations of the
SEC. For further information, reference is hereby made to the Registration
Statement. Any statements contained herein concerning the provisions of any
document filed as an exhibit to the Registration Statement or otherwise filed
with the SEC are not necessarily complete, and in each instance reference is
made to the copy of such document so filed, each such statement being qualified
in its entirety by such reference.
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INFORMATION INCORPORATED BY REFERENCE
The following documents previously filed by the Company (SEC File No.
1-4300) with the SEC pursuant to the Exchange Act are incorporated in and made a
part of this Prospectus:
a. Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
b. Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1998.
c. Current Report on Form 8-K dated January 29, 1998.
d. Current Report on Form 8-K dated June 18, 1998.
All documents which the Company files pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering described herein shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement contained in a document
incorporated by reference, or deemed to be incorporated by reference, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document or in any accompanying Prospectus Supplement modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company undertakes to provide without charge, upon the written or oral
request of any person to whom a copy of this Prospectus has been delivered, a
copy of any or all of the documents referred to above which are incorporated in
this Prospectus by reference, other than exhibits to such documents. Requests
should be directed to Cheri L. Peper, Corporate Secretary, Apache Corporation,
2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400; (713) 296-6000.
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Certain forward-looking information contained in this Prospectus and
certain material incorporated by reference herein is being provided, and certain
forward-looking information in each Prospectus Supplement will be provided, in
reliance upon the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 as set forth in Section 27A of the Securities Act and Section
21E of the Exchange Act. Such information includes, without limitation,
discussions as to estimates, expectations, beliefs, plans, strategies and
objectives concerning the Company's future financial and operating performance.
Such forward-looking information is subject to assumptions and beliefs based on
current information known to the Company and factors that could yield actual
results differing materially from those anticipated. Such factors include,
without limitation, the prices received for the Company's oil and natural gas
production, the costs of acquiring, finding, developing and producing reserves,
the rates of production of the Company's hydrocarbon reserves, the Company's
success in acquiring or finding additional reserves, unforeseen operational
hazards, significant changes in tax or regulatory environments, and the
political, economic and financial uncertainties of foreign operations.
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All defined terms under Rule 4-10(a) of Regulation S-X promulgated under
the Securities Act shall have their statutorily-prescribed meanings when used in
this Prospectus. Quantities of natural gas are expressed in this Prospectus and
will be expressed in each Prospectus Supplement in terms of thousand cubic feet
("Mcf"), million cubic feet ("MMcf") or billion cubic feet ("Bcf"). Oil (which
includes condensate) is quantified in terms of barrels ("bbls"), thousands of
barrels ("Mbbls") and millions of barrels ("MMbbls"). One barrel of oil is
treated as the energy equivalent of six Mcf of natural gas, expressed as a
barrel of oil equivalent. Natural gas is compared to oil in terms of thousand
barrels of oil equivalent ("Mboe") and in million barrels of oil equivalents
("MMboe"). Oil and natural gas liquids are compared with natural gas in terms of
million cubic feet equivalent ("MMcfe") and billion cubic feet equivalent
("Bcfe"). Daily oil and gas production is expressed in terms of barrels of oil
per day ("bopd") and thousands of cubic feet of gas per day ("Mcfd"),
respectively. The Company's "net" working interest in wells or acreage is
determined by multiplying gross wells or acreage by the Company's working
interest therein. Unless otherwise specified, all references to wells and acres
are gross. Unless otherwise specifically provided herein or in any accompanying
Prospectus Supplement, references to "$" or dollars in this Prospectus or any
such Prospectus Supplement shall mean United States dollars.
THE COMPANY
Apache, a Delaware corporation formed in 1954, is an independent energy
company that explores for, develops and produces crude oil and natural gas. In
North America, the Company's exploration and production interests are focused on
the Gulf of Mexico, the Anadarko Basin, the Permian Basin, the Gulf Coast and
the Western Sedimentary Basin of Canada. Outside of North America, the Company
has exploration and production interests offshore Western Australia and in
Egypt, and exploration interests in Poland, offshore the People's Republic of
China, offshore the Ivory Coast and in Indonesia. The Company's common stock,
par value $1.25 per share ("Apache Common Stock"), has been listed on the NYSE
since 1969, and on the CSE since 1960.
The Company holds interests in many of its North American and international
properties through operating subsidiaries, such as Apache Canada Ltd., MW
Petroleum Corporation, Apache Energy Limited, Apache International, Inc., Apache
Overseas, Inc., and Apache PHN Company, Inc. The Company treats all operations
as one segment of business.
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USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds from the sale of the Securities will be used to refinance outstanding
indebtedness and for other general corporate purposes. To the extent proceeds
are used to refinance outstanding indebtedness, certain terms of the
indebtedness being refinanced will be set forth in the applicable Prospectus
Supplement.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The Company's ratios of earnings to combined fixed charges and preferred
stock dividends were as follows for the respective periods indicated:
<TABLE>
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THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
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1998 1997 1997 1996 1995 1994 1993
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<S> <C> <C> <C> <C> <C> <C>
1.60 4.07 2.93 2.72 1.15 2.34 2.37
</TABLE>
The Company's ratios of earnings to combined fixed charges and preferred
stock dividends were computed based on: (A) consolidated income or losses from
continuing operations before income taxes, fixed charges (excluding interest
capitalized) and preferred stock dividends; and (B) consolidated fixed charges,
which consist of interest on indebtedness (including amounts capitalized),
amortization of debt discount and expense, the estimated portion of rental
expense attributable to interest and preferred stock dividends. On May 17, 1995,
Apache acquired DEKALB Energy Company ("DEKALB", now known as DEK Energy
Company) through a merger which resulted in DEKALB becoming a wholly-owned
subsidiary of Apache. The merger was accounted for as a "pooling of interests."
As a result, Apache's financial information for all preceding periods was
restated.
No shares of Preferred Stock were outstanding during any of the periods
presented. Accordingly, the ratios of earnings to combined fixed charges and
preferred stock dividends for each of the periods presented above is the same as
the ratios of earnings to fixed charges for such periods.
DESCRIPTION OF DEBT SECURITIES
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities will be issued under an indenture (as supplemented from time to
time, the "Indenture") entered into between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"). References herein to "Sections" are references
to Sections of the Indenture unless otherwise indicated. The Debt Securities to
be offered by this Prospectus are limited to an aggregate initial offering price
not to exceed $500,000,000. However, the Indenture does not limit the amount of
Debt Securities which can be issued thereunder and provides that additional Debt
Securities of any series may be issued thereunder up to the aggregate principal
amount which may be authorized from time to time by the Company. The payment of
principal of, and premium, if any, and interest on the Debt Securities will rank
pari passu with all other unsecured unsubordinated indebtedness of the Company.
Unless otherwise indicated herein or in the applicable Prospectus Supplement,
the Debt Securities will be issued in denominations of $1,000 and integral
multiples of $1,000 in excess thereof.
The Indenture is listed as an exhibit to the Registration Statement of
which this Prospectus is a part. The information herein includes a summary of
certain provisions of the Indenture and does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all provisions of
the Indenture, including the definition therein of certain terms. The following
summaries set forth certain general terms and provisions of the Debt Securities
to which any Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by any Prospectus Supplement and the extent, if any, to which
such general provisions may apply to the Debt Securities so offered will be
described, to the extent not described herein, in the Prospectus Supplement
relating to such Debt Securities.
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GENERAL
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for the following terms and other information with respect to the
Debt Securities being offered thereby, to the extent not described herein: (i)
the designation, aggregate principal amount and authorized denominations of such
Debt Securities; (ii) the percentage of the principal amount at which such Debt
Securities will be issued; (iii) the date (or the manner of determining or
extending the date or dates) on which the principal of such Debt Securities will
be payable; (iv) whether such Debt Securities will be issued in fully registered
form or in bearer form or any combination thereof; (v) whether such Debt
Securities will be issued in the form of one or more global securities and
whether such global securities are to be issuable in a temporary global form or
permanent global form; (vi) if other than U.S. dollars, the currency or
currencies or currency unit or units in which Debt Securities may be denominated
and purchased and the currency or currencies or currency units in which
principal, premium (if any) and any interest may be payable; (vii) if the
currency or currencies or currency unit or units for which Debt Securities may
be purchased or in which principal, premium (if any) and any interest may be
payable is at the election of the Company or the purchaser, the manner in which
such an election may be made and the terms of such election; (viii) the rate or
rates per annum at which such Debt Securities will bear interest, if any, or the
method or methods of determination of such rate or rates and the basis upon
which interest will be calculated if other than that of a 360-day year
consisting of twelve 30-day months; (ix) the date or dates from which such
interest, if any, on such Debt Securities will accrue or the method or methods,
if any, by which such date or dates are to be determined, the date or dates on
which such interest, if any, will be payable, the date on which payment of such
interest, if any, will commence and the regular record dates for such interest
payment dates, if any; (x) the date or dates, if any, on or after which, or the
period or periods, if any, within which, and the price or prices at which such
Debt Securities may, pursuant to any optional redemption provisions, be redeemed
at the option of the Company or of the holder thereof and the other terms and
provisions of such optional redemption; (xi) information with respect to
book-entry procedures relating to global Debt Securities; (xii) whether and
under what circumstances the Company will pay Additional Amounts (as defined in
the Indenture) as contemplated by Section 1004 of the Indenture (the term
"interest," as used in this Prospectus, shall include such Additional Amounts)
on such Debt Securities to any holder who is a United States Alien (as defined
in the Indenture) (including any modification to the definition of such terms
contained in the Indenture as originally executed) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have the
option to redeem such Debt Securities rather than pay such Additional Amounts
(and the terms of any such option); (xiii) any deletions from, modifications of
or additions to the Events of Default or covenants of the Company with respect
to any of such Debt Securities; (xiv) if either or both of Section 402(2)
relating to defeasance or Section 402(3) relating to covenant defeasance shall
not be applicable to such Debt Securities or any covenants in addition to those
specified in Section 402(3) relating to such Debt Securities shall be subject to
covenant defeasance, and any deletions from, or modifications or additions to,
the provisions of Article Four of the Indenture relating to satisfaction and
discharge in respect of such Debt Securities; (xv) any index or other method
used to determine the amount of payments of principal, premium (if any) and any
interest on such Debt Securities; (xvi) if a trustee other than The Chase
Manhattan Bank is named for such Debt Securities, the name of such trustee; and
(xvii) any other specific terms of the such Debt Securities. All Debt Securities
of any one series need not be issued at the same time and all the Debt
Securities of any one series need not bear interest at the same rate or mature
on the same date. (Section 301.)
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of, or premium, if any, or interest, if any,
on any series of Debt Securities is payable in foreign currencies or foreign
currency units, the restrictions, elections, tax consequences, specific terms
and other information with respect to such Debt Securities and such foreign
currencies or foreign currency units will be set forth in the applicable
Prospectus Supplement. (Section 302.)
Other than as described below under "Limitation on Liens," "Limitation on
Sale/Leaseback Transactions" and "Company's Obligation to Purchase Debt
Securities on Change in Control," the Indenture does not contain any provision
that would limit the ability of the Company to incur indebtedness or that would
afford holders of Debt Securities protection in the event of a decline in the
credit quality of the Company or a
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takeover, recapitalization or highly leveraged or similar transaction involving
the Company. Reference is made to the Prospectus Supplement relating to the
particular series of Debt Securities offered thereby, to the extent not
otherwise described herein, for any information with respect to any deletions
from, modifications of or additions to the Events of Default described below and
contained in the Indenture, including any addition of a covenant or other
provision providing event risk or similar protection.
INTEREST RATES
The Debt Securities will earn interest at a fixed or floating rate or rates
for the period or periods of time specified in the applicable Prospectus
Supplement. Unless otherwise specified in the applicable Prospectus Supplement,
the Debt Securities shall bear interest on the basis of a 360-day year
consisting of twelve 30-day months.
DISCOUNT, SERIES, MATURITIES, REGISTRATION AND PAYMENT
The Debt Securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate that at the
time of issuance is below market rates. Federal income tax consequences and
special considerations applicable to any such series will be described in the
Prospectus Supplement relating thereto.
The Debt Securities may be issued in one or more series with the same or
various maturities. (Section 301.) Debt Securities may be issued solely in fully
registered form without coupons ("Registered Securities"), solely in bearer form
with or without coupons ("Bearer Securities"), or as both Registered Securities
and Bearer Securities. (Section 301.) Registered Securities may be exchangeable
for other Debt Securities of the same series, registered in the same name, for a
like aggregate principal amount in authorized denominations and will be
transferable at any time or from time to time at the office mentioned below. No
service charge will be made to the holder for any such exchange or transfer,
except for any tax or governmental charge incidental thereto. If Debt Securities
of any series are issued as Bearer Securities, the applicable Prospectus
Supplement will contain any restrictions applicable to the offer, sale or
delivery of Bearer Securities and the terms upon which Bearer Securities of the
series may be exchanged for Registered Securities of the series and, if
permitted by applicable laws and regulations, the terms upon which Registered
Securities of the series may be exchanged for Bearer Securities of the series,
whether such Debt Securities are to be issuable in permanent global form with or
without coupons and, if so, whether beneficial owners of interests in any such
permanent global security may exchange such interests for Debt Securities of
such series and the circumstances under which any such exchanges may occur.
Unless otherwise specified in the applicable Prospectus Supplement,
principal and interest, if any, on the Debt Securities offered thereby are to be
payable at the office or agency of the Company maintained for such purposes in
the city where the principal corporate trust office of the Trustee is located,
and will initially be the principal corporate trust office of the Trustee,
provided that payment of interest, if any, may be made (subject to collection)
at the option of the Company by check mailed to the persons in whose names the
Debt Securities are registered at the close of business on the day specified in
the applicable Prospectus Supplement.
FORM, EXCHANGE AND REGISTRATION OF TRANSFER
Debt Securities will be exchangeable for other Debt Securities of the same
series and of like tenor, in any authorized denominations and of a like
aggregate principal amount and Stated Maturity (as defined in the Indenture).
Registered Securities may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) at the office of the Trustee or
at the office of any transfer agent designated by the Company for such purpose,
without service charge and upon payment of any taxes and other governmental
charges as described in the Indenture. Such transfer or exchange will be
effected upon the books of the Trustee or such transfer agent contingent upon
such Trustee or transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. (Section 305.)
In the event of any redemption of Debt Securities, the Company shall not be
required to: (i) issue, register the transfer of or exchange such Debt
Securities during a period beginning at the opening of business
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<PAGE> 8
15 days before any selection of such Debt Securities to be redeemed and ending
at the close of business on the day of mailing of the relevant notice of
redemption; or (ii) register the transfer of or exchange any such Debt Security,
or portion thereof, called for redemption, except the unredeemed portion of any
such Debt Security being redeemed in part. (Section 305.)
LIMITATION ON LIENS
Nothing in the Indenture or the Debt Securities will in any way limit the
amount of indebtedness or securities which may be incurred or issued by the
Company or any of its Subsidiaries (as defined in the Indenture). The Indenture
provides that neither the Company nor any Subsidiary will issue, assume or
guarantee any notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed secured by a mortgage, lien, pledge, security
interest or other encumbrance (defined in the Indenture as "Liens") upon any of
its property, subject to certain exceptions set forth in the Indenture, without
making effective provisions whereby any and all Debt Securities then outstanding
shall be secured by a Lien equally and ratably with any and all other
obligations thereby secured. Such restrictions will not, however, apply to (a)
Liens existing on the date of the Indenture or provided for under the terms of
agreements existing on the date thereof; (b) Liens securing (i) all or part of
the cost of exploring, producing, gathering, processing, marketing, drilling or
developing any properties of the Company or any of its Subsidiaries, or securing
indebtedness incurred to provide funds therefor or (ii) indebtedness incurred to
finance all or part of the cost of acquiring, constructing, altering, improving
or repairing any such property or assets, or securing indebtedness incurred to
provide funds therefor; (c) Liens which secure only indebtedness owing by a
Subsidiary to the Company, or to one or more Subsidiaries, or the Company and
one or more Subsidiaries; (d) Liens on the property of any corporation or other
entity existing at the time such corporation or entity becomes a Subsidiary; (e)
Liens on any property to secure indebtedness incurred in connection with the
construction, installation or financing of pollution control or abatement
facilities or other forms of industrial revenue bond financing or indebtedness
issued or guaranteed by the United States, any state or any department, agency
or instrumentality of either or indebtedness issued to or guaranteed for the
benefit of a foreign government, any state or any department, agency or
instrumentality of either or an international finance agency or any division or
department thereof, including the World Bank, the International Finance Corp.
and the Multilateral Investment Guarantee Agency; (f) any extension, renewal or
replacement (or successive extensions, renewals or replacements) of any Lien
referred to in the foregoing clauses (a) through (e) existing on the date of the
Indenture; (g) certain Liens incurred in the ordinary course of business or (h)
Liens which secure Limited Recourse Indebtedness (as defined in the Indenture).
The following types of transactions, among others, shall not be deemed to create
indebtedness secured by Liens: (i) the sale or other transfer of crude oil,
natural gas or other petroleum hydrocarbons in place for a period of time until,
or in an amount such that, the transferee will realize therefrom a specified
amount (however determined) of money or such crude oil, natural gas or other
petroleum hydrocarbons, or the sale or other transfer of any other interest in
property of the character commonly referred to as a production payment,
overriding royalty, forward sale or similar interest and (ii) Liens required by
any contract or statute in order to permit the Company or a Subsidiary to
perform any contract or subcontract made by it with or at the request of the
United States government or any foreign government or international finance
agency, any state or any department thereof, or any agency or instrumentality of
either, or to secure partial, progress, advance or other payments to the Company
or any Subsidiary by any such entity pursuant to the provisions of any contract
or statute. (Section 1005.)
LIMITATION ON SALE/LEASEBACK TRANSACTIONS
The Indenture provides that neither the Company nor any Subsidiary will
enter into any arrangement with any person (other than the Company or a
Subsidiary) providing for the leasing to the Company or a Subsidiary for a
period of more than three years of any property which has been, or is to be,
sold or transferred by the Company or such Subsidiary to such person or to any
person (other than the Company or a Subsidiary) to which funds have been or are
to be advanced by such person on the security of the leased property unless
either (a) the Company or such Subsidiary would be entitled, pursuant to the
provisions described under "Limitation on Liens" above, to incur indebtedness in
a principal amount equal to or exceeding the value of such sale/leaseback
transaction, secured by a Lien on the property to be leased; (b) since the date
of the
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Indenture and within a period commencing six months prior to the consummation of
such arrangement and ending six months after the consummation thereof, the
Company or such Subsidiary has expended or will expend for any property
(including amounts expended for the acquisition, exploration, drilling or
development thereof, and for additions, alterations, improvements and repairs
thereto) an amount equal to all or a portion of the net proceeds of such
arrangement and the Company elects to designate such amount as a credit against
such arrangement (with any such amount not being so designated to be applied as
set forth in (c) below); or (c) the Company, during or immediately after the
expiration of the 12 months after the effective date of such transaction,
applies to the voluntary defeasance or retirement of the Debt Securities and its
other Senior Indebtedness (as defined in the Indenture) an amount equal to the
greater of the net proceeds of the sale or transfer of the property leased in
such transaction or the fair value, in the opinion of the board of directors of
the Company of such property at the time of entering into such transaction (in
either case adjusted to reflect the remaining term of the lease and any amount
utilized by the Company as set forth in (b) above), less an amount equal to the
principal amount of Senior Indebtedness voluntarily retired by the Company
within such 12-month period. (Section 1006.)
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, any one
of the following events will constitute an "Event of Default" under the
Indenture with respect to the Debt Securities of any series: (a) failure to pay
any interest on any Debt Security of such series when due, continued for 30
days; (b) failure to pay principal of (or premium, if any) on the Debt
Securities of such series when due and payable, either at Maturity or, if
applicable, at 12:00 noon on the Business Day following a Change in Control
Purchase Date, as defined below; (c) failure to perform, or breach of, any other
covenant or warranty of the Company in the Indenture or the Debt Securities
(other than a covenant or warranty included in the Indenture solely for the
benefit of a series of securities other than the Debt Securities), continued for
60 days after written notice as provided in the Indenture; (d) the acceleration
of any Indebtedness (as defined in the Indenture) of the Company or any
Subsidiary in excess of an aggregate of $25,000,000 in principal amount under
any event of default as defined in any mortgage, indenture or instrument and
such acceleration has not been rescinded or annulled within 30 days after
written notice as provided in the Indenture specifying such Event of Default and
requiring the Company to cause such acceleration to be rescinded or annulled;
(e) failure to pay, bond or otherwise discharge within 60 days of entry, a
judgment, court order or uninsured monetary damage award against the Company or
any Subsidiary exceeding an aggregate of $25,000,000 in principal amount which
is not stayed on appeal or otherwise being appropriately contested in good
faith; (f) certain events of bankruptcy, insolvency or reorganization involving
the Company or any Subsidiary; and (g) any other Event of Default provided with
respect to the Debt Securities of that series. (Section 501.)
If an Event of Default with respect to the Debt Securities of any series
(other than an Event of Default described in (e) or (f) of the preceding
paragraph) occurs and is continuing, either the Trustee or the holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
such series by notice as provided in the Indenture may declare the principal
amount of such Debt Securities to be due and payable immediately. At any time
after a declaration of acceleration has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee, and subject to
applicable law and certain other provisions of the Indenture, the holders of a
majority in aggregate principal amount of the Debt Securities of such series
may, under certain circumstances, rescind and annul such acceleration. An Event
of Default described in (e) or (f) of the preceding paragraph shall cause the
principal amount and accrued interest (or such lesser amount as provided for in
the Debt Securities of such series) to become immediately due and payable
without any declaration or other act by the Trustee or any holder. (Section
502.)
The Indenture provides that, within 90 days after the occurrence of any
Event of Default thereunder with respect to the Debt Securities of any series,
the Trustee shall transmit, in the manner set forth in the Indenture, notice of
such Event of Default to the holders of the Debt Securities of such series
unless such Event of Default has been cured or waived; provided, however, that
except in the case of a default in the payment of principal of, or premium, if
any, or interest, if any, or additional amounts, if any, on any Debt Security of
such series, the Trustee may withhold such notice if and so long as the board of
directors, the
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executive committee or a trust committee of directors or Responsible Officers
(as defined in the Indenture) of the Trustee has in good faith determined that
the withholding of such notice is in the interest of the holders of Debt
Securities of such series. (Section 602.)
If an Event of Default occurs and is continuing with respect to the Debt
Securities of any series, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the holders of Debt Securities of such
series by all appropriate judicial proceedings. (Section 504.)
The Indenture provides that, subject to the duty of the Trustee during any
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of Debt Securities, unless such
holders shall have offered to the Trustee reasonable indemnity. (Section 601.)
Subject to such provisions for the indemnification of the Trustee, and subject
to applicable law and certain other provisions of the Indenture, the holders of
a majority in aggregate principal amount of the outstanding Debt Securities of a
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Debt Securities of such
series. (Section 512.)
COMPANY'S OBLIGATION TO PURCHASE DEBT SECURITIES ON CHANGE IN CONTROL
Upon the occurrence of a "Change in Control" as defined in the Indenture,
the Company shall mail within 15 days of the occurrence of such Change in
Control written notice regarding such Change in Control to the Trustee of the
Debt Securities of each series and to every holder thereof, after which the
Company shall be obligated, at the election of each holder thereof, to purchase
such Debt Securities. Under the Indenture, a "Change in Control" is deemed to
occur upon (a) the occurrence of any event requiring the filing of any report
under or in response to Schedule 13D or 14D-1 pursuant to the Exchange Act
disclosing beneficial ownership of either (i) 50% or more of the Apache Common
Stock then outstanding or (ii) 50% or more of the voting power of the voting
stock of the Company then outstanding; (b) the consummation of sale, transfer,
lease, or conveyance of the Company's properties and assets substantially as an
entirety to any Person or Persons who are not Subsidiaries (as such terms are
defined in the Indenture) of the Company; and (c) the consummation of any
consolidation of the Company with or merger of the Company into any other Person
in a transaction in which either (i) the Company is not the sole surviving
corporation or (ii) Apache Common Stock existing prior to such transaction is
converted into cash, securities or other property and those exchanging Apache
Common Stock do not receive either (x) 75% or more of the survivor's common
stock or (y) 75% or more of the voting power of the survivor's voting stock,
following the consummation of such transaction. The notice to be sent to the
Trustee and every holder upon a Change in Control shall, in addition, be
published at least once in an Authorized Newspaper (as defined in the Indenture)
and shall state (a) the event causing the Change in Control and the date
thereof, (b) the date by which notice of such Change in Control is required by
the Indenture to be given, (c) the date (which date shall be 35 business days
after the occurrence of the Change in Control) by which the Company shall
purchase Debt Securities to be purchased pursuant to the selling holder's
exercise of rights on Change in Control (the "Change in Control Purchase Date"),
(d) the price specified in such Debt Securities for their purchase by the
Company (the "Change in Control Purchase Price"), (e) the name and address of
the Trustee, (f) the procedure for surrendering Debt Securities to the Trustee
or other designated office or agent for payment, (g) a statement of the
Company's obligation to make prompt payment on proper surrender of such Debt
Securities, (h) the procedure for holders' exercise of rights of sale of such
Debt Securities by delivery of a "Change in Control Purchase Notice," and (i)
the procedures for withdrawing a Change in Control Purchase Notice. No purchase
of any Debt Securities shall be made if there has occurred and is continuing an
Event of Default under the Indenture (other than default in payment of the
Change in Control Purchase Price). In connection with any purchase of Debt
Securities under this paragraph, the Company will comply with all Federal and
state securities laws, including, specifically, Rule 13E-4, if applicable, of
the Exchange Act, and any related Schedule 13E-4 required to be submitted under
such Rule. (Section 1601.)
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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company may discharge certain obligations to holders of any series of
Debt Securities that have not already been delivered to the Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or are scheduled for redemption within one year) by
depositing with the Trustee, in trust, funds in U.S. dollars or in the Foreign
Currency (as defined below) in which such Debt Securities are payable in an
amount sufficient to pay the entire indebtedness on such Debt Securities with
respect to principal (and premium, if any) and interest to the date of such
deposit (if such Debt Securities have become due and payable) or to the Maturity
thereof, as the case may be. (Section 401.)
The Indenture provides that, unless the provisions of Section 402 thereof
are made inapplicable to the Debt Securities of or within any series pursuant to
Section 301 thereof, the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for, among other things, the obligation to pay Additional Amounts, if
any, upon the occurrence of certain events of taxation, assessment or
governmental charge with respect to payments on such Debt Securities and other
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an office or agency with respect to such Debt Securities and to hold
moneys for payment in trust) ("defeasance") or (b) to be released from its
obligations with respect to such Debt Securities under the covenants described
in "Limitation on Liens" and "Limitation on Sale/Leaseback Transactions" above
or, if provided pursuant to Section 301 of the Indenture, its obligations with
respect to any other covenant, and any omission to comply with such obligations
shall not constitute a default or an Event of Default with respect to such Debt
Securities ("covenant defeasance"). Defeasance or covenant defeasance, as the
case may be, shall be conditioned upon the irrevocable deposit by the Company
with the Trustee, in trust of an amount, in U.S. dollars or in the Foreign
Currency in which such Debt Securities are payable at Stated Maturity, or
Government Obligations (as defined below), or both, applicable to such Debt
Securities which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any) and interest on such Debt Securities on
the scheduled due dates therefor. (Section 401.)
Such a trust may only be established if, among other things, (i) the
applicable defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the Indenture or any other material
agreement or instrument to which the Company is a party or by which it is bound,
(ii) no default or Event of Default with respect to the Debt Securities to be
defeased shall have occurred and be continuing on the date of the establishment
of such a trust and (iii) the Company has delivered to the Trustee an Opinion of
Counsel (as specified in the Indenture) to the effect that the holders of such
Debt Securities will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such defeasance or covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred, and such Opinion of Counsel, in the case of
defeasance, must refer to and be based upon a letter ruling of the Internal
Revenue Service received by the Company, a Revenue Ruling published by the
Internal Revenue Service or a change in applicable U.S. federal income tax law
occurring after the date of the Indenture. (Section 402.)
"Foreign Currency" means any currency, currency unit or composite currency,
including, without limitation, the ECU, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments. (Section 101.)
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government or the governments in the
confederation which issued the Foreign Currency in which the Debt Securities of
a particular series are payable, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America or
such government or governments which issued the Foreign Currency in which the
Debt Securities of such series are payable, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government or governments, which, in the case of
clauses (i) and (ii), are not callable or redeemable at the option of the issuer
or issuers thereof, and shall also include a depository receipt issued by a bank
or trust company as
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custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of or any other amount with respect to any such
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian with
respect to the Government Obligation or the specific payment of interest on or
principal of or any other amount with respect to the Government Obligation
evidenced by such depository receipt. (Section 101.)
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to Section 301 of the Indenture or the terms of such Debt Security to
receive payment in a currency other than that in which such deposit has been
made in respect of such Debt Security, or (b) a Conversion Event (as defined
below) occurs in respect of the Foreign Currency in which such deposit has been
made, the indebtedness represented by such Debt Security shall be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any) and interest, if any, on such Debt Security
as such Debt Security becomes due out of the proceeds yielded by converting the
amount or other properties so deposited in respect of such Debt Security into
the currency in which such Debt Security becomes payable as a result of such
election or such Conversion Event based on (x) in the case of payments made
pursuant to clause (a) above, the applicable market exchange rate for such
currency in effect on the second business day prior to such payment date, or (y)
with respect to a Conversion Event, the applicable market exchange rate for such
Foreign Currency in effect (as nearly as feasible) at the time of the Conversion
Event. (Section 402.)
"Conversion Event" means the cessation of use of (i) a Foreign Currency
other than the ECU both by the government of the country or the confederation
which issued such Foreign Currency and for the settlement of transactions by a
central bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Community or (iii) any currency unit or composite currency other than the ECU
for the purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that are payable in a Foreign Currency
that ceases to be used by the government or confederation of issuance shall be
made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than an Event of Default with
respect to Sections 1005 and 1006 of the Indenture (which Sections would no
longer be applicable to such Debt Securities after such covenant defeasance) or
with respect to any other covenant as to which there has been covenant
defeasance, the amount in such Foreign Currency in which such Debt Securities
are payable, and Government Obligations on deposit with the Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of the Stated
Maturity but may not be sufficient to pay amounts due on such Debt Securities at
the time of the acceleration resulting from such Event of Default. However, the
Company would remain liable to make payment of such amounts due at the time of
acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
Under the Indenture, the Company is required to furnish to the Trustee
annually a statement as to performance by the Company of certain of its
obligations under the Indenture and as to any default in such performance. The
Company is also required to deliver to the Trustee, within five days after
occurrence thereof, written notice of any event which after notice or lapse of
time or both would constitute an Event of Default. (Section 1009.)
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MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of not less than a majority in
aggregate principal amount of the Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the holder of each Debt Security affected thereby, (a) change the
Stated Maturity of the principal of, or premium, if any, on, or any installment
of principal, if any, of or interest on, or any Additional Amounts with respect
to, any Debt Security, (b) reduce the principal amount of, or premium or
interest on, or any Additional Amounts with respect to, any Debt Security, (c)
change the coin or currency in which any Debt Security or any premium or any
interest thereon or any Additional Amounts with respect thereto is payable, (d)
impair the right to institute suit for the enforcement of any payment on or
after the Stated Maturity of any Debt Securities (or, in the case of redemption,
on or after the Redemption Date or, in the case of repayment at the option of
any holder, on or after the date for repayment or in the case of a change in
control, after the change in control purchase date), (e) reduce the percentage
and principal amount of the outstanding Debt Securities, the consent of whose
holders is required in order to take certain actions, (f) change any obligation
of the Company to maintain an office or agency in the places and for the
purposes required by the Indenture, or (g) modify any of the above provisions.
(Section 902.)
The holders of at least a majority in aggregate principal amount of Debt
Securities of any series may, on behalf of the holders of all Debt Securities of
such series, waive compliance by the Company with certain restrictive provisions
of the Indenture. (Section 1008.) The holders of not less than a majority in
aggregate principal amount of Debt Securities of any series may, on behalf of
all holders of Debt Securities of such series, waive any past default and its
consequences under the Indenture with respect to the Debt Securities of such
series, except a default (a) in the payment of principal of (or premium, if any)
or any interest on or any Additional Amounts with respect to Debt Securities of
such series or (b) in respect of a covenant or provision of the Indenture that
cannot be modified or amended without the consent of the holder of each Debt
Security of any series. (Section 513.)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may, without the consent of the holders of the Debt Securities,
consolidate or merge with or into, or convey, transfer or lease its properties
and assets substantially as an entirety to, any Person that is a corporation,
limited liability company, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction, or may permit any such Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, provided that
any successor Person assumes the Company's obligations on the Debt Securities
and under the Indenture, that after giving effect to the transaction no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing, and that certain
other conditions are met. (Section 801.)
CONCERNING THE TRUSTEE
Unless otherwise specified in the applicable Prospectus Supplement, The
Chase Manhattan Bank, New York, New York, successor to Chemical Bank, will be
the Trustee under the Indenture.
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DESCRIPTION OF CAPITAL STOCK
The following summaries of the Apache Common Stock, Preferred Stock and
Rights (defined below) do not purport to be complete and are qualified in their
entirety by reference to the Restated Certificate of Incorporation of the
Company and the Rights Agreement dated January 31, 1996, between the Company and
Norwest Bank Minnesota, N.A. (the "Rights Agreement"). The Restated Certificate
of Incorporation and the Rights Agreement are listed as exhibits to the
Registration Statement of which this Prospectus is a part. The summaries use
terms which are defined in such exhibits. The following summaries set forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. The particular terms of the Preferred Stock
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Preferred Stock so offered will, to the
extent not described herein, be described in the Prospectus Supplement relating
to such Preferred Stock.
GENERAL
Under the Company's Restated Certificate of Incorporation, the Company is
authorized to issue (i) 215,000,000 shares of Apache Common Stock, of which
97,581,000 shares were outstanding as of March 31, 1997, and (ii) 5,000,000
shares of preferred stock, no par value, none of which are issued and
outstanding as of the date of this Prospectus, although 25,000 shares have been
designated as Series A Junior Participating Preferred Stock and are reserved for
issuance upon exercise of the Rights.
COMMON STOCK
Holders of Apache Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders and are entitled, subject to any
preferential rights of holders of preferred stock, to receive such dividends, if
any, as may be declared from time to time by the Board of Directors, in its
discretion, out of funds legally available therefor. Upon any liquidation or
dissolution of the Company, the holders of Apache Common Stock are entitled,
subject to any preferential rights of holders of preferred stock, to receive
pro-rata all assets remaining available for distribution to stockholders after
payment of all liabilities. Apache Common Stock has no preemptive or other
subscriptive rights, and there are no conversion rights or redemption or sinking
fund provisions with respect to the Apache Common Stock.
All outstanding shares of Apache Common Stock are fully paid and
nonassessable. All holders of Apache Common Stock have full voting rights and
are entitled to one vote for each share held of record on all matters submitted
to a vote of the stockholders. The Board of Directors of the Company is
classified into three groups of approximately equal size, one-third elected each
year. The stockholders do not have the right to cumulate votes in the election
of directors.
The Company typically mails its annual reports to stockholders within 120
days after the end of its fiscal year. Notices of stockholder meetings are
mailed to record holders of Apache Common Stock at their addresses shown on the
books of the transfer agent and registrar. Norwest Bank Minnesota, N.A. is the
transfer agent and registrar for the Apache Common Stock.
PREFERRED STOCK
Under the Company's Restated Certificate of Incorporation, the Company is
authorized to issue 5,000,000 shares of preferred stock, 25,000 shares of which
have been designated as the Company's Series A Junior Preferred Stock, none of
which are outstanding as of the date of this Prospectus, however such shares of
preferred stock are reserved for issuance upon the exercise of the Rights. The
Board, without further action by the stockholders, is authorized to issue shares
of Preferred Stock with such designations, preferences and relative,
participating, optional or other special rights, qualifications, limitations or
restrictions, as may be stated and expressed in the resolution or resolutions
providing for the issuance of such Preferred Stock. The Preferred Stock will not
be convertible into shares of Apache Common Stock. The particular rights,
preferences and privileges of any series of Preferred Stock will be set forth in
the applicable Prospectus Supplement. Such preferences and rights as may be
established could have the effect of impeding the
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acquisition of control of the Company. If so specified in the applicable
Prospectus Supplement, the Preferred Stock may be represented by Depositary
Shares entitling the holder proportionally to all rights and preferences of the
Preferred Stock.
RIGHTS
In December 1995, the Company adopted the Rights Agreement and declared a
dividend of one right (a "Right") for each share of Apache Common Stock
outstanding on January 31, 1996. Each Right entitles the registered holder to
purchase from the Company one ten-thousandth (1/10,000) of a share of Series A
Junior Participating Preferred Stock at a price of $100 per one ten-thousandth
of a share, subject to adjustment. The Rights are exercisable (and transferable
apart from the Apache Common Stock) 10 calendar days following a public
announcement that certain persons or groups have acquired 20 percent or more of
the outstanding shares of Apache Common Stock or 10 business days following
commencement of an offer for 30 percent or more of the outstanding shares of
Apache Common Stock. In addition, if the Company engages in certain business
combinations or a 20 percent shareholder engages in certain transactions with
the Company, the Rights become exercisable for Apache Common Stock or common
stock of the corporation acquiring the Company (as the case may be) at 50
percent of the then-market price. Any Rights that are or were beneficially owned
by a person who has acquired 20 percent or more of the outstanding shares of
Apache Common Stock and who engages in certain transactions or realizes the
benefits of certain transactions with the Company will become void. The Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right at
any time until 10 business days after public announcement that a person has
acquired 20 percent or more of the outstanding shares of Apache Common Stock.
The Rights will expire on January 31, 2006, unless earlier redeemed by the
Company. Unless the Rights have been previously redeemed, all shares of Apache
Common Stock issued by the Company after January 31, 1996 will include Rights.
Unless and until the Rights become exercisable, they will be transferred with
and only with the shares of Apache Common Stock.
CHANGE OF CONTROL
The Company's Restated Certificate of Incorporation includes provisions
designed to prevent the use of certain tactics in connection with a potential
takeover of the Company. Article Twelve of the Restated Certificate of
Incorporation generally stipulates that the affirmative vote of 80 percent of
the Company's voting shares is required to adopt any agreement for the merger or
consolidation of the Company with or into any other corporation which is the
beneficial owner of more than 5 percent of the Company's voting shares. Article
Twelve further provides that such 80 percent approval is necessary to authorize
any sale or lease of assets between the Company and any beneficial holder of 5
percent or more of the Company's voting shares. Article Fourteen of the Restated
Certificate of Incorporation contains a "fair price" provision which requires
that any tender offer made by a beneficial owner of more than 5 percent of the
outstanding voting stock of the Company in connection with any plan of merger,
consolidation or reorganization, any sale or lease of substantially all of the
Company's assets, or any issuance of equity securities of the Company to the 5
percent stockholder must provide at least as favorable terms to each holder of
Common Stock other than the stockholder making the tender offer. Article Fifteen
of the Restated Certificate of Incorporation contains an "anti-greenmail"
mechanism which prohibits the Company from acquiring any voting stock from the
beneficial owner of more than 5 percent of the outstanding voting stock of the
Company, except for acquisitions pursuant to a tender offer to all holders of
voting stock on the same price, terms and conditions, acquisitions in compliance
with Rule 10b-18 of the Exchange Act and acquisitions at a price not exceeding
the market value per share. Article Sixteen of the Restated Certificate of
Incorporation prohibits the stockholders of the Company from acting by written
consent in lieu of a meeting.
Section 203 of the Delaware General Corporation Law prevents an "interested
stockholder" (defined in Section 203, generally, as a person owning 15 percent
or more of a corporation's outstanding voting stock) from engaging in a
"business combination" (as defined in Section 203) with a publicly-held Delaware
corporation for three years following the time such person became an interested
stockholder unless (i) before such person became an interested stockholder, the
board of directors of the corporation approved the
14
<PAGE> 16
transaction in which the interested stockholder became an interested stockholder
or approved the business combination; (ii) upon consummation of the transaction
that resulted in the interested stockholder's becoming an interested
stockholder, the interested stockholder owned at least 85 percent of the voting
stock of the corporation outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of the corporation and
by employee stock plans that do not provide participants with the rights to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer); or (iii) following the transaction in
which such person became an interested stockholder, the business combination is
approved by the board of directors of the corporation and authorized at a
meeting of stockholders by the affirmative vote of the holders of two-thirds of
the outstanding voting stock of the corporation not owned by the interested
stockholder. The provisions of Section 203 may have the effect of delaying,
deferring or preventing a change of control of the Company.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through underwriters or dealers,
(ii) directly to a limited number of institutional purchasers or to a single
purchaser, (iii) through agents designated from time to time, or (iv) through
any combination of the above. An accompanying Prospectus Supplement will set
forth the terms of the offering of the Securities offered thereby, including the
name or names of any underwriters, the purchase price of the Securities and the
net proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers.
If underwriters are used in the sale of Securities, such Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the several obligations
of the underwriters to purchase any Securities offered thereby will be subject
to certain conditions precedent and the underwriters will be obligated to take
and pay for all of such Securities, if any are taken.
Any agent involved in the offer or sale of the Securities will be named,
and any commissions payable by the Company to such agents will be set forth, in
an accompanying Prospectus Supplement. Unless otherwise indicated in such
Prospectus Supplement, any such agent will be acting on a reasonable efforts
basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under such contract will be
subject to the condition that the purchase of the offered Securities shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will not
have any responsibility in respect to the validity of performance of such
contracts.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act.
The place and time of delivery for Securities in respect of which this
Prospectus is delivered will be set forth in the accompanying Prospectus
Supplement.
15
<PAGE> 17
LEGAL MATTERS
Certain legal matters regarding the Securities offered hereby have been
passed upon for the Company by its Vice President and General Counsel, Z. S.
Kobiashvili. As of the date of this Prospectus, Mr. Kobiashvili owns 1,586
shares of Apache Common Stock through the Company's 401(k) savings plan; holds
employee stock options to purchase 41,100 shares of Apache Common Stock, of
which options to purchase 17,475 shares are currently exercisable, and holds a
conditional grant under the Company's 1996 Share Price Appreciation Plan
relating to 18,900 shares of Apache Common Stock, none of which is vested.
Certain legal matters will also be passed upon for the Company by Woodard, Hall
& Primm, P.C., Houston, Texas, and for any of the underwriters or agents by
Brown & Wood LLP, New York, New York.
EXPERTS
The audited consolidated financial statements of the Company, incorporated
by reference into this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said report.
The information incorporated by reference herein regarding the total proved
reserves of the Company was prepared by the Company and reviewed by Ryder Scott
Company Petroleum Engineers ("Ryder Scott"), as stated in their letter reports
with respect thereto, and is so incorporated by reference in reliance upon the
authority of said firm as experts in such matters. The information incorporated
by reference herein regarding the total estimated proved reserves acquired from
Texaco Exploration and Production Inc. was prepared by the Company and reviewed
by Ryder Scott, as stated in their letter reports with respect thereto, and is
so incorporated by reference in reliance upon the authority of said firm as
experts in such matters. The information incorporated by reference herein
regarding the total proved reserves of DEKALB was prepared by DEKALB and for the
four years ended December 31, 1994 was reviewed by Ryder Scott, as stated in
their letter reports with respect thereto, and is so incorporated by reference
in reliance upon the authority of said firm as experts in such matters.
A portion of the information incorporated by reference herein regarding the
total proved reserves of Aquila Energy Resources Corporation ("Aquila") acquired
by the Company was prepared by Netherland, Sewell & Associates, Inc.
("Netherland, Sewell") as of December 31, 1994, as stated in their letter report
with respect thereto, and is so incorporated by reference in reliance upon the
authority of said firm as experts in such matters. Netherland, Sewell did not
review any of the reserves of Aquila acquired during 1995.
16
<PAGE> 18
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION, OR MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY ANY SECURITY IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
Available Information................. 2
Information Incorporated by
Reference........................... 2
Safe Harbor Statement under the
Private Securities Litigation Reform
Act of 1995......................... 3
The Company........................... 3
Use of Proceeds....................... 4
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends........................... 4
Description of Debt Securities........ 4
Description of Capital Stock.......... 13
Plan of Distribution.................. 15
Legal Matters......................... 16
Experts............................... 16
</TABLE>
================================================================================
================================================================================
$500,000,000
[APACHE CORPORATION LOGO]
, 1998
================================================================================
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses, other than underwriting discounts and commissions, in
connection with the issuance and distribution of the Securities are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $147,500
Blue Sky fees and expenses.................................. 25,000
Rating agency fees.......................................... 50,000
Legal fees and expenses..................................... 200,000
Accounting fees and expenses................................ 75,000
Trustee's fees and expenses................................. 12,000
Printing and engraving...................................... 100,000
Miscellaneous............................................... 19,500
--------
Total............................................. $629,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Restated Certificate of Incorporation provides that the
Company shall, to the full extent permitted under the Delaware General
Corporation Law, indemnify its officers, directors, employees and agents.
Section 145 of the Delaware General Corporation Law, inter alia, authorizes
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding (other than an action by or in the right of the corporation) because
such person is or was a director, officer, employee or agent of the corporation
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reason to believe his conduct was
unlawful. Similar indemnity is authorized for such persons against expenses
(including attorneys' fees) actually and reasonably incurred in defense or
settlement of any such pending, completed or threatened action or suit by or in
the right of the corporation if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him. The Company maintains policies
insuring its and its subsidiaries' officers and directors against certain
liabilities for actions taken in such capacities, including liabilities under
the Securities Act of 1933, as amended.
Article VII of the Company's bylaws provides, in substance, that directors,
officers, employees and agents of the Company shall be indemnified to the extent
permitted by Section 145 of the Delaware General Corporation Law. Additionally,
Article Seventeen of the Company's Restated Certificate of Incorporation
eliminates in certain circumstances the monetary liability of directors of the
Company for a breach of their fiduciary duty as directors. These provisions do
not eliminate the liability of a director (i) for a breach of the
II-1
<PAGE> 20
director's duty of loyalty to the Company or its stockholders; (ii) for acts or
omissions by the director not in good faith; (iii) for acts or omissions by a
director involving intentional misconduct or a knowing violation of the law;
(iv) under Section 174 of the Delaware General Corporation Law (relating to the
declaration of dividends and purchase or redemption of shares in violation of
the Delaware General Corporation Law); and (v) for transactions from which the
director derived an improper personal benefit.
Reference is made to Section 6 of the form of Underwriting Agreement filed
as Exhibit 1.1 hereto for a description of the indemnification arrangements the
Company is prepared to make in connection with the proposed offering of the
Securities registered hereby.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
*1.1 -- Form of Underwriting Agreement (Debt).
3.1 -- Restated Certificate of Incorporation of the Company
dated December 1, 1993, as filed with the Secretary of
State of Delaware on December 16, 1993 (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report
on Form 10-K for year ended December 31, 1995, SEC File
No. 1-4300).
3.2 -- Certificate of Ownership and Merger Merging Apache Energy
Resources Corporation into the Company, effective
December 31, 1995, as filed with the Secretary of State
of Delaware on December 21, 1995 (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report
on Form 10-K for year ended December 31, 1995. SEC File
No. 1-4300).
3.3 -- Certificate of Designations, Preferences and Rights of
Series A Junior Participating Preferred Stock of the
Company, effective January 31, 1996, as filed with the
Secretary of State of Delaware on January 22, 1996
(incorporated by reference to Exhibit 3.3 to the
Company's Annual Report on Form 10-K for year ended
December 31, 1995, SEC File No. 1-4300).
3.4 -- Bylaws of the Company, as amended July 17, 1997
(incorporated by reference to Exhibit 4.4 to the
Company's Registration Statement on Form S-8,
Registration No. 333-32557, filed July 31, 1997).
4.1 -- Form of Indenture between the Company and The Chase
Manhattan Bank, as Trustee and successor to Chemical
Bank, governing the Debt Securities (incorporated by
reference to Exhibit 4.1 to Apache's Registration
Statement on Form S-3, Registration No. 33-63923, filed
November 2, 1995).
4.2 -- Form of First Supplemental Indenture between the Company
and The Chase Manhattan Bank, as Trustee (incorporated by
reference to Exhibit 4.1 to Apache's Current Report on
Form 8-K, dated October 31, 1996, SEC File No. 14300).
*5.1 -- Opinion of general counsel regarding legality of
securities being registered.
*12.1 -- Statement of computation of ratio of earnings to combined
fixed charges and preferred stock dividends.
*23.1 -- Consent of Arthur Andersen LLP, Houston, Texas.
*23.2 -- Consent of Ryder Scott Company Petroleum Engineers.
*23.3 -- Consent of Netherland, Sewell & Associates, Inc.
*23.4 -- Consent of general counsel (included in Exhibit 5.1).
*24.1 -- Power of Attorney (included in Part II as a part of the
signature pages of the Registration Statement).
*25.1 -- Statement of Eligibility and Qualification under Trust
Indenture Act of 1939 of The Chase Manhattan Bank,
Trustee, on Form T-1.
</TABLE>
II-2
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
99.1 -- Form of the Company's common stock certificate
(incorporated by reference to Exhibit 4.1 to the
Company's Annual Report on Form 10-K for year ended
December 31, 1995, SEC File No. 1-4300.
99.2 -- Rights Agreement dated January 31, 1996, between the
Company and Norwest Bank Minnesota, N.A., rights agent,
relating to the declaration of a rights dividend to the
Company's common shareholders of record on January 31,
1996 (incorporated by reference to Exhibit (a) to the
Company's Registration Statement on Form 8-A, dated
January 24, 1996, SEC File No. 1-4300).
99.3 -- Form of the Company's Right Certificate (incorporated by
reference to Exhibit (b) to the Company's Registration
Statement on Form 8-A, dated January 24, 1996, SEC File
No. 1-4300).
</TABLE>
- ---------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended, that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, as amended, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, as amended, the information omitted from the form
of prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1)
II-3
<PAGE> 22
or (4), or 497(h) under the Securities Act of 1933, shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions of Article 15, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
II-4
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Houston, State of Texas.
APACHE CORPORATION
By: /s/ RAYMOND PLANK
----------------------------------
Raymond Plank,
Chairman and Chief Executive
Officer
Date: June 26, 1998
POWER OF ATTORNEY
The undersigned directors and officers of Apache Corporation do hereby
constitute and appoint Raymond Plank, G. Steven Farris, Z. S. Kobiashvili and
Roger B. Plank, and each of them, with full power of substitution, our true and
lawful attorneys-in-fact to sign and execute, on behalf of the undersigned, any
and all amendments (including post-effective amendments) to this Registration
Statement; and each of the undersigned does hereby ratify and confirm all that
said attorneys-in-fact shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons, in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RAYMOND PLANK Chairman and Chief Executive June 26, 1998
- ----------------------------------------------------- Officer (Principal Executive
Raymond Plank Officer)
/s/ ROGER B.PLANK Vice President and Chief Financial June 26, 1998
- ----------------------------------------------------- Officer (Principal Financial
Roger B.Plank Officer)
/s/ THOMAS L. MITCHELL Vice President and Controller June 26, 1998
- ----------------------------------------------------- (Principal Accounting Officer)
Thomas L. Mitchell
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ FREDERICK M. BOHEN Director June 26, 1998
- -----------------------------------------------------
Frederick M. Bohen
/s/ G. STEVEN FARRIS Director June 26, 1998
- -----------------------------------------------------
G. Steven Farris
/s/ RANDOLPH M. FERLIC Director June 18, 1998
- -----------------------------------------------------
Randolph M. Ferlic
/s/ EUGENE C. FIEDOREK Director June 26, 1998
- -----------------------------------------------------
Eugene C. Fiedorek
/s/ A.D. FRAZIER, JR. Director June 26, 1998
- -----------------------------------------------------
A.D. Frazier, Jr.
/s/ STANLEY K. HATHAWAY Director June 26, 1998
- -----------------------------------------------------
Stanley K. Hathaway
/s/ JOHN A. KOCUR Director June 26, 1998
- -----------------------------------------------------
John A. Kocur
/s/ GEORGE D. LAWRENCE JR. Director June 26, 1998
- -----------------------------------------------------
George D. Lawrence Jr.
/s/ MARY RALPH LOWE Director June 26, 1998
- -----------------------------------------------------
Mary Ralph Lowe
/s/ F.H. MERELLI Director June 26, 1998
- -----------------------------------------------------
F.H. Merelli
/s/ JOSEPH A. RICE Director June 26, 1998
- -----------------------------------------------------
Joseph A. Rice
</TABLE>
<PAGE> 25
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
*1.1 -- Form of Underwriting Agreement (Debt).
3.1 -- Restated Certificate of Incorporation of the Company
dated December 1, 1993, as filed with the Secretary of
State of Delaware on December 16, 1993 (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report
on Form 10-K for year ended December 31, 1995, SEC File
No. 1-4300).
3.2 -- Certificate of Ownership and Merger Merging Apache Energy
Resources Corporation into the Company, effective
December 31, 1995, as filed with the Secretary of State
of Delaware on December 21, 1995 (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report
on Form 10-K for year ended December 31, 1995. SEC File
No. 1-4300).
3.3 -- Certificate of Designations, Preferences and Rights of
Series A Junior Participating Preferred Stock of the
Company, effective January 31, 1996, as filed with the
Secretary of State of Delaware on January 22, 1996
(incorporated by reference to Exhibit 3.3 to the
Company's Annual Report on Form 10-K for year ended
December 31, 1995, SEC File No. 1-4300).
3.4 -- Bylaws of the Company, as amended July 17, 1997
(incorporated by reference to Exhibit 4.4 to the
Company's Registration Statement on Form S-8,
Registration No. 333-32557, filed July 31, 1997).
4.1 -- Form of Indenture between the Company and The Chase
Manhattan Bank, as Trustee and successor to Chemical
Bank, governing the Debt Securities (incorporated by
reference to Exhibit 4.1 to Apache's Registration
Statement on Form S-3, Registration No. 33-63923, filed
November 2, 1995).
4.2 -- Form of First Supplemental Indenture between the Company
and The Chase Manhattan Bank, as Trustee (incorporated by
reference to Exhibit 4.1 to Apache's Current Report on
Form 8-K, dated October 31, 1996, SEC File No. 14300).
*5.1 -- Opinion of general counsel regarding legality of
securities being registered.
*12.1 -- Statement of computation of ratio of earnings to combined
fixed charges and preferred stock dividends.
*23.1 -- Consent of Arthur Andersen LLP, Houston, Texas.
*23.2 -- Consent of Ryder Scott Company Petroleum Engineers.
*23.3 -- Consent of Netherland, Sewell & Associates, Inc.
*23.4 -- Consent of general counsel (included in Exhibit 5.1).
*24.1 -- Power of Attorney (included in Part II as a part of the
signature pages of the Registration Statement).
*25.1 -- Statement of Eligibility and Qualification under Trust
Indenture Act of 1939 of The Chase Manhattan Bank,
Trustee, on Form T-1.
99.1 -- Form of the Company's common stock certificate
(incorporated by reference to Exhibit 4.1 to the
Company's Annual Report on Form 10-K for year ended
December 31, 1995, SEC File No. 1-4300.
99.2 -- Rights Agreement dated January 31, 1996, between the
Company and Norwest Bank Minnesota, N.A., rights agent,
relating to the declaration of a rights dividend to the
Company's common shareholders of record on January 31,
1996 (incorporated by reference to Exhibit (a) to the
Company's Registration Statement on Form 8-A, dated
January 24, 1996, SEC File No. 1-4300).
99.3 -- Form of the Company's Right Certificate (incorporated by
reference to Exhibit(b) to the Company's Registration
Statement on Form 8-A, dated January 24, 1996, SEC File
No. 1-4300).
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 1.1
APACHE CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT BASIC TERMS
<PAGE> 2
APACHE CORPORATION
Debt Securities
UNDERWRITING AGREEMENT BASIC TERMS
Apache Corporation, a Delaware corporation (the "Company"), may issue
and sell from time to time its debt securities (the "Debt Securities"). The
Debt Securities are issuable under an indenture, dated as of February 15, 1996
(the "Indenture"), between the Company and The Chase Manhattan Bank (formerly
known as Chemical Bank), as trustee (the "Trustee"). Each issue of Debt
Securities may vary as to series, aggregate principal amount, maturity,
interest rate or rates and timing of payments thereof, redemption provisions,
if any, and any other variable terms as set forth in the Terms Agreement (as
defined below) relating thereto which the Indenture contemplates may be set
forth in the Debt Securities as issued from time to time.
Whenever the Company determines to make an offering of Debt
Securities, 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 amount of Offered Securities subject to such
option (the "Option Securities"). As used herein, the term "Offered
Securities" shall include the Option Securities, if any, 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.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 333- )
for the registration of Debt Securities, 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
2
<PAGE> 3
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, and the Indenture has been qualified
under the Trust Indenture Act of 1939 (the "1939 Act"). 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 Debt Securities 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 results of operations, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
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<PAGE> 4
(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 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
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<PAGE> 5
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 and the applicable Delayed Delivery
Contracts (as defined below), if any, have been duly
authorized, executed and delivered by the Company and, upon
execution and delivery by the Underwriters, will be valid and
legally binding agreements of the Company; on and after the
Closing Time, the Indenture will have been duly authorized,
executed and delivered by the Company and, assuming due
execution and delivery by the Trustee, will be a valid and
legally binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement
of creditors' rights generally or by general equity
principles, and except further as enforcement thereof may be
limited by (1) requirements that a claim with respect to any
Debt Securities denominated other than in U.S. dollars (or a
foreign currency or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to
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<PAGE> 6
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States.
The Offered Securities have been duly and validly authorized
for issuance, offer and sale pursuant to this Agreement and
each Delayed Delivery Contract, if any, and when issued,
authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture against payment of the
consideration therefor, the Offered Securities will constitute
valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by
general equity principles, and except further as enforcement
thereof may be limited by (1) requirements that a claim with
respect to any Offered Securities denominated other than in
U.S. dollars (or a foreign currency or composite currency
judgment in respect of such claim) be converted into U.S.
dollars at a rate or exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to
limit, delay or prohibit the making of payments outside the
United States. The Offered Securities and the Indenture will
be substantially in the form heretofore delivered to the
Underwriters and conform in all material respects to all
statements relating thereto contained in the Prospectus; and
each Holder (as defined in the Indenture) of Offered
Securities will be entitled to the benefits of the Indenture.
(i) 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.
(j) 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, each Delayed Delivery
Contract, if any, and the Indenture and the consummation of
the transactions contemplated herein and therein have been
duly authorized by all necessary corporate action of the
Company and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of
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<PAGE> 7
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.
(k) 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").
(l) Except as may be included or incorporated by reference in
the Registration Statement and the Prospectus, there is no
action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending
or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which might,
in the opinion of the Company, result in any material adverse
change in the condition, financial or otherwise, or in the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise, or could reasonably be expected to materially and
adversely affect the properties or assets thereof or could
reasonably be expected to materially and adversely affect the
consummation of this Agreement or the Indenture or any
transaction contemplated hereby or thereby.
(m) 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.
(n) 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 filings would not
materially adversely affect the condition, financial or
otherwise,
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<PAGE> 8
or the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(o) 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.
(p) 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.
(q) 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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<PAGE> 9
(r) 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").
(s) 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.
(t) 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. Offered
Securities which are subject to Delayed Delivery Contracts are herein sometimes
referred to as "Delayed Delivery Offered Securities" and Offered Securities
which are not subject to Delayed Delivery Contracts are herein sometimes
referred to as "Immediate Delivery Offered Securities".
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<PAGE> 10
(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 principal amount of Option Securities set forth therein at
the same price per security (plus, except as otherwise provided in the Terms
Agreement, interest, if any, accrued and unpaid from the Closing Time until the
applicable Date of Delivery), as is applicable to the Offered Securities. 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 principal amount 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
principal amount of Option Securities then being purchased that the principal
amount of Immediate Delivery Offered Securities each such Underwriter has
agreed to purchase, as set forth in the Terms Agreement, bears to the total
principal amount of Immediate Delivery Offered Securities, subject to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases in less than authorized denominations.
(c) Payment of the purchase price for, and delivery of, the Immediate
Delivery Offered 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 Immediate Delivery
Offered Securities to be purchased by them (unless the Offered Securities are
issuable only in the form of one or more global instruments registered in the
name of a depository or a nominee of a depository, in which event the
Underwriters' interest in such global instrument shall be noted in a manner
satisfactory to the Underwriters and their counsel). 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 Immediate Delivery Offered 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 Immediate Delivery Offered
Securities, which if agreed by the Representatives may be in temporary form,
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.
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(d) If authorized by the Terms Agreement, the Underwriters named
therein may solicit offers to purchase Offered Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto, with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to the Representatives at the Closing Time, for the
account of the Underwriters, a fee equal to that percentage of the aggregate
principal amount of Delayed Delivery Offered Securities for which Delayed
Delivery Contracts are made at the Closing Time as is specified in the Terms
Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types set forth in the Prospectus Supplement. At the Closing
Time the Company will enter into Delayed Delivery Contracts (for not less than
the minimum principal amount of Delayed Delivery Offered Securities per Delayed
Delivery Contract specified in the Terms Agreement) with all purchasers
proposed by the Underwriters and previously approved by the Company as provided
below, but not for an aggregate principal amount of Offered Securities in
excess of that specified in the Terms Agreement. The Underwriters will not
have any responsibility for the validity or performance of Delayed Delivery
Contracts.
(e) The Representatives are to submit to the Company, at least two
business days prior to the Closing Time, the names of any institutional
investors with which it is proposed that the Company will enter into Delayed
Delivery Contracts and the principal amount of Delayed Delivery Offered
Securities to be purchased by each of them, and the names of the institutions
with which the making of Delayed Delivery Contracts is approved by the Company
and the principal amount of Delayed Delivery Offered Securities to be covered
by each such Delayed Delivery Contract.
(f) The principal amount of Offered Securities agreed to be
purchased by the respective Underwriters pursuant to this Agreement shall be
reduced by the principal amount of Delayed Delivery Offered Securities covered
by Delayed Delivery Contracts, as to each Underwriter as set forth in a written
notice delivered by the Underwriters to the Company; provided, however, that
the total principal amount of Immediate Delivery Offered Securities to be
purchased by all Underwriters shall be the total amount of the Offered
Securities covered by this Agreement, less the total principal amount of
Delayed Delivery Offered Securities covered by Delayed Delivery Contracts.
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
principal amount of Offered Securities and their terms not
otherwise specified in the Indenture, if applicable, the names
of the Underwriters and the principal amount 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, any delayed delivery
arrangements, and such other information as the
Representatives and the Company deem appropriate in connection
with the offering of the Offered
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<PAGE> 12
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 Debt Securities, 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) the
effectiveness of any amendment to the Registration Statement,
(ii) the transmittal to the Commission for filing of any
supplement to the Prospectus or
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<PAGE> 13
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 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.
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(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 debt securities of the Company substantially similar to
the Offered Securities (other than the Offered Securities that
are to be sold pursuant to such agreement or commercial paper
in the ordinary course of business).
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 applicable Delayed
Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company.
(iii) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming the
Indenture has been duly authorized, executed and delivered by
the Trustee) constitutes a legal, valid and binding agreement
of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating
to or affecting enforcement of creditors' rights generally or
by general equity principles, and further as enforcement
thereof may be limited by (1) requirements that a claim with
respect to any Offered Securities denominated other than in
U.S. dollars (or a foreign currency or composite currency
judgment in respect of such claim) be converted into U.S.
dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to
limit, delay or prohibit the making of payments outside the
United States.
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(iv) The Offered Securities, in the form(s) certified
by the Company as of the Closing Time, have been duly
authorized for issuance, offer and sale pursuant to this
Agreement and, when issued, authenticated and delivered
pursuant to the provisions of this Agreement, any Delayed
Delivery Contract and the Indenture against payment of the
consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable in accordance
with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles, and except further
as enforcement thereof may be limited by (1) requirements that
a claim with respect to any Debt Securities denominated other
than in U.S. dollars (or a foreign currency or composite
currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (2) governmental
authority to limit, delay or prohibit the making of payments
outside the United States; and each holder of Offered
Securities will be entitled to the benefits of the Indenture.
(v) The Offered Securities and the Indenture conform
in all material respects to the statements relating thereto in
the Prospectus; and the statements in the Prospectus under the
captions "Description of Notes" and "Description of Debt
Securities", insofar as they purport to summarize certain
provisions of documents specifically referred to therein, are
accurate summaries of such provisions.
(vi) The Indenture has been duly qualified under the
1939 Act.
(vii) 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.
(viii) 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, and except for those parts of
the Registration Statement that constitute the Form T-1, as to
which such counsel need not express any opinion), as of their
respective effective or issue dates, appeared on their face to
be appropriately responsive to the requirements of the 1933
Act and the 1933 Act Regulations.
(ix) 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.
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<PAGE> 16
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 Notes and the
Indenture upon the opinion of Brown & Wood LLP. Such opinion
shall be limited to the General Corporation Law of the State
of Delaware, the laws of the State of Texas and the laws of
the United States of America.
(2) The favorable opinion of Zurab S.
Kobiashvili, General Counsel of the Company, to the effect that:
(i) The Company has the corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under this Agreement and the Delayed
Delivery Contracts, if any.
(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) 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.
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<PAGE> 17
(v) Neither the Company nor any of its subsidiaries
is required to be registered under the 1940 Act.
(vi) No consent, approval, authorization, order or
decree of any court or governmental authority or agency is
required that has not been obtained in connection with the
consummation by the Company of the transactions contemplated
by this Agreement, any Delayed Delivery Contract or the
Indenture, except such as have been obtained or rendered, as
the case may be, or as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act, the 1934 Act Regulations
or state securities laws; and the execution and delivery of
this Agreement, the Delayed Delivery Contract, if applicable,
and the Indenture and the consummation of the transactions
contemplated herein and therein have been duly authorized by
all necessary corporate action of the Company and, to the best
knowledge and information of such counsel, will not conflict
with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it
or any of them may be bound or to which any of the property or
assets of the Company or any such subsidiary is subject, nor
will such action result in any violation of the provisions of
the charter or by-laws of the Company or any applicable law,
administrative regulation or, to the best knowledge and
information of such counsel, administrative or court order or
decree.
(vii) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws.
(viii) To the best knowledge and information of such
counsel, neither the Company nor any of its subsidiaries is in
violation of any law, ordinance, governmental rule or
regulation or court decree to which it may be subject or has
failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its
property or to the conduct of its business, which violation or
failure would materially adversely affect the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and, to the best
knowledge and information of such counsel, the Company and its
subsidiaries own or possess or have obtained all 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.
(ix) To the best of such counsel's knowledge and
information, there is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or
foreign, now pending, or threatened against or affecting, the
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<PAGE> 18
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, the Delayed Delivery
Contracts, if applicable, or the Indenture or any transaction
contemplated hereby or thereby.
(x) To the best of such counsel's knowledge and
information, there are no contracts or other documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or
references thereto are correct in all material respects, and,
to the best of such counsel's knowledge and information, no
default exists in the due performance or observance of any
material obligation, agreement, covenant or conditions
contained in any contract, or other documents so described,
referred to, filed or incorporated by reference where the
consequences of such default would have a material adverse
effect on the condition, financial or otherwise, or the
results of 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 (viii), inclusive,
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. 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
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<PAGE> 19
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) or those parts of the Registration Statement which
constitute the Form T-1).
(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 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 hereof 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.
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(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 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
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<PAGE> 21
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
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 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,
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<PAGE> 22
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 and the Delayed Delivery Contract(s), if applicable;
(c) the preparation, printing, issuance and delivery of
the Offered Securities, including any fees and expenses
relating to the eligibility and issuance of Offered Securities
in book-entry form;
(d) the fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and
of any calculation agent or exchange rate agent;
(e) 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
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<PAGE> 23
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) the preparation, reproducing and delivery to the
Underwriters of copies of the Indenture and all amendments,
supplements and modifications thereto;
(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 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);
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(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 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
24
<PAGE> 25
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 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
25
<PAGE> 26
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
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
26
<PAGE> 27
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 Immediate Delivery
Offered 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 Immediate Delivery Offered 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
(b) if the amount of Defaulted Securities exceeds 10% of
the number of Immediate Delivery Offered 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.
27
<PAGE> 28
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.
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
, 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 $__________
aggregate principal amount of its debt securities (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 principal amount of Offered Securities set forth below opposite
their respective names at ___% of the principal amount thereof together with
accrued interest thereon from __________, 19__ to the Closing Time:
Principal
Amount of
Underwriter Debt Securities
----------- ---------------
---------------
Total $
========
The Offered Securities shall have the following terms:
Principal amount:
Form and denomination:
Date of maturity:
Interest rate, rates or formula
(or method of calculation
of interest accrual):
Date from which interest accrues:
Interest payment dates, if any:
Initial price to public:
Closing Time:
Place of delivery and payment:
29
<PAGE> 30
Company account for wire transfer of payment:
Redemption provisions, if any:
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:
Delayed Delivery Contracts: [authorized] [not authorized]
Delivery date:
Expiration date:
Compensation to Underwriters:
Minimum contract:
Maximum aggregate principal amount:
Other terms, if any:
All the provisions contained in "Apache Corporation-Debt
Securities--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--Debt Securities--
Underwriting Agreement Basic Terms]
31
<PAGE> 32
EXHIBIT B
APACHE CORPORATION
[Title of Offered Securities]
DELAYED DELIVERY CONTRACT
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from Apache Corporation (the
"Company"), and the Company agrees to sell to the undersigned on ____________,
19__ (the "Delivery Date"), $_____________ principal amount of the Company's
__% Offered Securities due ___________ __, 19__ (the "Offered Securities"),
offered by the Company's Prospectus dated _________ __, 19__, as supplemented
by its Prospectus Supplement dated __________ __, 19__, receipt of which is
hereby acknowledged, at a purchase price of _____% of the principal amount
thereof, plus accrued interest from __________, ______, to the Delivery Date,
and on the further terms and conditions set forth in this contract.
Payment for the securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by wire
transfer in immediately available funds on the Delivery Date, upon delivery to
the undersigned of the Offered Securities to be purchased by the undersigned in
definitive or global form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than three full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Offered Securities on the Delivery Date shall be subject only to the
conditions that (1) the purchase of Offered Securities to be made by the
undersigned shall not on the Delivery Date be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Company, on or
before ___________, ____, shall have sold to the Underwriters of the Offered
Securities (the "Underwriters") such principal amount of the Offered Securities
as is to be sold to them pursuant to the Terms Agreement dated ____________,
____ between the Company and the Underwriters. The obligation of the
undersigned to take delivery of and make payment for Offered Securities shall
not be affected by the failure of any purchaser to take delivery of and make
payment for Offered Securities pursuant to other contracts similar to this
contract. The undersigned represents and warrants to the Underwriters that its
investment in the Offered
32
<PAGE> 33
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which govern such
investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice
to such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Company that all necessary corporate action for the due execution and
delivery of this contract and the payment for and purchase of the Offered
Securities has been taken by it and no further authorization or approval of any
governmental or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and mailing or delivery of a copy as provided below, this contract will
constitute a valid and binding agreement of the undersigned in accordance with
its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for an aggregate principal amount of Offered Securities in excess of
$__________ and that the acceptance of any Delayed Delivery Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first come first-served basis. If this contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance on a copy hereof
and mail or deliver a signed copy hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
33
<PAGE> 34
This Agreement shall be governed by the laws of the State New York
applicable to agreements made and performed in said State.
Yours very truly,
------------------------------
(Name of Purchaser)
By
---------------------------
(Title)
------------------------------
------------------------------
(Address)
Accepted as of the date
first above written.
Apache Corporation
By:
---------------------------
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date shall be discussed is as
follows: (Please print.)
Telephone No.
Name (Including Area Code)
- ---- ---------------------
34
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Apache Corporation]
June 26, 1998
Apache Corporation
2000 Post Oak Blvd., Suite 100
Houston, Texas 77056-4400
Lades and Gentlemen:
I am General Counsel to Apache Corporation, a Delaware corporation
(the "Company"), and am rendering this opinion in my capacity as such in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of $500,000,000 aggregate initial offering price of the
Company's preferred stock, no par value ("Preferred Stock"), and the Company's
senior unsecured debt securities (the "Debt Securities" and together with the
Preferred Stock, the "Securities") described in the registration statement on
Form S-3 (the "Registration Statement") of the Company. The Securities are to
be offered upon the terms and subject to the conditions set forth in one or
more underwriting agreements by and between the Company and the persons named
as underwriters therein ("Underwriting Agreement"). The Debt Securities are to
be issued in one or more series pursuant to an Indenture between the Company
and The Chase Manhattan Bank, Trustee. If so specified in the applicable
prospectus supplement, the Preferred Stock may be represented by depositary
shares entitling the holders proportionally to all rights and preferences of
the Preferred Stock.
In connection herewith, I have examined the Registration Statement
covering the Securities which is to be filed with the Securities and Exchange
Commission, originals or copies certified or otherwise identified to my
satisfaction of the restated certificate of incorporation and the by-laws of
the Company, each as amended to date, the corporate proceedings with respect to
the offering of the Securities and such other documents and instruments as I
have deemed it necessary or appropriate for the expression of the opinions
contained herein.
I have assumed the authenticity and completeness of all records,
certificates and other instruments presented to be originals, the conformity to
original documents of all records, certificates, and other instruments
submitted to me as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments
<PAGE> 2
June 26, 1998
Page 2
submitted to me as copies and the correctness of all statements of fact
contained in all records, certificates and other instruments that I have
examined.
Based on the foregoing, and having regard for such legal
considerations as I have deemed relevant, I am of the opinion that:
1. The Debt Securities, when duly authorized and duly executed by the
proper officers of the Company, authenticated and delivered by the Trustee in
accordance with the Indenture, and issued and sold pursuant to the terms of the
Underwriting Agreement against payment of the consideration therefor, will
constitute valid and legally binding obligations of the Company enforceable in
accordance with their terms.
2. The Preferred Stock proposed to be issued, when duly authorized,
issued and delivered against payment therefor in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully paid and
non-assessable.
The opinion expressed in paragraph (1) above regarding the
enforceability of the Debt Securities is subject to the exception of the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of creditors
right's generally or by general equity principals, and except further as
enforcement thereof may be limited by (i) requirements that claims with respect
to any Debt Securities denominated other than in U. S. Dollars (or a foreign
currency or composite currency in respect of such claim) be converted into U.S.
Dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law or (ii) governmental authority to limit, delay or prohibit the
making of payments outside the United States.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Prospectus included as 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.
Very truly yours,
/s/ Z. S. Kobiashvili
<PAGE> 1
EXHIBIT 12.1
APACHE CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
------------------
1998 1997 1997 1996 1995 1994 1993
------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Pretax income from continuing
operations(1).................... $30,116 $ 88,082 $258,640 $200,195 $ 33,143 $ 66,234 $62,067
Add: Fixed charges excluding
capitalized interest............. 21,416 17,262 78,531 68,091 77,220 39,008 34,355
------- -------- -------- -------- -------- -------- -------
Adjusted earnings................ $51,532 $105,344 $337,171 $268,286 $110,363 $105,242 $96,422
======= ======== ======== ======== ======== ======== =======
FIXED CHARGES
Interest expense including
capitalized interest(2).......... $30,144 $ 23,641 $105,148 $ 89,829 $ 88,057 $ 37,838 $34,205
Amortization of debt expense....... 1,262 1,327 6,438 5,118 4,665 3,987 3,896
Interest component of lease rental
expenditures(3).................. 860 934 3,438 3,856 3,539 3,217 2,533
------- -------- -------- -------- -------- -------- -------
$32,266 $ 25,902 $115,024 $ 98,803 $ 96,261 $ 45,042 $40,634
======= ======== ======== ======== ======== ======== =======
Ratio of earnings to combined fixed
charges and preferred stock
dividends.......................... 1.60 4.07 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 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.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 27,
1998 on the audited consolidated financial statements of Apache Corporation and
subsidiaries included in the Apache Corporation Annual Report on Form 10-K for
the year ended December 31, 1997, and to all references to our Firm included in
this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
June 24, 1998
<PAGE> 1
[RYDER SCOTT COMPANY LETTERHEAD]
Exhibit 23.2
Consent of Ryder Scott Company Petroleum Engineers
As independent petroleum engineers, we hereby consent to the
incorporation by reference in this registration statement of our Firm's review
of the proved oil and gas reserve quantities of Apache Corporation as of
January 1, 1998, and to all references to our Firm in this registration
statement.
/s/ Ryder Scott Company
Petroleum Engineers
-----------------------
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
June 25, 1998
<PAGE> 1
[NETHERLAND, SEWELL & ASSOCIATES, INC. LETTERHEAD]
EXHIBIT 23.3
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
As independent petroleum engineers and geologists, we hereby consent to the
incorporation by reference in this Registration Statement of our Firm's review
of the proved oil and gas reserve quantities, as of January 1, 1997, for
certain of Apache Corporation's interests located in the Arab Republic of
Egypt, and to all references to our Firm in this Registration Statement.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ CLARENCE M. NETHERLAND
---------------------------------
Clarence M. Netherland
Chairman
Dallas, Texas
June 25, 1998
<PAGE> 1
EXHIBIT 25.1
----------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
-------------------------------------------------------
APACHE CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 41-0747868
(State or other jurisdiction of I.R.S. employer
incorporation or organization) identification No.)
2000 POST OAK BOULEVARD, SUITE 100
HOUSTON, TEXAS 77056-4400
(Address of principal executive offices) (Zip Code)
-----------------------------------
DEBT SECURITIES
(Title of the indenture securities)
-----------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System,
20th and C Street NW, Washington, D.C., 20551 Federal Reserve Bank of New York,
District No. 2, 33 Liberty Street, New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street NW
Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-06249, which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference. On
July 14, 1996, in connection with the merger of Chemical Bank and The Chase
Manhattan Bank (National Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which
is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York, on the 23RD day
of JUNE, 1998.
THE CHASE MANHATTAN BANK
By /S/ ANDREW M. DECK
---------------------
ANDREW M. DECK
VICE PRESIDENT
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<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1998, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 12,037
Interest-bearing balances ......................... 4,054
Securities:
Held to maturity securities ............................ 2,340
Available for sale securities .......................... 50,134
Federal funds sold and securities purchased under
agreements to resell .............................. 24,982
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,958
Less: Allowance for loan and lease losses 2,797
Less: Allocated transfer risk reserve.... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 125,161
Trading Assets ......................................... 61,820
Premises and fixed assets (including capitalized
leases) ........................................... 2,961
Other real estate owned ................................ 347
Investments in unconsolidated subsidiaries and
associated companies .............................. 242
Customers' liability to this bank on acceptances
outstanding ....................................... 1,380
Intangible assets ...................................... 1,549
Other assets ........................................... 11,727
--------
TOTAL ASSETS ........................................... $298,734
========
</TABLE>
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<PAGE> 5
<TABLE>
LIABILITIES
<S> <C>
Deposits
In domestic offices ........................................... $96,682
Noninterest-bearing ............................$38,074
Interest-bearing ............................... 58,608
In foreign offices, Edge and Agreement, -------
subsidiaries and IBF's ........................................ 72,630
Noninterest-bearing .................................$ 3,289
Interest-bearing ................................69,341
Federal funds purchased and securities sold under
agreements to repurchase ...................................... 42,735
Demand notes issued to the U.S. Treasury ........................... 872
Trading liabilities ................................................ 45,545
Other Borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ................. 4,454
With a remaining maturity of more than one year ...............
through three years ....................................... 231
With a remaining maturity of more than three years ............ 106
Bank's liability on acceptances executed and outstanding ........... 1,380
Subordinated notes and debentures .................................. 5,708
Other liabilities .................................................. 11,295
TOTAL LIABILITIES .................................................. 281,638
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ...................... 0
Common stock ....................................................... 1,211
Surplus (exclude all surplus related to preferred stock) .......... 10,291
Undivided profits and capital reserves ............................. 5,579
Net unrealized holding gains (losses)
on available-for-sale securities ................................... (1)
Cumulative foreign currency translation adjustments ................ 16
TOTAL EQUITY CAPITAL ............................................... 17,096
---------
TOTAL LIABILITIES AND EQUITY CAPITAL ............................... $ 298,734
=========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
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