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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 29, 1999
APACHE CORPORATION
(Exact name of registrant as specified in Charter)
DELAWARE 1-4300 41-0747868
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
2000 POST OAK BOULEVARD
SUITE 100
HOUSTON, TEXAS 77056-4400
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (713) 296-6000
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
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99.1* Preliminary Prospectus Supplement (Common Stock), dated
April 29, 1999, to Prospectus dated April 9, 1999.
99.2* Preliminary Prospectus Supplement (Depositary Shares),
dated April 29, 1999, to Prospectus dated April 9,
1999.
99.3* Press Release, dated April 29, 1999, "Apache to Acquire
Gulf of Mexico Properties from Shell for $715 Million
plus 1 Million Apache Shares".
99.4* Press Release, dated April 29, 1999, "Apache Reports
First Quarter Loss of 4 Cents Per Share".
99.5** Form of Underwriting Agreement Basic Terms, including
form of Terms Agreement (Common Stock).
99.6** Form of Underwriting Agreement Basic Terms, including
form of Terms Agreement (Convertible Preferred Stock).
99.7** Form of Deposit Agreement between the Registrant and
Norwest Bank Minnesota, National Association, as
Depositary, including form of depositary receipt for
$_________ Depositary Share, each representing a
one-fiftieth interest in a share of Automatically
Convertible Equity Securities, Conversion Preferred
Stock, Series C
99.8** Form of stock certificate for Automatically Convertible
Equity Securities, Conversion Preferred Stock, Series
C.
99.9** Form of Certificate of Designations, Preferences and
Rights describing the rights and preferences of the
Registrant's Automatically Convertible Equity
Securities, Conversion Preferred Stock, Series C.
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* previously filed
** filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APACHE CORPORATION
Date: May 12, 1999 /s/ Z.S. Kobiashvili
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Z.S. Kobiashvili
Vice President and General Counsel
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EXHIBIT 99.5
APACHE CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT BASIC TERMS
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APACHE CORPORATION
Common Stock
UNDERWRITING AGREEMENT BASIC TERMS
Apache Corporation, a Delaware corporation (the "Company"), may issue
and sell from time to time its shares of common stock, $1.25 par value per share
(the "Common Stock") and related rights to purchase its Common Stock (the
"Rights"). Each issue of Common Stock may vary as set forth in the Terms
Agreement (as defined below) relating thereto.
Whenever the Company determines to make an offering of Common Stock and
Rights, the Company will enter into an agreement (the "Terms Agreement")
providing for the sale of such securities (the "Offered Securities") to, and the
purchase and offering thereof by, one or more underwriters specified in the
Terms Agreement (the "Underwriters", which term shall include any Underwriters
substituted pursuant to Section 10 hereof). The Terms Agreement relating to the
Offered Securities shall specify the names of the Underwriters participating in
such offering, the amount of Offered Securities which each such Underwriter
severally agrees to purchase, the price at which the Offered Securities are to
be purchased by the Underwriters from the Company, the initial public offering
price, the time and place of delivery and payment, such other information as is
indicated in Exhibit A hereto and such other terms as are agreed by the Company
and the Underwriters. In addition, each Terms Agreement shall specify whether
the Company has agreed to grant to the Underwriters an option to purchase
additional Offered Securities to cover over-allotments, if any, and the number
of Offered Securities subject to such option described in Section 2(b) hereof
(the "Option Securities"). As used herein, the term "Offered Securities" shall
include the Option Securities, if any, and the number of firm shares of Common
Stock and Rights specified in the Terms Agreement (the "Firm Securities"); and
"Representatives" shall mean the Underwriter or Underwriters so specified in the
Terms Agreement or, if no Underwriter is so specified, shall mean each
Underwriter. The Terms Agreement may be in the form of an exchange of any
standard form of written telecommunication between the Underwriters and the
Company. The offering of the Offered Securities will be governed by the Terms
Agreement, as supplemented hereby (collectively, this "Agreement"), and this
Agreement shall inure to the benefit of and be binding upon each Underwriter
participating in the offering of the Offered Securities.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-75633) for the registration of Common Stock and Rights and the Company's
preferred stock, depositary shares and debt securities, including the Offered
Securities, under the Securities Act of 1933, as amended (the
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"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and has prepared and filed such amendments thereto as may
have been required to the date hereof. Such registration statement, as amended,
has been declared effective by the Commission. As provided in Section 3(a), a
prospectus supplement reflecting the terms of the Offered Securities, the terms
of the offering thereof and the other matters set forth therein has been
prepared and will be filed pursuant to Rule 424 under the 1933 Act. Such
prospectus supplement, in the form first filed after the date of the Terms
Agreement pursuant to Rule 424, is herein referred to as the "Prospectus
Supplement". Such registration statement, as amended at the date of the Terms
Agreement, including the exhibits thereto and the documents incorporated by
reference therein, is herein called the "Registration Statement". Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The basic prospectus included in the Registration
Statement, 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.
(b) Each "significant subsidiary" of the Company as defined in
Rule 405 of Regulation C of the 1933 Act Regulations
(collectively, the "Significant
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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) The Company meets the requirements for use of Form S-3
under the 1933 Act. Each of the Registration Statement and any
Rule 462(b) Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the
Commission for additional information has been complied with.
(d) There are no contracts, agreements or understandings
between the Company or any of its subsidiaries, on the one
hand, and any person, on the other hand, granting such person
the right to require the Company or any of its subsidiaries to
file a registration statement under the 1933 Act with respect
to any securities (other than contractual obligations by the
Company to file registration statements on Form S-8 covering
issuances of Common Stock pursuant to its employee or director
stock, bonus or compensation plans) or to require the Company
or any of its subsidiaries to include such securities in any
registration statement filed by the Company under the 1933 Act
or in any public offering of securities.
(e) 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
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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.
(f) 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 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.
(g) 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.
(h) 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 Prospectus present fairly the information
shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(i) The petroleum engineers who have consented to being named
as having reviewed certain reserve data included or
incorporated by reference in the
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Prospectus are independent engineers with respect to the
Company and its subsidiaries.
(j) This Agreement has been duly authorized, executed and
delivered by the Company and, upon execution and delivery by
the Underwriters, will be a valid and legally binding
agreement of the Company.
(k) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus (except for
issuances, if any, described in the Prospectus, pursuant to
this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options
referred to in the Prospectus); the shares of issued and
outstanding capital stock set forth therein have been duly
authorized and validly issued and are fully paid and
non-assessable; and the Offered Securities conform to all
statements relating thereto contained in the Prospectus and
such statements conform to the provisions of the instruments
defining the same.
(l) The Offered Securities have been duly and validly
authorized for issuance, offer and sale pursuant to this
Agreement and the applicable Terms Agreement and, when issued
and delivered pursuant to the provisions of this Agreement and
the applicable Terms Agreement against payment of the
consideration therefor, the Offered Securities will be validly
issued, fully paid and non-assessable; the Rights have been
duly and validly authorized for issuance by the Company in
accordance with the Rights Agreement, dated as of January 31,
1996, between the Company and Norwest Bank Minnesota, N.A.;
and the issuance of the Offered Securities will not be subject
to any preemptive or similar rights.
(m) 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, and (3) except for regular dividends on
the Common Stock and the Company's preferred stock, there has
been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(n) 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
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prospects of the Company and its subsidiaries considered as
one enterprise; and the execution and delivery of this
Agreement and the Terms Agreement and the consummation of the
transactions contemplated herein and therein have been duly
authorized by all necessary corporate action of the Company
and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound or to which
any of the property or assets of the Company or any subsidiary
thereof is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company or any law, administrative regulation or
administrative or court order or decree, where the
consequences of such conflict, breach, creation, imposition,
violation or default would have a material adverse effect on
the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(o) No consent, approval, authorization, order, decree,
registration or qualification of or with 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
or Blue Sky laws.
(p) Except as may be included or incorporated by reference in
the Registration Statement and the Prospectus, there is no
action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending
or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which might,
in the opinion of the Company, result in any material adverse
change in the condition, financial or otherwise, or in the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise, or could reasonably be expected to materially and
adversely affect the properties or assets thereof or could
reasonably be expected to materially and adversely affect the
consummation of this Agreement or the Terms Agreement or any
transaction contemplated hereby or thereby.
(q) 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.
(r) 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
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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, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(s) The Company and its subsidiaries 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.
(t) 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.
(u) 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
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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.
(v) 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").
(w) 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.
(x) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or
any of its subsidiaries has a material relationship to
evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the
Year 2000 Problem. As a result of such review, the Company has
no reason to believe, and does not believe, that the Year 2000
Problem will 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 or result in any
material loss or interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in
the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in
the operation of mechanical or electrical systems of any kind
will not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1,
2000.
(y) 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
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one enterprise, and (2) to the best of the Company's
knowledge, there are no events or circumstances that could
reasonably be expected to be the basis of an order for
clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to
any Hazardous Materials or the violation of any Environmental
Laws, which, singly or in the aggregate, could reasonably be
expected to have a material adverse effect on the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
Any certificate signed by any director or officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company as to the matters covered
thereby.
SECTION 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the Offered
Securities pursuant to this Agreement shall be deemed to have been made on the
basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein and therein set forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the Terms Agreement, an option to the
Underwriters named in the Terms Agreement, severally and not jointly, to
purchase up to the number of Option Securities set forth therein at the same
price per share as is applicable to the Offered Securities plus accrued
dividends, if any. Such option, if granted, will expire 30 days after the date
of the Terms Agreement, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Offered Securities upon
notice by the Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days and not
earlier than two full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined, unless otherwise
agreed upon by the Representatives and the Company. If the option is exercised
as to all or any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase the proportion of the total
number of Option Securities then being purchased that the number of Firm
Securities each such Underwriter has agreed to purchase, as set forth in the
Terms Agreement, bears to the total number of Firm Securities, subject to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of, the Firm
Securities to be purchased by the Underwriters shall be made at the place set
forth in the Terms Agreement, or at such other place as shall be agreed upon by
the Representatives and the Company, on the third business day (unless postponed
in accordance with the provisions of Section 10) following the date of the Terms
Agreement or such other time as shall be agreed upon by the Underwriters and
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the Company (such time and date being referred to as the "Closing Time"). Except
as specified in the Terms Agreement, payment shall be made to the Company by
wire transfer in same day funds to the account of the Company specified in the
Terms Agreement against delivery to the Underwriters for the respective accounts
of the Underwriters of the Firm Securities to be purchased by them. In addition,
in the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
representing, such Option Securities shall be made at such place as shall be
agreed upon by the Representatives and the Company, on each Date of Delivery as
agreed by the Representatives and the Company. The Firm Securities and the
Option Securities, if any, shall be in such denominations and registered in such
names as the Underwriters may request in writing at least two business days
prior to the Closing Time or relevant Date of Delivery, as the case may be. The
Firm Securities and the Option Securities, if any, will be made available for
examination and packaging by the Representatives on or before the first business
day prior to the Closing Time or relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of the Terms
Agreement, the Company will prepare a Prospectus Supplement in
form approved by the Representatives setting forth the number
of Firm Securities, the names of the Underwriters and the
number of the Offered Securities which each severally and not
jointly has agreed to purchase, the price per share 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 Option
Securities, and such other information as the Representatives
and the Company deem appropriate in connection with the
offering of the Offered Securities. The Company will promptly
transmit copies of the Prospectus Supplement to the Commission
for filing pursuant to Rule 424 of the 1933 Act Regulations
and will furnish to the Underwriters named therein as many
copies of the Prospectus (including the Prospectus Supplement)
as the Representatives shall reasonably request.
(b) The Company will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so
as to permit the completion of the distribution of the Offered
Securities as contemplated in this Agreement and in the
Prospectus. If, at any time when a 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
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<PAGE> 12
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 the 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 Common Stock, any
amendment to the Registration Statement (including any filing
under Rule 462(b)) or any amendment or supplement to the
Prospectus, whether pursuant to the 1934 Act, the 1933 Act or
otherwise; will furnish the Underwriters with copies of any
such amendment or supplement or other documents proposed to be
filed a reasonable time in advance of such proposed filing or
use, as the case may be; and will not file any such amendment
or supplement or other documents in a form to which the
Representatives or counsel to the Underwriters reasonably
object.
(e) While the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Securities,
the Company will notify the Representatives immediately, and
promptly confirm the notice in writing, of (i) the
effectiveness of any amendment to the Registration Statement,
(ii) the transmittal to the Commission for filing of any
supplement to the Prospectus or any document to be filed
pursuant to the 1934 Act which will be incorporated by
reference into the Registration Statement or the Prospectus,
(iii) the receipt of any comments from the Commission with
respect to the Registration Statement, the Prospectus or the
Prospectus Supplement, (iv) any request by the Commission for
any amendment to the Registration Statement, or any amendment
or supplement to the Prospectus or for additional information,
(v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose and (vi)
any change in the rating assigned by any nationally recognized
statistical rating organization to any debt securities of the
Company or the public announcement by any nationally
recognized statistical rating organization that it has under
surveillance or review, with possible negative implications,
its rating of any debt securities of the Company. The Company
will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(f) Prior to 10:00 A.M, New York City time, on the business
day next succeeding the date of this Agreement and from time
to time, the Company will deliver to
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<PAGE> 13
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 has delivered to each Underwriter, without
charge, as many copies of each preliminary Prospectus
Supplement as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act.
(h) 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.
(i) 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.
(j) If specified in the Terms Agreement, during the 90-day
period following the date of the Terms Agreement, the Company
will not, without the prior written consent of the
Representatives, (i) directly or indirectly, issue, offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common
Stock or any such substantially similar securities or file any
registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the
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<PAGE> 14
economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Offered Securities, (B) any shares
of Common Stock issued by the Company upon the exercise of an
option or warrant or the conversion of a security outstanding
on the date hereof and referred to in the Prospectus, (C) any
shares of Common Stock issued or options to purchase Common
Stock granted pursuant to existing employee benefit plans of
the Company referred to in the Prospectus, (D) any shares of
Common Stock issued pursuant to any non-employee director
stock plan or dividend reinvestment plan, (E) any shares of
Convertible Preferred Stock or Common Stock or Depositary
Shares issued pursuant to the Company's existing dividend
reinvestment program, or (F) any shares of Common Stock
issuable in connection with any asset purchase or other
transaction described in the Prospectus.
(k) The Company will use the net proceeds received by it from
the sale of the Offered Securities in the manner specified in
the Prospectus under "Use of Proceeds".
(l) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) and the Company
shall at the time of filing either pay the Commission a filing
fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the 1933 Act.
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) The Registration Statement and any Rule 462(b)
Registration Statement have become effective and, 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
and any request on the part of the Commission for additional
information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have
been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to
rely upon Rule 434, a term sheet shall have been filed with
the Commission in accordance with Rule 424(b).
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<PAGE> 15
(b) At the Closing Time, the Representatives shall have
received:
(1) The favorable opinion, dated as of the Closing
Time, of Mayor, Day, Caldwell & Keeton, L.L.P., counsel to the
Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) This Agreement and the Terms Agreement have been
duly authorized, executed and delivered by the Company.
(iii) The Offered Securities have been duly and
validly authorized for issuance, offer and sale pursuant to
this Agreement and the applicable Terms Agreement and, when
issued and delivered pursuant to the provisions of this
Agreement and the applicable Terms Agreement against payment
of the consideration therefor, will be validly issued, fully
paid and non-assessable; the Rights have been duly and validly
authorized for issuance by the Company in accordance with the
Rights Agreement, dated as of January 31, 1996, between the
Company and Norwest Bank Minnesota, N.A.; and the issuance of
the Offered Securities will not be subject to any preemptive
or similar rights.
(iv) The Offered Securities conform in all material
respects to the statements relating thereto in the Prospectus;
and the statements in the Prospectus under the captions
"Description of Capital Stock -- Common Stock" and
"Description of Capital Stock -- Stockholder Rights Plan",
insofar as they purport to summarize certain provisions of
instruments specifically referred to therein, are fair and
correct summaries of such provisions.
(v) The Registration Statement, including any Rule
462(b) Registration Statement, has been declared effective by
the Commission under the 1933 Act and, to the best of such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the
Commission.
(vi) The execution and delivery of this Agreement and
the Terms Agreement, the issuance of Offered Securities
covered by the Terms Agreement, the incurrence of the
obligations set forth herein and therein, and the consummation
of the transactions herein and therein contemplated do not and
will not conflict with or constitute or result in a breach of,
or default under, the Company's certificate of incorporation
or by-laws, each as in effect at the applicable Closing Time,
of the Company.
(vii) The Registration Statement, including any Rule
462(b) Registration Statement, and the Prospectus (except for
financial statements and engineering reports and other
financial or engineering data, as to which such counsel need
not express any opinion), as of their respective effective or
issue dates, appeared on
15
<PAGE> 16
their face to be appropriately responsive to the requirements
of the 1933 Act and the 1933 Act Regulations.
In rendering such opinion, counsel for the Company may rely as
to matters of fact upon the representations of officers of the
Company contained in any certificate delivered to such counsel
and certificates of public officials, which certificates shall
be attached to or delivered with such opinion. Such opinion
shall be limited to the General Corporation Law of the State
of Delaware, the laws of the State of Texas and the laws of
the United States of America.
(2) The favorable opinion of Zurab S. Kobiashvili,
General Counsel of the Company, to the effect that:
(i) The Company has the corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under this Agreement and the Terms
Agreement.
(ii) To the best knowledge and information of such
counsel, the Company is duly qualified as a foreign
corporation to transact business and is in good standing in
the State of Texas and in each other jurisdiction in which
such qualification is required, except where the failure to so
qualify and be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or
the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(iii) Each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and conduct its business as
described in the Prospectus, and, to the best of such
counsel's knowledge and information, is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify and be in
good standing would not have a material adverse effect on the
condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and
all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable, and is owned by the
Company, directly or indirectly, free and clear of any
mortgage, pledge, lien, encumbrance, claim or equity (except
as described in the Prospectus).
(iv) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus (except
for issuances, if any, described in the Prospectus, pursuant
to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options
referred to in the Prospectus); the shares of issued
16
<PAGE> 17
and outstanding capital stock set forth therein have been duly
authorized and validly issued and are fully paid and
non-assessable; and the Offered Securities conform to all
statements relating thereto contained in the Prospectus and
such statements conform to the provisions of the instruments
defining the same.
(v) The Offered Securities have been duly and validly
authorized for issuance, offer and sale pursuant to this
Agreement and the applicable Terms Agreement and, when issued
and delivered pursuant to the provisions of this Agreement and
the applicable Terms Agreement against payment of the
consideration therefor, will be validly issued, fully paid and
non-assessable; the Rights have been duly and validly
authorized for issuance by the Company in accordance with the
Rights Agreement, dated as of January 31, 1996, between the
Company and Norwest Bank Minnesota, N.A.; and the issuance of
the Offered Securities will not be subject to any preemptive
or similar rights.
(vi) 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.
(vii) Neither the Company nor any of its subsidiaries
is required to be registered under the 1940 Act.
(viii) No consent, approval, authorization, order,
decree, registration or qualification of or with any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of
the transactions contemplated by this Agreement, except such
as have been obtained or rendered, as the case may be, or as
may be required under the 1933 Act, the 1933 Act Regulations,
the 1934 Act, the 1934 Act Regulations or state securities
laws; and the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein and
therein have been duly authorized by all necessary corporate
action of the Company and, to the best knowledge and
information of such counsel, will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it
or any of them may be bound or to which any of the property or
assets of the Company or any such subsidiary is subject, nor
will such action result in any violation of the provisions of
the charter or by-laws of the Company or any applicable law,
administrative regulation or, to the best knowledge and
information of such counsel, administrative or court order or
decree.
(ix) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws.
17
<PAGE> 18
(x) 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.
(xi) To the best of such counsel's knowledge and
information, there is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or
foreign, now pending, or threatened against or affecting, the
Company or any of its subsidiaries, which would be reasonably
expected to result in any material adverse change in the
condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, or
would materially and adversely affect the properties or assets
thereof or would materially and adversely affect the
consummation of this Agreement and the Terms Agreement or any
transaction contemplated hereby or thereby.
(xii) 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 (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, (ii) as
to matters of law governed by laws other than 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,
such opinions of counsel admitted to practice in the
applicable
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<PAGE> 19
jurisdictions as Mr. Kobiashvili deems appropriate, and (iii)
as to matters related to the capital stock of the Company and
each of the Company's Significant Subsidiaries issued prior to
March 30, 1993, the opinion of George J. Morgenthaler, former
Senior Vice President and General Counsel of the Company,
dated March 30, 1993, which certificates and opinions shall be
attached to or delivered with such opinion. Such opinion shall
be limited to the General Corporation Law of the State of
Delaware, the laws of the State of Texas and the laws of the
United States of America.
(3) The favorable opinion, dated as of the Closing
Time, of Brown & Wood LLP, counsel for the Underwriters, with respect
to the matters set forth in clauses (i) to (v), inclusive, and (viii)
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, Mayor, Day,
Caldwell & Keeton, L.L.P., 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, to the extent deemed appropriate, upon
the judgment of officers and representatives of the Company. Such
counsel shall additionally state that, however, as a result of such
consideration and participation, nothing has come to such counsel's
attention which causes such counsel to believe that the Registration
Statement, at the time it became effective (or, if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed
by the Company with the Commission subsequent to the effectiveness of
the Registration Statement, then at the time such amendment became
effective or at the time of the most recent such filing, as the case
may be), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, at the time the
Prospectus was issued, at the time any such amendment or supplement was
issued, or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to
the financial statements and engineering reports and other financial or
engineering data contained in the Registration Statement (including the
Prospectus)).
(c) At the Closing Time, there shall not have been, since the
date of the Terms Agreement or since the respective dates as
of which information is given in the
19
<PAGE> 20
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 thereof and in form and substance satisfactory
to the Underwriters, to the effect that:
(i) They are independent accountants with respect to
the Company and its subsidiaries within the meaning of the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations.
(ii) It is their opinion that the consolidated
financial statements and supporting schedule(s) included or
incorporated by reference in the Registration Statement and
the Prospectus and audited by them and covered by their
opinions therein comply in form in all material respects with
the applicable accounting requirements of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations.
(iii) They have performed specified procedures, not
constituting an audit, including a reading of the latest
available interim financial statements of the Company and its
indicated subsidiaries, a reading of the minute books of the
Company and such subsidiaries since the end of the most recent
fiscal year with respect to which an audit report has been
issued, inquiries of and discussions with certain officials of
the Company and such subsidiaries responsible for financial
and accounting matters with respect to the unaudited
consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus and
the latest available interim unaudited financial statements of
the Company and its subsidiaries, and such other inquiries and
procedures as may be specified in such letter, and on the
basis of such inquiries and procedures, nothing came to their
attention that caused them to believe that: (A) any material
modifications should be made to the unaudited consolidated
financial statements
20
<PAGE> 21
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 Registration Statement or the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements.
(v) In addition to the audit referred to in their
opinions and the limited procedures referred to in clauses
(iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are
included or incorporated by reference in the Registration
Statement and the Prospectus and which are specified by the
Underwriters, and have found such amounts, percentages and
financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its
subsidiaries identified in such letter.
(2) At the Closing Time, the Underwriters shall have
received from Arthur Andersen LLP, a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (d)(1) of
this Section, except that the specified date referred to shall
be a date not more than three days prior to the Closing Time.
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<PAGE> 22
(e) At the date of this Agreement, the Representatives shall
have received an agreement substantially in the form of
Exhibit B hereto signed by the persons, if any, listed on
Schedule A to the Terms Agreement.
(f) The Offered Securities at the Closing Time shall have been
duly listed, subject to notice of issuance, on the New York
Stock Exchange.
(g) 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.
(h) 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 opinions of Mayor, Day, Caldwell &
Keeton, L.L.P., counsel for the Company, and Zurab S.
Kobiashvili, General Counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and
otherwise substantially to the same effect as the opinions
required by subsections (1) and (2) of Section 4(b) hereof.
(3) The favorable opinion of Brown & Wood LLP,
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same
effect as the opinion required by subsection (3) to Section
4(b) hereof.
(4) Unless the Date of Delivery is the Closing Time,
a letter from Arthur Andersen LLP, in form and substance
satisfactory to the Underwriters and dated such Date of
Delivery, substantially the same in scope and substance as the
letter furnished to the Underwriters at the Closing Time
pursuant to Section 4(d)
22
<PAGE> 23
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, reproduction and delivery to the
Underwriters of this Agreement; any Agreement among
Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or
delivery of the Offered Securities;
(c) the preparation, printing, issuance and delivery of the
Offered Securities, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Offered Securities;
(d) the fees and disbursements of the Company's accountants,
counsel and other advisors;
(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 each preliminary
Prospectus Supplement, the Prospectus and any amendments or
supplements thereto, and the delivery by the Underwriters of
the Prospectus and any amendments or supplements thereto in
connection with solicitations or confirmations of sales of the
Offered Securities;
(h) all fees and disbursements of any transfer and paying
agent;
(i) any fees charged by nationally recognized statistical
rating organizations for the rating of the Offered Securities;
23
<PAGE> 24
(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 4, 9 or 10, 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, damage, joint or several, 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 Supplement 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 Supplement or the
Prospectus (or any amendment or supplement thereto);
(ii) against any and all loss, liability, damage, joint or several, 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
24
<PAGE> 25
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 Supplement 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 Supplement 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 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,
25
<PAGE> 26
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 Supplement 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 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
26
<PAGE> 27
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 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) a downgrading shall
have occurred in the rating accorded to any debt securities or preferred stock
of the Company by any "nationally recognized statistical rating organization,"
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the 1933 Act or such organization shall have publicly announced that it has
under survellience or review, with possible negative implications, its rating of
any debt securities or preferred stock 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,
27
<PAGE> 28
included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading. As used in
this Section 9, the term "Prospectus" means the Prospectus in the form first
provided to the applicable Underwriter or Underwriters for use in confirming
sales of the related Offered Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 5. Notwithstanding any such termination, (i)
the covenants set forth in Section 3(b), (d), and (e) with respect to any
offering of Offered Securities shall remain in effect so long as any Underwriter
owns any such Offered Securities purchased from the Company pursuant to this
Agreement and during the period when the Prospectus is required to be delivered
in connection with sales of the Offered Securities and (ii) the covenants set
forth in Section 3(c), (g), (h) and, if applicable, (i), the provisions of
Section 5, the indemnity agreement set forth in Section 6, the contribution
provisions set forth in Section 7 and the provisions of Sections 8, 11, 12 and
13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters shall fail at
the Closing Time or a Date of Delivery to purchase the Firm Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), then the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, during such 24 hours the Representatives
shall not have completed such arrangements for the purchase of all of the
Defaulted Securities, then:
(a) if the amount of Defaulted Securities does not exceed 10%
of the amount of Firm Securities to be purchased on such date,
each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the amount of Defaulted Securities exceeds 10% of the
number of Firm Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which
occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall
28
<PAGE> 29
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: John B.
Clutterbuck, Mayor, Day, Caldwell & Keeton, L.L.P., 700 Louisiana, Suite 1900,
Houston, Texas 77002-2778. 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.
29
<PAGE> 30
EXHIBIT A
TERMS AGREEMENT
Common Stock
___________ __, 19__
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention: [Title]
Dear Sirs:
The undersigned underwriters (the "Underwriters") understand that
Apache Corporation (the "Company") proposes to issue and sell [number of] shares
of its common stock, $1.25 par value per share and related rights to purchase
common stock (the "Offered Securities"). Subject to the terms and conditions set
forth herein or incorporated by reference herein, the Underwriters offer to
purchase, severally and not jointly, the number of Offered Securities set forth
below opposite their respective names at $___ per share together with accrued
dividend thereon from __________, 19__ to the Closing Time:
<TABLE>
<CAPTION>
Number of
Underwriter Firm Securities
----------- ---------------
<S> <C>
--------------
Total
==============
</TABLE>
The Offered Securities shall have the following terms:
Number of Firm Securities to be issued:
Maximum number of Option Securities to be issued:
Initial price to public:
Underwriting commission:
Purchase price
Closing Time:
Place of delivery and payment:
Company account for wire transfer of payment:
A-1
<PAGE> 31
Lock-up pursuant to Section 3(j) of the
Underwriting Agreement Basic Terms: [yes] [no]
Lock-up pursuant to Section 4(e) of the
Underwriting Agreement Basic Terms: [yes] [no]
Note: If yes, see Schedule A hereto.
Securities exchanges, if any, on which application will be made to list the
Offered Securities:
Other terms, if any:
All the provisions contained in "Apache Corporation-Common
Stock--Underwriting Agreement Basic Terms" (the "Basic Terms"), filed as an
exhibit to the Registration Statement relating to the Offered Securities and
attached hereto as Annex A, are herein incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
Any notice by the Company to the Underwriters pursuant to this Terms
Agreement shall be sufficient if given in accordance with Section 11 of the
Basic Terms addressed to: [insert name and address of the lead manager or
managers or, if only one underwriter is a party hereto, of such firm] which
shall, for all purposes of this Agreement, be the "Representatives".
Very truly yours,
REPRESENTATIVE[S]
[Acting for themselves and as
Representative[s] of the Underwriters]
Accepted:
APACHE CORPORATION
By:
--------------------------------
Title:
A-2
<PAGE> 32
SCHEDULE A
List of Persons and Entities Subject to Lock-Up
A-3
<PAGE> 33
EXHIBIT B
[Form of Lock-Up from Directors, Officers or Other
Stockholders Pursuant to Section 4(e)]
, 1999
[NAME OF LEAD UNDERWRITER]
[NAME(S) OF ANY CO-REPRESENTATIVE(S)]
as Representative(s) of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
Re: Proposed Public Offering by Apache Corporation
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director]1 of
Apache Corporation, a Delaware corporation (the "Company"), understands that
[name of lead underwriter][and [name(s) of co-representative(s), if any]]
propose(s) to enter into an Underwriting Agreement (the "Underwriting
Agreement") with the Company providing for the public offering of shares (the
"Securities") of the Company's common stock, par value $1.25 per share (the
"Common Stock") and related rights to purchase Common Stock. In recognition of
the benefit that such an offering will confer upon the undersigned as a
stockholder [and an officer and/or director]1 of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Underwriting Agreement that, during a period of 90 days from the date of the
Underwriting Agreement, the undersigned will not, without the prior written
consent of [name of lead underwriter], directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock or any such substantially similar securities, whether now owned
or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
-------------------------
Print Name:
------------------------
- --------------------
(1) Delete or revise background language as appropriate.
B-1
<PAGE> 34
ANNEX A
[Apache Corporation--Common Stock--
Underwriting Agreement Basic Terms]
A-1
<PAGE> 1
EXHIBIT 99.6
APACHE CORPORATION
CONVERTIBLE PREFERRED STOCK
UNDERWRITING AGREEMENT BASIC TERMS
<PAGE> 2
APACHE CORPORATION
Convertible Preferred Stock
UNDERWRITING AGREEMENT BASIC TERMS
Apache Corporation, a Delaware corporation (the "Company"), may issue
and sell from time to time its shares of preferred stock, no par value,
convertible into common stock, $1.25 par value per share (the "Common Stock")
and related rights to purchase its Common Stock (the "Rights") (the "Convertible
Preferred Stock"). Each issue of Convertible Preferred Stock may vary as to
number of shares, liquidation values, dividend rate or rates and timing of
payments thereof, redemption provisions, if any, convertible provisions and any
other variable terms as set forth in the Terms Agreement (as defined below)
relating thereto. The Convertible Preferred Stock may be represented by
depositary shares (the "Depositary Shares") pursuant to a deposit agreement (the
"Deposit Agreement") among the Company, Norwest Bank Minnesota, N.A. (the
"Depositary"), and all holders from time to time of receipts issued thereunder.
Whenever the Company determines to make an offering of the Convertible
Preferred Stock, the Depositary Shares, if any, and the Common Stock and the
related Rights into which the Convertible Preferred Stock is convertible, the
Company will enter into an agreement (the "Terms Agreement") providing for the
sale of such securities (the "Offered Securities") to, and the purchase and
offering thereof by, one or more underwriters specified in the Terms Agreement
(the "Underwriters", which term shall include any Underwriters substituted
pursuant to Section 10 hereof). The Terms Agreement relating to the Offered
Securities shall specify the names of the Underwriters participating in such
offering, the amount of Offered Securities which each such Underwriter severally
agrees to purchase, the price at which the Offered Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, the time and place of delivery and payment, such other information as is
indicated in Exhibit A hereto and such other terms as are agreed by the Company
and the Underwriters. In addition, each Terms Agreement shall specify whether
the Company has agreed to grant to the Underwriters an option to purchase
additional Offered Securities to cover over-allotments, if any, and the number
of Offered Securities subject to such option described in Section 2(b) hereof
(the "Option Securities"). As used herein, the term "Offered Securities" shall
include the Option Securities, if any, and the number of firm shares of
Convertible Preferred Stock or Depositary Shares, as the case may be, specified
in the Terms Agreement (the "Firm Securities"); and "Representatives" shall mean
the Underwriter or Underwriters so specified in the Terms Agreement or, if no
Underwriter is so specified, shall mean each Underwriter. The Terms Agreement
may be in the form of an exchange of any standard form of written
telecommunication between the Underwriters and the Company. The offering of the
Offered Securities will be governed by the Terms Agreement, as supplemented
hereby (collectively, this "Agreement"), and this Agreement shall inure to the
benefit of and be binding upon each Underwriter participating in the offering of
the Offered Securities.
2
<PAGE> 3
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-75633) for the registration of the Offered Securities, under the Securities
Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"), and has prepared and filed such
amendments thereto as may have been required to the date hereof. Such
registration statement, as amended, has been declared effective by the
Commission. As provided in Section 3(a), a prospectus supplement reflecting the
terms of the Offered Securities, the terms of the offering thereof and the other
matters set forth therein has been prepared and will be filed pursuant to Rule
424 under the 1933 Act. Such prospectus supplement, in the form first filed
after the date of the Terms Agreement pursuant to Rule 424, is herein referred
to as the "Prospectus Supplement". Such registration statement, as amended at
the date of the Terms Agreement, including the exhibits thereto and the
documents incorporated by reference therein, is herein called the "Registration
Statement". Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The basic prospectus included in
the Registration Statement, 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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(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) The Company meets the requirements for use of Form S-3
under the 1933 Act. Each of the Registration Statement and any
Rule 462(b) Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the
Commission for additional information has been complied with.
(d) There are no contracts, agreements or understandings
between the Company or any of its subsidiaries, on the one
hand, and any person, on the other hand, granting such person
the right to require the Company or any of its subsidiaries to
file a registration statement under the 1933 Act with respect
to any securities (other than contractual obligations by the
Company to file registration statements on Form S-8 covering
issuances of Common Stock pursuant to its employee or director
stock, bonus or compensation plans) or to require the Company
or any of its subsidiaries to include such securities in any
registration statement filed by the Company under the 1933 Act
or in any public offering of securities.
(e) 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
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<PAGE> 5
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.
(f) 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 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.
(g) 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.
(h) 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 Prospectus present fairly the information
shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
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<PAGE> 6
(i) 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.
(j) This Agreement has been duly authorized, executed and
delivered by the Company and, upon execution and delivery by
the Underwriters, will be a valid and legally binding
agreement of the Company.
(k) If the Offered Securities include Depositary Shares, the
Deposit Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization,
execution and delivery by the Depositary, constitutes a valid
and legally binding obligation of the Company enforceable in
accordance with its terms except as enforceability thereof may
be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors'
rights generally and by general equity principles.
(l) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus (except for
issuances, if any, described in the Prospectus, pursuant to
this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options
referred to in the Prospectus); the shares of issued and
outstanding capital stock set forth therein have been duly
authorized and validly issued and are fully paid and
non-assessable; and the Offered Securities conform to all
statements relating thereto contained in the Prospectus and
such statements conform to the provisions of the instruments
defining the same.
(m) The Convertible Preferred Stock has been duly and validly
authorized for issuance, offer and sale pursuant to this
Agreement, the Deposit Agreement, if any, and the applicable
Terms Agreement; the Convertible Preferred Stock when issued
and delivered against payment therefor as provided for in this
Agreement, the Deposit Agreement, if any, and the applicable
Terms Agreement, will be validly issued, fully paid and
non-assessable; the Depositary Shares, if any, when issued and
delivered against payment therefor as provided for in this
Agreement, the Deposit Agreement, if any, and the applicable
Terms Agreement, will be validly issued by the Depositary; and
the holders of the Depositary Shares, if any, will be entitled
to the rights specified in the Depositary Receipts and in the
Deposit Agreement (subject, in the case of the Deposit
Agreement, as to enforcement, bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles); the Convertible Preferred Stock comprising
the Offered Securities is convertible into shares of Common
Stock in accordance with the terms of the Convertible
Preferred Stock; the shares of Common Stock initially issuable
upon conversion of the Convertible Preferred Stock comprising
the Offered Securities have been duly and validly reserved for
issuance, and when issued and delivered pursuant to the terms
of the Convertible Preferred Stock, will be validly issued,
fully paid and non-assessable; the Rights have been duly and
validly authorized
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<PAGE> 7
for issuance by the Company in accordance with the Rights
Agreement, dated as of January 31, 1996, between the Company
and Norwest Bank Minnesota, N.A.; and the issuance of the
Offered Securities will not be subject to any preemptive or
similar rights.
(n) 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, and (3) except for regular dividends on
the Common Stock and the Company's preferred stock, there has
been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(o) Neither the Company nor any of its subsidiaries is in
violation of its charter or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a
party or by which it or any of them or their properties may be
bound, where the consequences of such violation or default
would have a material adverse effect on the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the execution
and delivery of this Agreement and the Terms Agreement and the
consummation of the transactions contemplated herein and
therein have been duly authorized by all necessary corporate
action of the Company and will not conflict with or constitute
a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it
or any of them may be bound or to which any of the property or
assets of the Company or any subsidiary thereof is subject,
nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any law,
administrative regulation or administrative or court order or
decree, where the consequences of such conflict, breach,
creation, imposition, violation or default would have a
material adverse effect on the condition, financial or
otherwise, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(p) No consent, approval, authorization, order, decree,
registration or qualification of or with 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
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<PAGE> 8
such as have been obtained or rendered, as the case may be, or
as may be required under state securities or Blue Sky laws.
(q) Except as may be included or incorporated by reference in
the Registration Statement and the Prospectus, there is no
action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending
or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which might,
in the opinion of the Company, result in any material adverse
change in the condition, financial or otherwise, or in the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise, or could reasonably be expected to materially and
adversely affect the properties or assets thereof or could
reasonably be expected to materially and adversely affect the
consummation of this Agreement or the Terms Agreement or any
transaction contemplated hereby or thereby.
(r) 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.
(s) 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, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(t) 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
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<PAGE> 9
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.
(u) 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.
(v) 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.
(w) 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").
(x) 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.
(y) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or
any of its subsidiaries has a material relationship to
evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the
Year 2000 Problem. As a result of such review, the Company has
no reason to believe, and does not
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<PAGE> 10
believe, that the Year 2000 Problem will 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 or result in any material loss or interference
with the Company's business or operations. The "Year 2000
Problem" as used herein means any significant risk that
computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the
operation of mechanical or electrical systems of any kind will
not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1,
2000.
(z) 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.
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(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the Terms Agreement, an option to the
Underwriters named in the Terms Agreement, severally and not jointly, to
purchase up to the number of Option Securities set forth therein at the same
price per share as is applicable to the Offered Securities plus accrued
dividends, if any. Such option, if granted, will expire 30 days after the date
of the Terms Agreement, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Offered Securities upon
notice by the Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days and not
earlier than two full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined, unless otherwise
agreed upon by the Representatives and the Company. If the option is exercised
as to all or any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase the proportion of the total
number of Option Securities then being purchased that the number of Firm
Securities each such Underwriter has agreed to purchase, as set forth in the
Terms Agreement, bears to the total number of Firm Securities, subject to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of, the Firm
Securities to be purchased by the Underwriters shall be made at the place set
forth in the Terms Agreement, or at such other place as shall be agreed upon by
the Representatives and the Company, on the third business day (unless postponed
in accordance with the provisions of Section 10) following the date of the Terms
Agreement or such other time as shall be agreed upon by the Underwriters and the
Company (such time and date being referred to as the "Closing Time"). Except as
specified in the Terms Agreement, payment shall be made to the Company by wire
transfer in same day funds to the account of the Company specified in the Terms
Agreement against delivery to the Underwriters for the respective accounts of
the Underwriters of the Firm Securities to be purchased by them. In addition, in
the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
representing, such Option Securities shall be made at such place as shall be
agreed upon by the Representatives and the Company, on each Date of Delivery as
agreed by the Representatives and the Company. The Firm Securities and the
Option Securities, if any, shall be in such denominations and registered in such
names as the Underwriters may request in writing at least two business days
prior to the Closing Time or relevant Date of Delivery, as the case may be. The
Firm Securities and the Option Securities, if any, will be made available for
examination and packaging by the Representatives on or before the first business
day prior to the Closing Time or relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of the Terms
Agreement, the Company will prepare a Prospectus Supplement in
form approved by the Representatives setting forth the number,
class and designation of the Firm Securities, the names
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<PAGE> 12
of the Underwriters and the number of the Offered Securities
which each severally and not jointly has agreed to purchase,
the price per share 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 Option Securities, and such other information as
the Representatives and the Company deem appropriate in
connection with the offering of the Offered Securities. The
Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424
of the 1933 Act Regulations and will furnish to the
Underwriters named therein as many copies of the Prospectus
(including the Prospectus Supplement) as the Representatives
shall reasonably request.
(b) The Company will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so
as to permit the completion of the distribution of the Offered
Securities as contemplated in this Agreement and in the
Prospectus. If, at any time when a 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 the 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 Convertible
Preferred Stock, Common Stock and Depositary Shares, if any,
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
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<PAGE> 13
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 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) Prior to 10:00 A.M, New York City time, on the business
day next succeeding the date of this Agreement and from time
to time, 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 has delivered to each Underwriter, without
charge, as many copies of each preliminary Prospectus
Supplement as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act.
(h) 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
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<PAGE> 14
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.
(i) 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.
(j) If specified in the Terms Agreement, during the 90-day
period following the date of the Terms Agreement, the Company
will not, without the prior written consent of the
Representatives, (i) directly or indirectly, issue, offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or
dispose of any share of Convertible Preferred Stock, Common
Stock or any Depositary Share or any securities convertible
into or exercisable or exchangeable for Convertible Preferred
Stock, Common Stock or Depositary Shares or any such
substantially similar securities or file any registration
statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership
of Convertible Preferred Stock, Common Stock or Depositary
Shares, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of
Convertible Preferred Stock, Common Stock or Depositary Shares
or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Offered Securities, (B)
any shares of Convertible Preferred Stock or Common Stock or
Depositary Shares issued by the Company upon the exercise of
an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the
Prospectus, (C) any shares of Convertible Preferred Stock or
Common Stock or Depositary Shares issued or options to
purchase Common Stock granted pursuant to existing employee
benefit plans of the Company referred to in the Prospectus,
(D) any shares of Convertible Preferred Stock or Common Stock
or Depositary Shares issued pursuant to any non-employee
director stock plan or dividend reinvestment plan, (E) any
shares of Convertible Preferred Stock or Common Stock or
Depositary Shares issued pursuant to the Company's existing
dividend reinvestment program, (F) the Common Stock, if any,
that is the subject of a concurrent public offering, or (G)
any shares of
14
<PAGE> 15
Common Stock issuable in connection with any asset purchase or
other transaction described in the Prospectus.
(k) The Company will reserve and keep available at all times,
free of preemptive rights, shares of Common Stock for the
purpose of enabling the Company to satisfy any obligations to
issue shares of its Common Stock upon conversion of the
Convertible Preferred Stock.
(l) The Company will use its best efforts to list, subject to
notice of issuance, the Offered Securities, including the
Common Stock issuable upon conversion of the Convertible
Preferred Stock on the New York Stock Exchange.
(m) The Company will use the net proceeds received by it from
the sale of the Offered Securities in the manner specified in
the Prospectus under "Use of Proceeds". (n) If the Company
elects to rely upon Rule 462(b), the Company shall file a Rule
462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and the Company shall at the time
of filing either pay the Commission a filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the
1933 Act.
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) The Registration Statement and any Rule 462(b)
Registration Statement have become effective and, 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
and any request on the part of the Commission for additional
information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have
been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to
rely upon Rule 434, a term sheet shall have been filed with
the Commission in accordance with Rule 424(b).
(b) At the Closing Time, the Representatives shall have
received:
15
<PAGE> 16
(1) The favorable opinion, dated as of the Closing
Time, of Mayor, Day, Caldwell & Keeton, L.L.P., counsel to the
Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) This Agreement and the Terms Agreement have been
duly authorized, executed and delivered by the Company.
(iii) The Convertible Preferred Stock has been duly
and validly authorized for issuance, offer and sale pursuant
to this Agreement, the Deposit Agreement, if any, and the
applicable Terms Agreement; the Convertible Preferred Stock,
when issued and delivered against payment therefor as provided
for in this Agreement, the Deposit Agreement, if any, and the
applicable Terms Agreement, will be validly issued, fully paid
and non-assessable; the Depositary Shares, if any, when issued
and delivered against payment therefor as provided for in this
Agreement, the Deposit Agreement, if any, and the applicable
Terms Agreement, will be validly issued by the Depositary; and
the holders of the Depositary Shares, if any, will be entitled
to the rights specified in the Depositary Receipts and in the
Deposit Agreement (subject, in the case of the Deposit
Agreement, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles); the Convertible Preferred Stock comprising
the Offered Securities is convertible into shares of Common
Stock in accordance with the terms of the Convertible
Preferred Stock; the shares of Common Stock initially issuable
upon conversion of the Convertible Preferred Stock comprising
the Offered Securities have been duly and validly reserved for
issuance, and when issued and delivered pursuant to the terms
of the Convertible Preferred Stock, will be validly issued,
fully paid and non-assessable; the Rights have been duly and
validly authorized for issuance by the Company in accordance
with the Rights Agreement, dated as of January 31, 1996,
between the Company and Norwest Bank Minnesota, N.A.; and the
issuance of the Offered Securities will not be subject to any
preemptive or similar rights.
(iv) The Offered Securities conform in all material
respects to the statements relating thereto in the Prospectus;
and the statements in the Prospectus under the caption
"Description of Capital Stock" and in the Prospectus
Supplement under the headings "Description of Convertible
Preferred Stock", "Description of Depositary Shares" and
similar headings, insofar as they purport to summarize certain
provisions of instruments specifically referred to therein,
are fair and correct summaries of such provisions.
(v) The Registration Statement, including any Rule
462(b) Registration Statement, has been declared effective by
the Commission under the 1933 Act and, to the best of such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration
16
<PAGE> 17
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(vi) The execution and delivery of this Agreement and
the Terms Agreement, the issuance of Offered Securities
covered by the Terms Agreement, the incurrence of the
obligations set forth herein and therein, and the consummation
of the transactions herein and therein contemplated do not and
will not conflict with or constitute or result in a breach of,
or default under, the Company's certificate of incorporation
or by-laws, each as in effect at the applicable Closing Time,
of the Company.
(vii) If the Offered Securities include Depositary
Shares, the Deposit Agreement has been duly authorized,
executed and delivered by the Company and assuming due
authorization, execution and delivery by the Depositary,
constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms except as
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general
equity principles.
(viii) The Registration Statement, including any Rule
462(b) Registration Statement, and the Prospectus (except for
financial statements and engineering reports and other
financial or engineering data, as to which such counsel need
not express any opinion), as of their respective effective or
issue dates, appeared on their face to be appropriately
responsive to the requirements of the 1933 Act and the 1933
Act Regulations.
(ix) The information contained in the Prospectus
Supplement under the caption "Certain Federal Income Tax
Considerations", to the extent that such information
constitutes matters of law, summaries of legal matters or
legal conclusions, has been reviewed by such counsel and is
correct.
In rendering such opinion, counsel for the Company may (i)
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 and (ii) as to the laws of the State of New York
applicable to the enforceability of the Deposit Agreement,
upon the opinion of Brown & Wood LLP. Such opinion shall be
limited to the General Corporation Law of the State of
Delaware, the laws of the State of Texas and the laws of the
United States of America.
(2) The favorable opinion of Zurab S. Kobiashvili,
General Counsel of the Company, to the effect that:
(i) The Company has the corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under this Agreement and the Terms
Agreement.
17
<PAGE> 18
(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) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus (except
for issuances, if any, described in the Prospectus, pursuant
to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options
referred to in the Prospectus); the shares of issued and
outstanding capital stock set forth therein have been duly
authorized and validly issued and are fully paid and
non-assessable; and the Offered Securities conform to all
statements relating thereto contained in the Prospectus and
such statements conform to the provisions of the instruments
defining the same.
(v) The Convertible Preferred Stock has been duly and
validly authorized for issuance, offer and sale pursuant to
this Agreement, the Deposit Agreement, if any, and the
applicable Terms Agreement; the Convertible Preferred Stock,
when issued and delivered against payment therefor as provided
for in this Agreement, the Deposit Agreement, if any, and the
applicable Terms Agreement, will be validly issued, fully paid
and non-assessable; the Depositary Shares, if any, when issued
and delivered against payment therefor as provided for in this
Agreement, the Deposit Agreement, if any, and the applicable
Terms Agreement, will be validly issued by the Depositary; and
the holders of the Depositary Shares, if any, will be entitled
to the rights specified in the Depositary Receipts and in the
Deposit Agreement (subject, in the case of the Deposit
Agreement, as to enforcement, bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to
18
<PAGE> 19
general equity principles); the Convertible Preferred Stock
comprising the Offered Securities is convertible into shares
of Common Stock in accordance with the terms of the
Convertible Preferred Stock; the shares of Common Stock
initially issuable upon conversion of the Convertible
Preferred Stock comprising the Offered Securities have been
duly and validly reserved for issuance, and when issued and
delivered pursuant to the terms of the Convertible Preferred
Stock, will be validly issued, fully paid and non-assessable;
the Rights have been duly and validly authorized for issuance
by the Company in accordance with the Rights Agreement, dated
as of January 31, 1996, between the Company and Norwest Bank
Minnesota, N.A.; and the issuance of the Offered Securities
will not be subject to any preemptive or similar rights.
(vi) If the Offered Securities include Depositary
Shares, the Deposit Agreement has been duly authorized,
executed and delivered by the Company and assuming due
authorization, execution and delivery by the Depositary,
constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms except as
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general
equity principles.
(vii) Each document filed pursuant to the 1934 Act
and incorporated by reference in the Prospectus (except for
financial statements, supporting schedules and other financial
or statistical information as to which no opinion need be
rendered) appeared on its face to be appropriately responsive
when so filed to the requirements of the 1934 Act and the 1934
Act Regulations.
(viii) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940 Act.
(ix) No consent, approval, authorization, order,
decree, registration or qualification of or with any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of
the transactions contemplated by this Agreement, except such
as have been obtained or rendered, as the case may be, or as
may be required under the 1933 Act, the 1933 Act Regulations,
the 1934 Act, the 1934 Act Regulations or state securities
laws; and the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein and
therein have been duly authorized by all necessary corporate
action of the Company and, to the best knowledge and
information of such counsel, will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it
or any of them may be bound or to which any of the property or
assets of the Company or any such subsidiary is subject, nor
will such action result in any violation of the provisions of
the charter or by-laws of the Company
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<PAGE> 20
or any applicable law, administrative regulation or, to the
best knowledge and information of such counsel, administrative
or court order or decree.
(x) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws.
(xi) To the best knowledge and information of such
counsel, neither the Company nor any of its subsidiaries is in
violation of any law, ordinance, governmental rule or
regulation or court decree to which it may be subject or has
failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its
property or to the conduct of its business, which violation or
failure would materially adversely affect the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and, to the best
knowledge and information of such counsel, the Company and its
subsidiaries own or possess or have obtained all governmental
licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own their respective
properties and to carry on their respective businesses as
presently conducted, except where the failure to obtain such
authorizations would not have a material adverse effect on the
condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xii) To the best of such counsel's knowledge and
information, there is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or
foreign, now pending, or threatened against or affecting, the
Company or any of its subsidiaries, which would be reasonably
expected to result in any material adverse change in the
condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, or
would materially and adversely affect the properties or assets
thereof or would materially and adversely affect the
consummation of this Agreement and the Terms Agreement or any
transaction contemplated hereby or thereby.
(xiii) To the best of such counsel's knowledge and
information, there are no contracts or other documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or
references thereto are correct in all material respects, and,
to the best of such counsel's knowledge and information, no
default exists in the due performance or observance of any
material obligation, agreement, covenant or conditions
contained in any contract, or other documents so described,
referred to, filed or incorporated by reference where the
consequences of such default would have a material adverse
effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise.
20
<PAGE> 21
In rendering such opinion, Zurab S. Kobiashvili 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, (ii) as
to matters of law governed by laws other than 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,
such opinions of counsel admitted to practice in the
applicable jurisdictions as Mr. Kobiashvili deems appropriate,
and (iii) as to matters related to the capital stock of the
Company and each of the Company's Significant Subsidiaries
issued prior to March 30, 1993, the opinion of George J.
Morgenthaler, former Senior Vice President and General Counsel
of the Company, dated March 30, 1993, which certificates and
opinions shall be attached to or delivered with such opinion.
Such opinion shall be limited to the General Corporation Law
of the State of Delaware, the laws of the State of Texas and
the laws of the United States of America.
(3) The favorable opinion, dated as of the Closing
Time, of Brown & Wood LLP, counsel for the Underwriters, with respect
to the matters set forth in clauses (i) to (v), inclusive, and (viii)
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, Mayor, Day,
Caldwell & Keeton, L.L.P., 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, to the extent deemed appropriate, upon
the judgment of officers and representatives of the Company. Such
counsel shall additionally state that, however, as a result of such
consideration and participation, nothing has come to such counsel's
attention which causes such counsel to believe that the Registration
Statement, at the time it became effective (or, if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed
by the Company with the Commission subsequent to the effectiveness of
the Registration Statement, then at the time such amendment became
effective or at the time of the most recent such filing, as the case
may be), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, at the time the
Prospectus was issued, at the time any such amendment or supplement was
issued, or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to
21
<PAGE> 22
the financial statements and engineering reports and other financial or
engineering data contained in the Registration Statement (including the
Prospectus)).
(c) At the Closing Time, there shall not have been, since the
date of the Terms Agreement or since the respective dates as
of which information is given in the Registration Statement
and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the
Chief Executive Officer, President or a Vice President and the
Treasurer, the Assistant Treasurer, the principal financial
officer or principal accounting officer of the Company, dated
as of the Closing Time, to the effect that (i) there has been
no such material adverse change with respect to the Company
and its subsidiaries, (ii) the representations and warranties
of the Company contained in Section 1 are true and correct as
of the Closing Time, (iii) the Company has performed or
complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the date
of such certificate and (iv) no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued and no proceedings for
that purpose have been initiated or threatened by the
Commission. As used in this Section 4(c), the term
"Prospectus" means the Prospectus in the form first provided
to the applicable Underwriter or Underwriters for use in
confirming sales of the Offered Securities.
(d)(1) On the date of the Terms Agreement, the Underwriters
shall have received a letter from Arthur Andersen LLP, dated
as of the date thereof and in form and substance satisfactory
to the Underwriters, to the effect that:
(i) They are independent accountants with respect to
the Company and its subsidiaries within the meaning of the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations.
(ii) It is their opinion that the consolidated
financial statements and supporting schedule(s) included or
incorporated by reference in the Registration Statement and
the Prospectus and audited by them and covered by their
opinions therein comply in form in all material respects with
the applicable accounting requirements of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations.
(iii) They have performed specified procedures, not
constituting an audit, including a reading of the latest
available interim financial statements of the Company and its
indicated subsidiaries, a reading of the minute books of the
Company and such subsidiaries since the end of the most recent
fiscal year with respect to which an audit report has been
issued, inquiries of and discussions with certain officials of
the Company and such subsidiaries responsible for financial
and accounting matters with respect to the unaudited
consolidated financial
22
<PAGE> 23
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 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.
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<PAGE> 24
(2) At the Closing Time, the Underwriters shall have
received from Arthur Andersen LLP, a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (d)(1) of
this Section, except that the specified date referred to shall
be a date not more than three days prior to the Closing Time.
(e) At the date of this Agreement, the Representatives shall
have received an agreement substantially in the form of
Exhibit B hereto signed by the persons, if any, listed on
Schedule A to the Terms Agreement.
(f) The Convertible Preferred Stock or, if applicable, the
Depositary Shares comprising the Offered Securities at the
Closing Time shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange.
(g) 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.
(h) 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 opinions of Mayor, Day, Caldwell &
Keeton, L.L.P., counsel for the Company, and Zurab S.
Kobiashvili, General Counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and
otherwise substantially to the same effect as the opinions
required by subsections (1) and (2) of Section 4(b) hereof.
(3) The favorable opinion of Brown & Wood LLP,
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and
24
<PAGE> 25
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, reproduction and delivery to the
Underwriters of this Agreement; any Agreement among
Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or
delivery of the Offered Securities;
(c) the preparation, printing, issuance and delivery of the
Offered Securities, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Offered Securities;
(d) the fees and disbursements of the Company's accountants,
counsel and other advisors;
(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 each preliminary
Prospectus Supplement, the Prospectus and
25
<PAGE> 26
any amendments or supplements thereto, and the delivery by the
Underwriters of the Prospectus and any amendments or
supplements thereto in connection with solicitations or
confirmations of sales of the Offered Securities;
(h) all fees and disbursements of any transfer and paying
agent;
(i) any fees charged by nationally recognized statistical
rating organizations for the rating of the Offered Securities;
(j) the fees and expenses incurred in connection with any
listing of Offered Securities on a securities exchange;
(k) the fees and expenses incurred with respect to any filing
with the National Association of Securities Dealers, Inc.;
(l) any out-of-pocket expenses of the Underwriters incurred
with the approval of the Company; and
(m) the cost of providing any CUSIP or other identification
numbers for the Offered Securities.
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 4, 9 or 10, 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, damage, joint or several, 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 Supplement 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 Supplement or the
Prospectus (or any amendment or supplement thereto);
(ii) against any and all loss, liability, damage, joint or several, 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
26
<PAGE> 27
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 Supplement 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 Supplement 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 connection with any one
action or separate but similar or related actions in the same jurisdiction
27
<PAGE> 28
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 Supplement 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 indemnified party and referred to above in this Section
7 shall be deemed to include any legal or
28
<PAGE> 29
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 relevant authorities in the
country or countries of origin of any foreign currency or currencies in
29
<PAGE> 30
which the Offered Securities are denominated or payable, or (iv) a downgrading
shall have occurred in the rating accorded to any debt securities or preferred
stock of the Company by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act or such organization shall have publicly announced
that it has under survellience or review, with possible negative implications,
its rating of any debt securities or preferred stock of the Company, or (v)
there shall have come to the attention of the Representatives any facts that
would cause them to reasonably believe that the Prospectus, at the time it was
required to be delivered to a purchaser of the Offered Securities, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time of such delivery, not misleading. As used in this Section
9, the term "Prospectus" means the Prospectus in the form first provided to the
applicable Underwriter or Underwriters for use in confirming sales of the
related Offered Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 5. Notwithstanding any such termination, (i)
the covenants set forth in Section 3(b), (d), and (e) with respect to any
offering of Offered Securities shall remain in effect so long as any Underwriter
owns any such Offered Securities purchased from the Company pursuant to this
Agreement and during the period when the Prospectus is required to be delivered
in connection with sales of the Offered Securities and (ii) the covenants set
forth in Section 3(c), (g), (h) and, if applicable, (i), the provisions of
Section 5, the indemnity agreement set forth in Section 6, the contribution
provisions set forth in Section 7 and the provisions of Sections 8, 11, 12 and
13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters shall fail at
the Closing Time or a Date of Delivery to purchase the Firm Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), then the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, during such 24 hours the Representatives
shall not have completed such arrangements for the purchase of all of the
Defaulted Securities, then:
(a) if the amount of Defaulted Securities does not exceed 10%
of the amount of Firm Securities to be purchased on such date,
each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the amount of Defaulted Securities exceeds 10% of the
number of Firm Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which
occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any
non-defaulting Underwriter.
30
<PAGE> 31
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: John B.
Clutterbuck, Mayor, Day, Caldwell & Keeton, L.L.P., 700 Louisiana, Suite 1900,
Houston, Texas 77002-2778. 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.
31
<PAGE> 32
EXHIBIT A
TERMS AGREEMENT
Convertible Preferred Stock
___________ __, 19__
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention: [Title]
Dear Sirs:
The undersigned underwriters (the "Underwriters") understand that
Apache Corporation (the "Company") proposes to issue and sell [number of] shares
of its [depositary shares, representing the right to receive its shares of]
convertible preferred stock, no par value, convertible into common stock, $1.25
par value per share and related rights to purchase common stock (the "Offered
Securities"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, the Underwriters offer to purchase, severally
and not jointly, the number of Offered Securities set forth below opposite their
respective names at $___ per share together with accrued dividend thereon from
__________, 19__ to the Closing Time:
<TABLE>
<CAPTION>
Number of
Underwriter Firm Securities
----------- ---------------
<S> <C>
---------------
Total
===============
</TABLE>
The Offered Securities shall have the following terms:
Title of the Offered Securities:
Number of Firm Securities to be issued:
Maximum number of Option Securities to be issued:
Current ratings:
Dividend rate:
Dividend payment dates:
Redemption provisions, if any:
A-1
<PAGE> 33
Conversion provisions:
Initial price to public:
Underwriting commission:
Purchase price
Closing Time:
Place of delivery and payment:
Company account for wire transfer of payment:
Lock-up pursuant to Section 3(j) of the
Underwriting Agreement Basic Terms: [yes] [no]
Lock-up pursuant to Section 4(e) of the
Underwriting Agreement Basic Terms: [yes] [no]
Note: If yes, see Schedule A hereto.
Securities exchanges, if any, on which application will be made to list the
Offered Securities:
Other terms, if any:
All the provisions contained in "Apache Corporation-Convertible
Preferred Stock--Underwriting Agreement Basic Terms" (the "Basic Terms"), filed
as an exhibit to the Registration Statement relating to the Offered Securities
and attached hereto as Annex A, are herein incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
Any notice by the Company to the Underwriters pursuant to this Terms
Agreement shall be sufficient if given in accordance with Section 11 of the
Basic Terms addressed to: [insert name and address of the lead manager or
managers or, if only one underwriter is a party hereto, of such firm] which
shall, for all purposes of this Agreement, be the "Representatives".
Very truly yours,
REPRESENTATIVE[S]
[Acting for themselves and as
Representative[s] of the Underwriters]
Accepted:
APACHE CORPORATION
By:
----------------------------
Title:
A-2
<PAGE> 34
SCHEDULE A
List of Persons and Entities Subject to Lock-Up
A-3
<PAGE> 35
EXHIBIT B
[Form of Lock-Up from Directors, Officers or Other
Stockholders Pursuant to Section 4(e)]
, 1999
[NAME OF LEAD UNDERWRITER]
[NAME(S) OF ANY CO-REPRESENTATIVE(S)]
as Representative(s) of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
Re: Proposed Public Offering by Apache Corporation
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director]1 of
Apache Corporation, a Delaware corporation (the "Company"), understands that
[name of lead underwriter][and [name(s) of co-representative(s), if any]]
propose(s) to enter into an Underwriting Agreement (the "Underwriting
Agreement") with the Company providing for the public offering of preferred
stock convertible into shares (the "Securities") of the Company's common stock,
par value $1.25 per share (the "Common Stock") and related rights to purchase
Common Stock. In recognition of the benefit that such an offering will confer
upon the undersigned as a stockholder [and an officer and/or director]1 of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Underwriting Agreement that, during a period of
90 days from the date of the Underwriting Agreement, the undersigned will not,
without the prior written consent of [name of lead underwriter], directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Company's Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock or any such substantially similar securities,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
Print Name:
- ----------------
(1) Delete or revise background language as appropriate.
B-1
<PAGE> 36
ANNEX A
[Apache Corporation--Convertible Preferred Stock--
Underwriting Agreement Basic Terms]
A-1
<PAGE> 1
EXHIBIT 99.7
APACHE CORPORATION
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
AS DEPOSITARY
AND
HOLDERS OF DEPOSITARY RECEIPTS
------------
DEPOSIT AGREEMENT
------------
DATED AS OF MAY ___, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I.
DEFINITIONS
<S> <C>
"Automatic Conversion"...................................................................1
"Certificate of Designation".............................................................1
"Certificate of Incorporation"...........................................................1
"Common Stock"...........................................................................1
"Company"................................................................................1
"Corporate Office".......................................................................1
"Deposit Agreement"......................................................................2
"Depositary".............................................................................2
"Depositary Share".......................................................................2
"Depositary's Agent".....................................................................2
"Mandatory Conversion Date"..............................................................2
"Receipt"................................................................................2
"record holder" or "holder"..............................................................2
"Registrar"..............................................................................2
"Securities Act".........................................................................2
"Stock" .................................................................................2
ARTICLE II.
BOOK-ENTRY FORM; FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER
AND SURRENDER OF RECEIPTS
SECTION 2.1. Book Entry Form; Form and Transfer of Receipts............................3
SECTION 2.2. Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof...........................................................5
SECTION 2.3. Registration of Transfer of Receipts......................................6
SECTION 2.4. Combination and Split-ups of Receipts.....................................6
SECTION 2.5. Surrender of Receipts and Withdrawal of Stock.............................6
SECTION 2.6. Limitations on Execution and Delivery, Transfer, Split-up,
Combination and Surrender of Receipts and Withdrawal or
Deposit of Stock..........................................................7
SECTION 2.7. Lost Receipts, etc........................................................7
SECTION 2.8. Cancellation and Destruction of Surrendered Receipts......................7
SECTION 2.9. Conversion of Stock into Common Stock.....................................8
SECTION 2.10. Interchangeability of Book-Entry Receipts and Receipts
in Physical, Certificated Form............................................9
SECTION 2.11. Automatic Conversion of Stock............................................10
</TABLE>
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ARTICLE III.
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.1. Filing Proofs, Certificates and Other Information........................11
SECTION 3.2. Payment of Taxes or Other Governmental Charges...........................11
SECTION 3.3. Withholding..............................................................12
SECTION 3.4. Representations and Warranties as to Stock...............................12
SECTION 3.5. Covenants and Warranties as to Common Stock..............................12
ARTICLE IV.
THE STOCK, NOTICES
SECTION 4.1. Cash Distributions.......................................................12
SECTION 4.2. Distributions Other Than Cash............................................12
SECTION 4.3. Subscription Rights, Preferences or Privileges...........................13
SECTION 4.4. Notice of Dividends, Fixing of Record Date for Holders of Receipts.......14
SECTION 4.5. Voting Rights............................................................14
SECTION 4.6. Changes Affecting Stock and Reclassifications, Recapitalizations, etc....14
SECTION 4.7. Reports..................................................................15
SECTION 4.8. Lists of Receipt Holders.................................................15
ARTICLE V.
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.1. Maintenance of Offices, Agencies, Transfer Books by the Depositary;
the Registrar............................................................15
SECTION 5.2. Prevention or Delay in Performance by the Depositary, the
Depositary's Agents, the Registrar or the Company........................16
SECTION 5.3. Obligations of the Depositary, the Depositary's Agents, the
Registrar and the Company................................................16
SECTION 5.4. Resignation and Removal of the Depositary, Appointment of
Successor Depositary.....................................................18
SECTION 5.5. Corporate Notices and Reports............................................18
SECTION 5.6. Deposit of Stock by the Company..........................................19
SECTION 5.7. Indemnification by the Company...........................................19
SECTION 5.8. Fees, Charges and Expenses...............................................19
ARTICLE VI.
AMENDMENT AND TERMINATION
SECTION 6.1. Amendment................................................................19
SECTION 6.2. Termination..............................................................20
</TABLE>
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ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. Counterparts..................................................20
SECTION 7.2. Exclusive Benefits of Parties.................................21
SECTION 7.3. Invalidity of Provisions......................................21
SECTION 7.4. Notices.......................................................21
SECTION 7.5. Depositary's Agents...........................................21
SECTION 7.6. Holders of Receipts Are Parties...............................22
SECTION 7.7. Governing Law.................................................22
SECTION 7.8. Headings......................................................22
SIGNATURES...................................................................22
</TABLE>
EXHIBIT A
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DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of May ___, 1999, among Apache Corporation,
a Delaware corporation, Norwest Bank Minnesota, National Association, as
Depositary, and all holders from time to time of Receipts issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide as hereinafter set forth in
this Deposit Agreement, for the deposit of shares of the Stock with the
Depositary, as agent for the beneficial owners of the Stock, for the purposes
set forth in this Deposit Agreement and for the issuance hereunder of the
Receipts evidencing Depositary Shares representing an interest in the Stock so
deposited; and
WHEREAS, the Receipts are to be substantially in the form annexed as
Exhibit A to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:
ARTICLE I.
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:
"Automatic Conversion" shall mean the conversion of Depositary Shares
into shares of Common Stock as described in Section 2.11 hereof.
"Certificate of Designation" shall mean the Certificate of
Designations, Preferences and Rights establishing and setting forth the rights,
preferences, privileges and limitations of the Stock, as filed with the
Secretary of State of the State of Delaware.
"Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation, as amended and restated from time to time, of the Company.
"Common Stock" shall mean the Company's Common Stock, par value $1.25
per share.
"Company" shall mean Apache Corporation, a Delaware corporation, and
its successors.
"Corporate Office" shall mean the office of the Depositary in South St.
Paul, Minnesota, at which at any particular time its business in respect of
matters governed by this
<PAGE> 6
Deposit Agreement shall be administered, which at the date of this Deposit
Agreement is located at 161 North Concord Exchange, South St. Paul, Minnesota
55075, Telephone: (651) 450-4064, Attention: Account Manager.
"Deposit Agreement" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time.
"Depositary" shall mean (i) Norwest Bank Minnesota, National
Association and any of its successors and assigns, as Depositary hereunder, and
(ii) any successor as Depositary hereunder.
"Depositary Share" shall mean the rights evidenced by the Receipts
executed and delivered hereunder, including the interests in Stock granted to
holders of Receipts pursuant to the terms and conditions of the Deposit
Agreement. Each Depositary Share shall represent an interest in one-fiftieth
(1/50th) of one share of Stock deposited with the Depositary hereunder and the
same proportionate interest in any and all other property received by the
Depositary in respect of such share of Stock and held under this Deposit
Agreement. Subject to the terms of this Deposit Agreement, each record holder of
a Receipt evidencing a Depositary Share or Shares is entitled, proportionately,
to all the rights, preferences and privileges of the Stock represented by such
Depositary Share or Shares, including the dividend, voting and liquidation
rights contained in the Certificate of Designation, and to the benefits of all
obligations and duties of the Company in respect of the Stock under the
Certificate of Designation and the Certificate of Incorporation.
"Depositary's Agent" shall mean an agent appointed by the Depositary as
provided, and for the purposes specified, in Section 7.5.
"Mandatory Conversion Date" shall mean May ___, 2002.
"Receipt" shall mean a Depositary Receipt executed and delivered
hereunder, in substantially the form of Exhibit A hereto, evidencing a
Depositary Share or Shares, as the same may be amended from time to time in
accordance with the provisions hereof.
"record holder" or "holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books maintained by or on
behalf of the Depositary for such purpose.
"Registrar" shall mean any company appointed to register ownership and
transfers of Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of the Company's Automatically Convertible
Equity Securities, Conversion Preferred Stock, Series C, no par value per share.
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ARTICLE II.
BOOK-ENTRY FORM; FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER
OF RECEIPTS
SECTION 2.1. Book Entry Form; Form and Transfer of Receipts. The
Company and the Depositary shall make application to The Depository Trust
Company ("DTC") for acceptance of all or a portion of the Receipts for its
book-entry settlement system. The Company hereby appoints the Depositary acting
through any authorized officer thereof as its attorney-in-fact, with full power
to delegate, for purposes of executing any agreements, certifications or other
instruments or documents necessary or desirable in order to effect the
acceptance of such Receipts for DTC eligibility, including but not limited to,
the FAST Balance Certificate Agreement between the Depositary and DTC (the "FAST
Agreement"). So long as the Receipts are eligible for book-entry settlement with
DTC except as otherwise set forth herein, or unless otherwise required by law,
all Depositary Shares to be traded on the New York Stock Exchange with
book-entry Settlement through DTC shall be represented by a single receipt (the
"DTC Receipt") which shall be deposited with DTC (or its designee) evidencing
all such Depositary Shares and registered in the name of the nominee of DTC
(initially expected to be Cede & Co.). Norwest Bank Minnesota, National
Association and any of its successors and assigns or such other entity as is
agreed to by DTC may hold the DTC Receipt as custodian for DTC. During any
period in which any Depositary Shares are evidenced by the DTC Receipt except as
otherwise set forth herein, no person acquiring Depositary Shares traded on the
New York Stock Exchange with book-entry settlement through DTC shall receive or
be entitled to receive physical delivery of the Receipts evidencing such
Depositary Shares. Ownership of beneficial interests in the DTC Receipt shall be
shown on, and the transfer of such ownership shall be effected through, records
maintained by (i) DTC or its nominee for such DTC Receipt, or (ii) institutions
that have accounts with DTC.
If DTC subsequently ceases to make its book-entry settlement system
available for the Receipts, the Company may instruct the Depositary regarding
making other arrangements for book-entry settlement. In the event that the
Receipts are not eligible for, or it is no longer necessary to have the Receipts
available in book-entry form, the Depositary shall provide written instructions
to DTC to deliver to the Depositary for cancellation the DTC Receipt, and the
Company shall instruct the Depositary to deliver to the beneficial owners of the
Depositary Shares previously evidenced by the DTC Receipt definitive Receipts in
physical form evidencing such Depositary Shares. Such definitive Receipts shall
be in the form annexed hereto as Exhibit A with appropriate insertions,
modifications and omissions, as hereafter provided.
The beneficial owners of Depositary Shares shall, except as stated
above with respect to Depositary Shares in book-entry form represented by the
DTC Receipt, be entitled to receive Receipts in physical, certificated form as
herein provided.
The Receipts may be typewritten, in the case of the DTC Receipt, and
otherwise shall, upon notice by the Company to the Depositary, be definitive
Receipts which shall be engraved, printed or typewritten and shall be
substantially in the form set forth in Exhibit A annexed to this
3
<PAGE> 8
Deposit Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. The DTC Receipt shall bear such legend or legends as may
be required by DTC in order for it to accept the Depositary Shares for its
book-entry settlement system.
Receipts shall be executed by the Depositary by the manual signature of
a duly authorized officer of the Depositary; provided, however, that such
signature may be a facsimile if a Registrar (other than the Depositary) shall
have countersigned the Receipts by manual signature of a duly authorized officer
of the Registrar. Pending the preparation of definitive Receipts, the
Depositary, upon the written order of the Company delivered in accordance with
Section 2.2, shall execute and deliver temporary Receipts which shall be
printed, lithographed, typewritten, photocopied or otherwise substantially of
the tenor of the definitive Receipts in lieu of which they are issued and with
appropriate insertions, omissions, substitutions and other variations as the
persons executing such Receipts may determine are necessary for such temporary
Receipts, as evidenced by their execution of such temporary Receipts. If
temporary Receipts are issued, the Company and the Depositary will cause
definitive Receipts to be prepared without unreasonable delay; provided that, if
such temporary Receipts are global Receipts, definitive Receipts need not be
prepared until the Receipts cease to be held in global form. After the
preparation of definitive Receipts, the temporary Receipts shall be exchangeable
for definitive Receipts upon surrender of the temporary Receipts at the
Corporate Office or such other office as the Depositary may designate, without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Receipts, the Depositary shall execute and deliver in exchange
therefor definitive Receipts representing the same number of Depositary Shares
as represented by the surrendered temporary Receipt or Receipts. Such exchange
shall be made at the Company's expense and without any charge therefor. Until so
exchanged, the temporary Receipts shall in all respects be entitled to the same
benefits under this Agreement, and with respect to the Stock, as definitive
Receipts.
No Receipt shall be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose unless it shall have been
executed as provided in the preceding paragraph. The Depositary shall record on
its books each Receipt executed as provided above and delivered as hereinafter
provided. Receipts bearing the manual or facsimile signature of anyone who was
at any time a duly authorized officer of the Depositary shall bind the
Depositary, notwithstanding that such officer has ceased to hold such office
prior to the delivery of such Receipts.
Receipts may be issued in denominations of any number of whole
Depositary Shares. All Receipts shall be dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Stock or the Depositary Shares may be listed
or to conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Receipts are subject by
reason of the date of issuance of the Stock or otherwise.
4
<PAGE> 9
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer shall be transferable by delivery with the same effect as
in the case of investment securities in general; provided, however, that the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.2. Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
the Company or any holder of Stock may deposit such Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for the
Stock to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a properly executed instrument of transfer in form satisfactory
to the Depositary, together with (i) all such certifications as may be required
by the Depositary in accordance with the provisions of this Deposit Agreement
and (ii) a written order of the Company or such holder, as the case may be,
directing the Depositary to execute and deliver to or upon the written order of
the person or persons stated in such order a Receipt or Receipts for the number
of Depositary Shares representing such deposited Stock.
Subject to the terms and conditions of this Deposit Agreement, Stock
may also be deposited hereunder in connection with the delivery of Receipts to
represent distributions under Section 4.2 and upon exercise of the rights to
subscribe referred to in Section 4.3.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary shall, as soon as transfer and registration can be
accomplished, present such certificate or certificates to the registrar and
transfer agent of the Stock for transfer and registration in the name of the
Depositary or its nominee of the Stock being deposited. Deposited Stock shall be
held by the Depositary in an account to be established by the Depositary at the
Corporate Office.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver, to or upon the order of the person or
persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section 2.2, a Receipt or Receipts for the number of
whole Depositary Shares representing the Stock so deposited and registered in
such name or names as may be requested by such person or persons. The Depositary
shall execute and deliver such Receipt or Receipts at the Corporate Office,
except that, at the request, risk and expense of any person requesting such
delivery and for the account of such person, such delivery may be made at such
other place as may be designated by such person. In each case, delivery will be
made only upon payment by such person to the Depositary of all taxes and other
governmental charges and any fees payable in connection with such deposit and
the transfer of the deposited Stock.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
5
<PAGE> 10
SECTION 2.3. Registration of Transfer of Receipts. Subject to the terms
and conditions of this Deposit Agreement, the Depositary shall register on its
books from time to time transfers of Receipts upon any surrender thereof at the
Corporate Office, or such other office as the Depositary may designate for such
purpose, by the record holder in person or by a duly authorized attorney,
properly endorsed or accompanied by a properly executed instrument of transfer,
together with evidence of the payment of any transfer taxes as may be required
by law. Upon such surrender, the Depositary shall execute a new Receipt or
Receipts and deliver the same to or upon the order of the person entitled
thereto evidencing the same aggregate number of Depositary Shares evidenced by
the Receipt or Receipts surrendered.
SECTION 2.4. Combination and Split-ups of Receipts. Upon surrender of a
Receipt or Receipts at the Corporate Office, or such other office as the
Depositary may designate for the purpose of effecting a split-up or combination
of Receipts, subject to the terms and conditions of this Deposit Agreement, the
Depositary shall execute and deliver a new Receipt or Receipts in the authorized
denominations requested evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered; provided, however, that
the Depositary shall not issue any Receipt evidencing a fractional Depositary
Share.
SECTION 2.5. Surrender of Receipts and Withdrawal of Stock.
(a) Except as provided in Section 2.5(b), no holder of a Receipt or
Receipts shall have the right to withdraw any of the shares of Stock represented
by such Receipts.
(b) Notwithstanding Section 2.5(a), the Company shall have the right to
withdraw any or all of the Stock (but only in whole shares of Stock) represented
by the Depositary Shares and all money and other property, if any, represented
by such Depositary Shares by surrendering the Receipt or Receipts evidencing
such Depositary Shares at the Corporate Office, or at such other office as the
Depositary may designate for such withdrawals (and cancellation of the
surrendered Receipts as provided in Section 2.8). After such surrender, without
unreasonable delay, the Depositary shall deliver to the Company the whole number
of shares of Stock and all such money and other property, if any, represented by
the Depositary Shares evidenced by the Receipt or Receipts so surrendered for
withdrawal. If the Receipt or Receipts delivered by the Company to the
Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of whole Depositary Shares
representing the whole number of shares of Stock to be withdrawn, the Depositary
shall at the same time, in addition to such whole number of shares of Stock and
such money and other property, if any, to be withdrawn, deliver to the Company,
or (subject to Section 2.3) upon its order, a new Receipt or Receipts evidencing
such excess number of whole Depositary Shares.
Delivery of the Stock and such money and other property being withdrawn
may be made by the delivery of such certificates, documents of title and other
instruments as the Depositary may deem appropriate, which, if required by the
Depositary, shall be properly endorsed or accompanied by proper instruments of
transfer.
The Depositary shall deliver the Stock and the money and other
property, if any, represented by the Depositary Shares evidenced by Receipts
surrendered for withdrawal, without unreasonable delay, at the office at which
such Receipts were surrendered, except that, at the
6
<PAGE> 11
request, risk and expense of the Company such delivery may be made, without
unreasonable delay, at such other place as may be designated by the Company.
For purposes of determining the number of Depositary Shares outstanding
on any dividend payment date for purposes of Section 8 of the Certificate of
Designation, the Receipts representing Depositary Shares acquired by the Company
on or prior to such dividend payment date and not theretofore delivered to the
Depositary for withdrawal and cancellation shall be deemed to be outstanding.
SECTION 2.6. Limitations on Execution and Delivery, Transfer, Split-up,
Combination and Surrender of Receipts and Withdrawal or Deposit of Stock. As a
condition precedent to the execution and delivery, registration of transfer,
split-up, combination, or surrender of any Receipt, the delivery of any
distribution thereon or deposit of Stock, the Depositary, any of the
Depositary's Agents or the Company may require any or all of the following: (i)
payment to it of a sum sufficient for the payment (or, in the event that the
Depositary or the Company shall have made such payment, the reimbursement to it)
of any tax or other governmental charge with respect thereto (including any such
tax or charge with respect to the Stock being deposited or withdrawn); (ii)
production of proof satisfactory to it as to the identity and genuineness of any
signature; and (iii) compliance with such reasonable regulations, if any, as the
Depositary or the Company may establish not inconsistent with the provisions of
this Deposit Agreement.
The deposit of Stock may be refused, or the registration of transfer,
split-up, combination or surrender of outstanding Receipts and the withdrawal of
deposited Stock may be suspended (i) during any period when the register of
stockholders of the Company is closed, (ii) if any such action is deemed
necessary or advisable by the Depositary, any of the Depositary's Agents or the
Company at any time or from time to time because of any requirement of law or of
any government or governmental body or commission, or under any provision of
this Deposit Agreement, or (iii) with the approval of the Company, for any other
reason. Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under this Deposit Agreement any shares of Stock that are
required to be registered under the Securities Act unless a registration
statement under the Securities Act is in effect as to such shares of Stock.
SECTION 2.7. Lost Receipts, etc. In case any Receipt shall be mutilated
or destroyed or lost or stolen, the Depositary shall execute and deliver a
Receipt of like form and tenor in exchange and substitution for such mutilated
Receipt or in lieu of and in substitution for such destroyed, lost or stolen
Receipt unless the Depositary has notice that such Receipt has been acquired by
a bona fide purchaser; provided, however, that the holder thereof provides the
Depositary with (i) evidence satisfactory to the Depositary of such destruction,
loss or theft of such Receipt, of the authenticity thereof and of his ownership
thereof, (ii) reasonable indemnification satisfactory to the Depositary or the
payment of any charges incurred by the Depositary in obtaining insurance in lieu
of such indemnification and (iii) payment of any expense (including fees,
charges and expenses of the Depositary) in connection with such execution and
delivery.
SECTION 2.8. Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary.
7
<PAGE> 12
Except as prohibited by applicable law or regulation, the Depositary shall, from
time to time, deliver such cancelled Receipts to the Company, who will retain
them in compliance with applicable regulations of the Securities and Exchange
Commission. Any Receipt evidenced in book-entry form shall be deemed cancelled
when the Depositary has caused the amount of Depositary Shares evidenced by the
DTC Receipt to be reduced in proportion to the number of Depositary Shares
evidenced by the surrendered Receipt.
SECTION 2.9. Conversion of Stock into Common Stock. Receipts may be
surrendered with written instructions to the Depositary to instruct the Company
to cause the conversion of any specified number of whole or fractional shares of
Stock represented by the Depositary Shares evidenced thereby into whole shares
of Common Stock at the conversion rate then in effect for the Stock (and,
therefore, for the Depositary Shares) specified in the Certificate of
Designation, as such conversion rate may be adjusted by the Company from time to
time as provided in the Certificate of Designation. Subject to the terms and
conditions of this Deposit Agreement and the Certificate of Designation, a
holder of a Receipt or Receipts evidencing Depositary Shares representing whole
or fractional shares of Stock may surrender such Receipt or Receipts at the
Corporate Office, or to such office as the Depositary may designate for such
purpose, or to such Depositary's Agents as the Depositary may designate for such
purpose, together with a notice of conversion duly completed and executed,
thereby directing the Depositary to instruct the Company to cause the conversion
of the number of shares or fractions thereof of underlying Stock specified in
such notice of conversion into shares of Common Stock, and an assignment of such
Receipt or Receipts to the Company, to any transfer agent for Depositary Shares
or in blank, duly completed and executed. Each optional conversion of Depositary
Shares will be effective immediately prior to the close of business on the date
on which the holder satisfies the requirements set forth in the foregoing
sentence. To the extent that a holder delivers to the Depositary for conversion
a Receipt or Receipts which in the aggregate are convertible into less than one
whole share of Common Stock, the holder shall receive an amount in cash in lieu
of such fractional shares of Common Stock as provided in the Certificate of
Designation. If more than one Receipt shall be delivered for conversion at one
time by the same holder, the number of whole shares of Common Stock issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of Receipts so delivered.
Upon receipt by the Depositary of a Receipt or Receipts, together with
notice of conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of shares or
fractions thereof of Stock and an assignment of such Receipt or Receipts to the
Company, to any transfer agent for the Depositary Shares or in blank, duly
completed and executed, the Depositary shall instruct the Company (i) to cause
the conversion of the Depositary Shares evidenced by the Receipts so surrendered
for conversion as specified in the written notice to the Depositary and (ii) to
cause the delivery to the holders of such Receipts of a certificate or
certificates evidencing the number of whole shares of Common Stock and the
amount of money, if any, to be delivered to the holders of Receipts surrendered
for conversion in payment of any accrued and unpaid dividends with respect to
such Depositary Shares and in lieu of fractional shares of Common Stock
otherwise issuable. The Company shall as promptly as practicable after receipt
thereof cause the delivery of (i) a certificate or certificates evidencing the
number of whole shares of Common Stock into which the Stock represented by the
Depositary Shares evidenced by such Receipt or Receipts has been
8
<PAGE> 13
converted, and (ii) any money or other property to which the holder is entitled.
Upon such conversion, the Depositary (i) shall deliver to the holder a Receipt
evidencing the number of Depositary Shares, if any, which such holder has
elected not to convert and evidencing the number of Depositary Shares, if any,
in excess of the number of Depositary Shares representing Stock which has been
so converted, (ii) shall cancel the Depositary Shares evidenced by Receipts
surrendered for conversion and (iii) shall deliver to the Company or its
transfer agent for the Stock for cancellation the shares of Stock represented by
the Depositary Shares evidenced by the Receipts so surrendered and so converted.
The record holder of Depositary Shares on any dividend payment record
date established by the Depositary pursuant to Section 4.4 shall be entitled to
receive the dividend payable with respect to such Depositary Shares on the
corresponding dividend payment date notwithstanding the subsequent conversion of
the shares of Stock to which such Depositary Shares relate. If a share of Stock
is converted between the record date with respect to any dividend payment on the
Stock and the next succeeding dividend payment date, any holder of Receipts
surrendered with instructions to the Depositary for conversion of the underlying
Stock shall pay to the Depositary an amount equal to the dividend payable on
such dividend payment date on the Depositary Shares represented by the Receipts
being surrendered for conversion. Any holder of Receipts on a dividend payment
record date who (or whose transferee) surrenders the Receipts with instructions
to the Depositary for conversion of the underlying Stock on the corresponding
dividend payment date will receive the dividend payable with respect to the
Depositary Shares underlying such Receipts and will not be required to include
payment of the amount of such dividend upon surrender of the Receipts for
conversion.
Upon the conversion of any shares of Stock for which a request for
conversion has been made by the holder of Depositary Shares representing such
shares, all dividends in respect of such Depositary Shares shall cease to
accrue, such Depositary Shares shall be deemed no longer outstanding, all rights
of the holder of the Receipt with respect to such Depositary Shares (except the
right to receive the Common Stock, any cash payable with respect to any
fractional shares of Common Stock as provided herein, any cash payable on
account of accrued dividends with respect to such Depositary Shares, and any
Receipts evidencing Depositary Shares not so converted) shall terminate, and the
Receipt evidencing such Depositary Shares shall be cancelled in accordance with
Section 2.8 hereof.
No fractional shares of Common Stock shall be issuable upon conversion
of Stock underlying the Depositary Shares. If any holder of Receipts surrendered
with instructions to the Depositary for conversion of the underlying Stock would
be entitled to a fractional share of Common Stock upon such conversion, the
Company shall cause to be delivered to such holder an amount in cash for such
fractional share as provided in the Certificate of Designation.
SECTION 2.10. Interchangeability of Book-Entry Receipts and Receipts in
Physical, Certificated Form. Subject to the terms and conditions of this Deposit
Agreement, upon receipt by the Depositary of written instructions from a DTC
participant on behalf of any person having a beneficial interest in Depositary
Shares evidenced by the DTC Receipt for the purpose of directing the Depositary
to execute and deliver a Receipt in physical, certificated form evidencing such
Depositary Shares, the Depositary shall follow the procedures set forth in the
FAST Agreement for the purpose of reducing the number of Depositary Shares
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evidenced by the DTC Receipt and, following such reduction, shall execute and
deliver to or upon the order of the person or persons named in such order a
Receipt or Receipts registered in the name or names requested by such person and
evidencing in the aggregate the number of Depositary Shares equal to the
reduction in the number evidenced by the DTC Receipt. The Depositary may require
in such written instructions any certification or representation as it shall
deem necessary to comply with applicable law.
Subject to the terms and conditions of this Deposit Agreement, upon
receipt by the Depositary of a Receipt or Receipts in physical, certificated
form, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Depositary, including any required certifications, and
together with written instructions directing the Depositary to adjust its
records to reflect an increase in the aggregate amount of Depositary Shares
evidenced by the DTC Receipt (including, without limitation, information
regarding the DTC participant account to be credited with such increase), and
upon payment of the fees and expenses of the Depositary, the Depositary shall
cancel such Receipt or Receipts in physical, certificated form and shall follow
the procedures set forth in the FAST Agreement for the purpose of reflecting
such increase in the number of Depositary Shares evidenced by the DTC Receipt.
SECTION 2.11. Automatic Conversion of Stock. On the Mandatory
Conversion Date, as provided in the Certificate of Designation, provided that
the Company shall then have delivered to the Depositary the shares of Common
Stock and the aggregate amount of cash required to pay any accrued and unpaid
dividends on the Depositary Shares and for fractional share interests issuable
and payable upon Automatic Conversion of the Stock then deposited with the
Depositary, the Depositary shall convert (using such shares of Common Stock and
cash so delivered to it) each holder's Depositary Shares into the proportionate
number of whole shares of Common Stock and the proportionate amount of such cash
to which such holder is thereby entitled.
The Depositary shall, as directed by the Company, mail, first class
postage prepaid, notice of such Automatic Conversion of Stock and the proposed
simultaneous Automatic Conversion of the Depositary Shares, not less than five
and not more than 15 days prior to the Mandatory Conversion Date. Such notice
shall be mailed to each holder at the address of such holder as the same appears
on the records of the Depositary at the close of business on the second business
day immediately preceding the date on which the mailing of such notices is
commenced; but neither failure to mail any such notice to one or more holders
nor any defect in any notice shall affect the sufficiency of the proceedings for
Automatic Conversion. The Company shall provide the Depositary with such notice,
and each such notice shall state: the Mandatory Conversion Date; that all
outstanding Depositary Shares on the Mandatory Conversion Date will be
automatically converted into shares of Common Stock and the conversion rate at
which such Automatic Conversion shall occur; the amount of accrued and unpaid
dividends, if any, payable with respect to each Depositary Share to be so
converted; the place or places where Receipts to be so converted are to be
surrendered for conversion; that dividends in respect of the Stock represented
by the Depositary Shares to be so converted shall cease to accrue as of the
Mandatory Conversion Date; and such additional information as the Company in its
discretion deems appropriate.
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From and after the Mandatory Conversion Date, the Depositary Shares
automatically converted into shares of Common Stock shall be deemed no longer to
be outstanding and all rights of the holders of Receipts evidencing such
Depositary Shares (except the right to receive the shares of Common Stock and
any cash payable upon Automatic Conversion) shall, to the extent of such
Depositary Shares, cease and terminate. Upon surrender, in accordance with the
notice specified in the preceding paragraph, of the Receipts evidencing such
Depositary Shares (properly endorsed or assigned for transfer, if the Depositary
shall so require), the holders of such Receipts shall receive for each such
Depositary Share a number of shares of Common Stock equal to one fiftieth
(1/50th) of the number of shares of Common Stock and of the cash for accrued and
unpaid dividends delivered in respect of each share of automatically converted
Stock. The foregoing shall be subject further to the terms and conditions of the
Certificate of Designation.
ARTICLE III.
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.1. Filing Proofs, Certificates and Other Information. Any
person presenting Stock for deposit or any holder of a Receipt may be required
from time to time to file such proof of residence or other information, to
execute such certificates and to make such representations and warranties as the
Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company may withhold or delay the delivery of any Receipt or
the registration of transfer of any Receipt, the withdrawal of the Stock
represented by the Depositary Shares evidenced by any Receipt or the
distribution of any dividend or other distribution until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
SECTION 3.2. Payment of Taxes or Other Governmental Charges. If any tax
or other governmental charge shall become payable by or on behalf of the
Depositary with respect to (i) any Receipt, (ii) the Depositary Shares evidenced
by such Receipt, (iii) the Stock (or fractional interest therein) or other
property represented by such Depositary Shares, or (iv) any transaction referred
to in Section 4.6, such tax (including transfer, issuance or acquisition taxes,
if any) or governmental charge shall be payable by the holder of such Receipt,
who shall pay the amount thereof to the Depositary. Until such payment is made,
registration or transfer of any Receipt or any split-up or combination thereof
or any withdrawal of the Stock or money or other property, if any, represented
by the Depositary Shares evidenced by such Receipt may be refused, any dividend
or other distribution may be withheld and any part or all of the Stock or other
property represented by the Depositary Shares evidenced by such Receipt may be
sold for the account of the holder thereof (after attempting by reasonable means
to notify such holder prior to such sale). Any dividend or other distribution so
withheld and the proceeds of any such sale may be applied to any payment of such
tax or other governmental charge, the holder of such Receipt remaining liable
for any deficiency.
SECTION 3.3. Withholding. The Depositary shall act as the tax
withholding agent for any payments, distributions made with respect to the
Depositary Shares and Receipts, and the Stock. The Depositary shall be
responsible with respect to the Depositary Shares, Receipts
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and Stock for the timely (i) collection and deposit of any required withholding
or backup withholding tax, and (ii) filing of any information returns or other
documents with federal (and other applicable) taxing authorities.
SECTION 3.4. Representations and Warranties as to Stock. In the case of
the initial deposit of the Stock, the Company and, in the case of subsequent
deposits thereof, each person so depositing Stock under this Deposit Agreement
shall be deemed thereby to represent and warrant that such Stock and each
certificate therefor are valid and that the person making such deposit is duly
authorized to do so. Such representations and warranties shall survive the
deposit of the Stock and the issuance of Receipts therefor.
SECTION 3.5. Covenants and Warranties as to Common Stock. The Company
covenants that it will keep reserved or otherwise available a sufficient number
of authorized and unissued shares of Common Stock or issued shares of Common
Stock held in its treasury, or both, to meet conversion requirements in respect
of the Stock and that it will give written notice to the Depositary of any
adjustments in the conversion price as set forth in the Certificate of
Designation. The Company represents and warrants that the Common Stock issued
upon conversion of Stock, when issued, will be validly issued, fully paid and
non-assessable. Such representation and warranty shall survive the conversion of
the Stock into such Common Stock.
ARTICLE IV.
THE STOCK, NOTICES
SECTION 4.1. Cash Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the Stock, the Depositary shall,
subject to Section 3.2, distribute to record holders of Receipts on the record
date fixed pursuant to Section 4.4 such amounts of such sum as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required by law to withhold and does
withhold from any cash dividend or other cash distribution in respect of the
Stock an amount on account of taxes, the amount made available for distribution
or distributed in respect of Depositary Shares shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case may
be, only such amount, however, as can be distributed without attributing to any
owner of Depositary Shares a fraction of one cent and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to record holders of Receipts then
outstanding.
SECTION 4.2. Distributions Other Than Cash. Whenever the Depositary
shall receive any distribution other than cash, rights, preferences or
privileges upon the Stock, the Depositary shall, subject to Section 3.2,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.4 such amounts of the securities or property received by it as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders, in any manner that the
Depositary and the Company may deem equitable and practicable for accomplishing
such distribution. If, in the
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opinion of the Company after consultation with the Depositary, such distribution
cannot be made proportionately among such record holders, or if for any other
reason (including any tax withholding or securities law requirement), the
Depositary deems, after consultation with the Company, such distribution not to
be feasible, the Depositary may, with the approval of the Company which approval
shall not be unreasonably withheld, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
(at public or private sale) of the securities or property thus received, or any
part thereof, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall, subject to Section 3.2, be distributed
or made available for distribution, as the case may be, by the Depositary to
record holders of Receipts as provided by Section 4.1 in the case of a
distribution received in cash.
SECTION 4.3. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Company shall instruct
(including by the issue to such record holders of warrants representing such
rights, preferences or privileges); provided, however, that (a) if at the time
of issue or offer of any such rights, preferences or privileges the Company
determines and instructs the Depositary that it is not lawful or feasible to
make such rights, preferences or privileges available to some or all holders of
Receipts (by the issue of warrants or otherwise) or (b) if and to the extent
instructed by holders of Receipts who do not desire to exercise such rights,
preferences or privileges, the Depositary shall then, in each case, and if
applicable laws or the terms of such rights, preferences or privileges so
permit, sell such rights, preferences or privileges of such holders at public or
private sale, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall be distributed by the Depositary to the
record holders of Receipts entitled thereto as provided by Section 4.1 in the
case of a distribution received in cash.
If registration under the Securities Act of the securities to which any
rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold such securities, the Company shall promptly file
a registration statement pursuant to the Securities Act with respect to such
rights, preferences or privileges and securities and use its best efforts and
take all steps available to it to cause such registration statement to become
effective sufficiently in advance of the expiration of such rights, preferences
or privileges to enable such holders to exercise such rights, preferences or
privileges. In no event shall the Depositary make available to the holders of
Receipts any right, preference or privilege to subscribe for or to purchase any
securities unless and until such registration statement shall have become
effective or unless the offering and sale of such securities to such holders are
exempt from registration under the provisions of the Securities Act.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its reasonable best efforts to take such action or obtain such
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authorization, consent or permit sufficiently in advance of the expiration of
such rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges.
SECTION 4.4. Notice of Dividends, Fixing of Record Date for Holders of
Receipts. Whenever (i) any cash dividend or other cash distribution shall become
payable, or any distribution other than cash shall be made or any rights,
preferences or privileges shall at any time be offered, with respect to the
Stock, or (ii) the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice, the Depositary shall in each such instance fix a record date (which
shall be the same date as the record date fixed by the Company with respect to
the Stock) for the determination of the holders of Receipts (x) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or (y) who shall be entitled
to give instructions for the exercise of voting rights at any such meeting or to
receive notice of such meeting.
SECTION 4.5. Voting Rights. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice,
which shall be provided by the Company and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
holders of Receipts at the close of business on a specified record date fixed
pursuant to Section 4.4 will be entitled, subject to any applicable provision of
law, the Certificate of Incorporation or the Certificate of Designation, to
instruct the Depositary as to the exercise of the voting rights pertaining to
the Stock represented by their respective Depositary Shares and (iii) a brief
statement as to the manner in which such instructions may be given. Upon the
written request of a holder of a Receipt on such record date, the Depositary
shall endeavor insofar as practicable to vote or cause to be voted the Stock
represented by the Depositary Shares evidenced by such Receipt in accordance
with the instructions set forth in such request. The Company hereby agrees to
take all reasonable action that may be deemed necessary by the Depositary in
order to enable the Depositary to vote such Stock or cause such Stock to be
voted. In the absence of specific instructions from the holder of a Receipt, the
Depositary will abstain from voting to the extent of the Stock represented by
the Depositary Shares evidenced by such Receipt.
SECTION 4.6. Changes Affecting Stock and Reclassifications,
Recapitalizations, etc. Upon any change in par or stated value, split-up,
combination or any other reclassification of the Stock, or upon any
recapitalization, reorganization, merger, amalgamation or consolidation or sale
of all or substantially all the Company's assets affecting the Company or to
which it is a party, the Depositary may in its discretion with the approval of
the Company, and shall upon the specific instructions of the Company, (a) make
such adjustments in (i) the fraction of an interest represented by one
Depositary Share in one share of Stock and (ii) the ratio of the Optional
Conversion Rate and Exchange Rate per Depositary Share to the Optional
Conversion Rate and Exchange Rate of a share of Stock, in each case as may be
necessary fully to reflect the effects of such change in par or stated value,
split-up, combination or other reclassification of Stock, or of such
recapitalization, reorganization, merger, amalgamation, combination or sale and
(b) treat any securities which shall be received by the Depositary in exchange
for or upon conversion of or in respect of the Stock as new deposited securities
under this Deposit Agreement, and Receipts then outstanding shall thenceforth
represent the new
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deposited securities so received in exchange for or upon conversion or in
respect of such Stock. In any such case, the Depositary may in its discretion,
with the approval of the Company, execute and deliver additional Receipts, or
may call for the surrender of all outstanding Receipts to be exchanged or new
Receipts specifically describing such new deposited securities.
Anything to the contrary herein notwithstanding, holders of Receipts
shall have the right from and after the effective date of any such change in par
or stated value, split-up, combination or other reclassification of the Stock or
any such recapitalization, reorganization, merger, amalgamation, consolidation
or sale of substantially all the assets of the Company to surrender such
Receipts to the Depositary with instructions to convert, exchange or surrender
the Stock represented thereby only into or for, as the case may be, the kind and
amount of shares of Stock and other securities and cash into which the Stock
evidenced by such Receipts might have been converted or for which such Stock
might have been exchanged or surrendered immediately prior to the effective date
of such transaction. The Company shall cause effective provision to be made in
the charter of the resulting or surviving corporation (if other than the
Company) for protection of such rights as may be applicable upon exchange of
such Stock for securities or property or cash of the surviving corporation in
connection with the transactions set forth above. The Company shall cause any
such surviving corporation (if other than the Company) expressly to assume the
obligations of the Company hereunder.
SECTION 4.7. Reports. The Company or, at the option of the Company, the
Depositary shall forward to the holders of Receipts any reports and
communications received from the Company that are received by the Depositary as
the holder of Stock.
SECTION 4.8. Lists of Receipt Holders. Promptly upon request from time
to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.
At the expense of the Company, the Company shall have the right to inspect
transfer and registration records of the Depositary, any Depositary's Agent or
the Registrar, take copies thereof and require the Depositary, any Depositary's
Agent or the Registrar to supply copies of such portions of such records as the
Company may request.
ARTICLE V.
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.1. Maintenance of Offices, Agencies, Transfer Books by the
Depositary; the Registrar. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain (i) at the Corporate
Office facilities for the execution and delivery, registration, registration of
transfer, surrender, split-up and combination of Receipts and deposit and
withdrawal of Stock and (ii) at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration, registration of transfer, surrender,
split-up and combination of Receipts and deposit and withdrawal of Stock, all in
accordance with the provisions of this Deposit Agreement.
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The Depositary, acting as transfer agent and Registrar, shall keep
books at the Corporate Office for the registration and transfer of Receipts,
which books at all reasonable times shall be open for inspection by the record
holders of Receipts; provided that any such holder requesting to exercise such
right shall certify to the Depositary that such inspection shall be for a proper
purpose reasonably related to such person's interest as an owner of Depositary
Shares. The Depositary shall consult with the Company upon receipt of any
request for inspection. The Depositary may close such books, at any time or from
time to time, when deemed expedient by it in connection with the performance of
its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the Stock
represented by such Depositary Shares shall be listed on one or more stock
exchanges, the Depositary shall, with the approval of the Company, appoint a
Registrar for registry of such Receipts or Depositary Shares in accordance with
the requirements of such exchange or exchanges. Such Registrar (which may be the
Depositary if so permitted by the requirements of such exchange or exchanges)
may be removed and a substitute registrar appointed by the Depositary upon the
request or with the approval of the Company. In addition, if the Receipts, such
Depositary Shares or such Stock are listed on one or more stock exchanges, the
Depositary will, at the request of the Company, arrange such facilities for the
delivery, registration, registration of transfer, surrender, split-up,
combination or redemption of such Receipts, such Depositary Shares or such Stock
as may be required by law or applicable stock exchange regulations.
SECTION 5.2. Prevention or Delay in Performance by the Depositary, the
Depositary's Agents, the Registrar or the Company. Neither the Depositary nor
any Depositary's Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt, if by reason of any provision of any
present or future law or regulation thereunder of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Registrar or any Depositary's Agent, by reason of any provision, present or
future, of the Certificate of Incorporation or the Certificate of Designation
or, in the case of the Company, the Depositary, the Registrar or any
Depositary's Agent, by reason of any act of God or war or other circumstances
beyond the control of the relevant party, the Depositary, any Depositary's
Agent, the Registrar or the Company shall be prevented or forbidden from doing
or performing any act or thing that the terms of this Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
the Registrar or the Company incur any liability to any holder of a Receipt (i)
by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of this Deposit Agreement provide
shall or may be done or performed, or (ii) by reason of any exercise of, or
failure to exercise, any discretion provided for in this Deposit Agreement
except, in the case of the Depositary, any Depositary's Agent or the Registrar,
if any such exercise or failure to exercise discretion is caused by its gross
negligence or willful misconduct.
SECTION 5.3. Obligations of the Depositary, the Depositary's Agents,
the Registrar and the Company. The Company assumes no obligation and shall be
subject to no liability under this Deposit Agreement or the Receipts to holders
or other persons, except to perform in good faith such obligations as are
specifically set forth and undertaken by it to perform in this Deposit
Agreement. Each of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject to no liability under this Deposit
Agreement or the Receipts to holders or other persons, except to perform such
obligations as are specifically set
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forth and undertaken by it to perform in this Deposit Agreement without gross
negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor
the Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to Stock, Depositary Shares or
Receipts or Common Stock that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor
the Company shall be liable for any action or any failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of a Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
The Depositary, any Depositary's Agent, the Registrar and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
The Depositary, the Registrar and any Depositary's Agent may own and
deal in any class of securities of the Company and its affiliates and in
Receipts or Depositary Shares. The Depositary may also act as transfer agent or
registrar of any of the securities of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
nor the Registrar shall be deemed to be an "issuer" of the Stock, the Depositary
Shares, or the Receipts or other securities issued upon exchange or conversion
of the Stock under the federal securities laws or applicable state securities
laws, it being expressly understood and agreed that the Depositary and any
Depositary's Agent and the Registrar are acting only in a ministerial capacity;
provided, however, that the Depositary agrees to comply with all information
reporting and withholding requirements applicable to it under law or this
Deposit Agreement in its capacity as Depositary.
Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent nor the Registrar makes any representation or
has any responsibility as to the validity of the registration statement pursuant
to which the Depositary Shares are registered under the Securities Act, the
Stock, the Depositary Shares or any instruments referred to therein or herein,
or as to the correctness of any statement made therein or herein; provided,
however, that the Depositary is responsible for its representations in this
Deposit Agreement.
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Stock at any time deposited with the Depositary hereunder or
of the Depositary Shares, as to the validity or sufficiency of this Deposit
Agreement, as to the value of the Depositary Shares or as to any right, title or
interest of the record holders of Receipts in and to the Depositary Shares
except that the Depositary hereby represents and warrants as follows: (i) the
Depositary has been duly organized and is validly existing and in good standing
under the
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laws of the State of Minnesota, with full power, authority and legal right under
such law to execute, deliver and carry out the terms of this Deposit Agreement;
(ii) this Deposit Agreement has been duly authorized, executed and delivered by
the Depositary; and (iii) this Deposit Agreement constitutes, and when executed
and delivered, each Receipt will constitute, a valid and binding obligation of
the Depositary, enforceable against the Depositary in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law). The Depositary shall not be accountable for the use or
application by the Company of the Depositary Shares or the Receipts or the
proceeds thereof.
SECTION 5.4. Resignation and Removal of the Depositary, Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice via registered mail of its election to do so
delivered to the Company, such resignation to take effect upon the appointment
of a successor depositary and its acceptance of such appointment as hereinafter
provided.
The Depositary may at any time be removed by the Company by written
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company, having its principal office in the United States of America and having
a combined capital and surplus of at least $50,000,000. If a successor
depositary shall not have been appointed in 60 days, the resigning or removed
Depositary may petition a court of competent jurisdiction to appoint a successor
depositary. Every successor depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall promptly
execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all rights, title and interest in the Stock and any moneys or property held
hereunder to such successor and shall deliver to such successor a list of the
record holders of all outstanding Receipts. Any successor depositary shall
promptly mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
depositary may execute the Receipts either in the name of the predecessor
depositary or in the name of the successor depositary.
SECTION 5.5. Corporate Notices and Reports. The Company agrees that it
will deliver to the Depositary, and the Depositary will, promptly after receipt
thereof, transmit to
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the record holders of Receipts, in each case at the address recorded in the
Depositary's books, copies of all notices and reports (including financial
statements) required by law, by the rules of any national securities exchange
upon which the Stock, the Depositary Shares or the Receipts are listed or by the
Certificate of Incorporation and the Certificate of Designation to be furnished
by the Company to holders of Stock. Such transmission will be at the Company's
expense and the Company will provide the Depositary with such number of copies
of such documents as the Depositary may reasonably request. In addition, the
Depositary will transmit to the record holders of Receipts at the Company's
expense such other documents as may be requested by the Company.
SECTION 5.6. Deposit of Stock by the Company. The Company agrees with
the Depositary that neither the Company nor any company controlled by the
Company will at any time deposit any Stock if such Stock is required to be
registered under the provisions of the Securities Act and no registration
statement is at such time in effect as to such Stock.
SECTION 5.7. Indemnification by the Company. The Company shall
indemnify the Depositary for, and hold it harmless against, any loss, liability,
claim or expense ("Loss") arising out of or in connection with its duties under
this Deposit Agreement, including the reasonable costs and expenses of defending
itself against Loss, unless such Loss shall have been determined by a court of
competent jurisdiction to be a result of the Depositary's gross negligence or
willful misconduct. Anything to the contrary notwithstanding, in no event shall
the Depositary be liable for special, indirect, consequential or incidental loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Depositary has been advised of the likelihood of such damages.
SECTION 5.8. Fees, Charges and Expenses. No fees, charges and expenses
of the Depositary or any Depositary's Agent hereunder or of any Registrar shall
be payable by any person other than the Company, except for any taxes and other
governmental charges and except as provided in this Deposit Agreement. If, at
the request of a holder of a Receipt, the Depositary incurs fees, charges or
expenses for which it is not otherwise liable hereunder, such holder or other
person will be liable for such fees, charges and expenses. All other fees,
charges and expenses of the Depositary and any Depositary's Agent hereunder and
of any Registrar (including, in each case, reasonable fees and expenses of
counsel) incident to the performance of their respective obligations hereunder
will be paid from time to time upon consultation and agreement between the
Depositary and the Company as to the amount and nature of such fees, charges and
expenses.
ARTICLE VI.
AMENDMENT AND TERMINATION
SECTION 6.1. Amendment. The form of the Receipts and any provision of
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable; provided, however, that no such amendment that
shall materially and adversely alter the rights of the holders of Receipts shall
be effective as to outstanding Receipts until the expiration of 90 days after
notice of such amendment shall have been given to the record holders of
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<PAGE> 24
outstanding Receipts and unless such amendment shall have been approved by the
holders of at least a majority of the Depositary Shares outstanding. In no event
shall any amendment impair the right, subject to the provisions of Sections 2.3,
2.5 and 2.6 and Article III, of any owner of any Depositary Shares to surrender
the Receipt evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the Stock and all money and other property,
if any, represented thereby, except in order to comply with mandatory provisions
of applicable law.
SECTION 6.2. Termination. This Deposit Agreement may be terminated by
the Company or the Depositary only after (i) there shall have been made a final
distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Depositary Shares pursuant to Section 4.1 or 4.2,
as applicable, or (ii) each share of Stock shall have been converted into shares
of Common Stock.
If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the holders
thereof and shall not give any further notices (other than notice of such
termination) or perform any further acts under this Deposit Agreement, except as
provided below and that the Depositary shall continue to collect dividends and
other distributions pertaining to Stock, shall sell rights, preferences or
privileges as provided in this Deposit Agreement and shall continue to deliver
the Stock and any money and other property represented by Receipts, without
liability for interest thereon, upon surrender thereof by the holders thereof.
At any time after the expiration of two years from the date of termination, the
Depositary may sell Stock then held hereunder at public or private sale, at such
places and upon such terms as it deems proper and may thereafter hold in a
segregated account the net proceeds of any such sale, together with any money
and other property held by it hereunder, without liability for interest, for the
benefit, pro rata in accordance with their holdings, of the holders of Receipts
that have not heretofore been surrendered. After making such sale, the
Depositary shall be discharged from all obligations under this Deposit Agreement
except to account for such net proceeds and money and other property. Upon the
termination of this Deposit Agreement, the Company shall be discharged from all
obligations under this Deposit Agreement except for its obligations to the
Depositary, any Depositary's Agent and any Registrar under Sections 5.7 and 5.8.
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. Counterparts. This Deposit Agreement may be executed by
the Company and the Depositary in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Deposit Agreement. Copies of this Deposit Agreement
shall be filed with the Depositary and the Depositary's Agents and shall be open
to inspection during business hours at the Corporate Office and the respective
offices of the Depositary's Agents, if any, by any holder of a Receipt.
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<PAGE> 25
SECTION 7.2. Exclusive Benefits of Parties. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.3. Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.4. Notices. Any notices to be given to the Company hereunder
or under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail, or by telegram or telex or
telecopier confirmed by letter, addressed to the Company at 2000 Post Oak
Boulevard, Suite 100, Houston, Texas 77056-4400, Attention: Corporate Secretary,
or at any other place to which the Company may have transferred its principal
executive office.
Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Depositary at the Corporate Office.
Except as provided in the next paragraph, any notices given to any
record holder of a Receipt hereunder or under the Receipts shall be in writing
and shall be deemed to have been duly given if personally delivered or sent by
mail, or by telegram or telex or telecopier confirmed by letter, addressed to
such record holder at the address of such record holder as it appears on the
books of the Depositary or, if such holder shall have filed with the Depositary
a written request that notices intended for such holder be mailed to some other
address, at the address designated in such request.
In addition, whenever the Certificate of Designation requires any
notice to be published, the Depositary will, if requested by the Company, cause
such notice to be published in the manner directed by the Company.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telegram or telex or telecopier message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company may,
however, act upon any telegram or telex or telecopier message received by it
from the other or from any holder of a Receipt, notwithstanding that such
telegram or telex or telecopier message shall not subsequently be confirmed by
letter as aforesaid.
SECTION 7.5. Depositary's Agents. The Depositary may, with the approval
of the Company which approval shall not be unreasonably withheld, from time to
time appoint one or more Depositary's Agents to act in any respect for the
Depositary for the purposes of this Deposit Agreement and may vary or terminate
the appointment of such Depositary's Agents.
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<PAGE> 26
SECTION 7.6. Holders of Receipts Are Parties. Notwithstanding that
holders of Receipts have not executed and delivered this Deposit Agreement or
any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions, and be entitled to all of the benefits, hereof and of the
Receipts by acceptance of delivery of Receipts.
SECTION 7.7. Governing Law. This Deposit Agreement and the Receipts and
all rights hereunder and thereunder and provisions hereof and thereof shall be
governed by, and construed in accordance with, the law of the State of New York
without giving effect to principles of conflict of laws.
SECTION 7.8. Headings. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or to have any bearing upon the meaning or interpretation
of any provision contained herein or in the Receipts.
22
<PAGE> 27
IN WITNESS WHEREOF, Apache Corporation and Norwest Bank Minnesota,
National Association, have duly executed this Deposit Agreement as of the day
and year first above set forth and all holders of Receipts shall become parties
hereto by and upon acceptance by them of delivery of Receipts issued in
accordance with the terms hereof.
APACHE CORPORATION
Attest:
By: By:
----------------------------------- -----------------------------
Cheri L. Peper Authorized Officer
Corporate Secretary
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Depositary
Attest:
By: By:
----------------------------------- -----------------------------
Authorized Officer
23
<PAGE> 28
EXHIBIT A
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES
EACH REPRESENTING 1/50 OF A SHARE OF
AUTOMATICALLY CONVERTIBLE EQUITY SECURITIES,
CONVERSION PREFERRED STOCK, SERIES C
OF
APACHE CORPORATION
No. ____ CUSIP: 037411 60 0
Norwest Bank Minnesota, National Association (the "Depositary") hereby
certifies that Cede & Co. is the registered owner of
______________________________________________ (_________) Depositary Shares
(the "Depositary Shares"), each Depositary Share representing 1/50 of a share of
Automatically Convertible Equity Securities, Conversion Preferred Stock, Series
C, no par value (the "Stock"), of Apache Corporation, a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
deposited with the Depositary and the same proportionate interest in any and all
other property received by the Depositary in respect of such shares of Stock and
held by the Depositary under the Deposit Agreement (as defined below). Subject
to the terms of the Deposit Agreement, each owner of a Depositary Share is
entitled, proportionately, to all the rights, preferences and privileges of the
Stock represented thereby, including the dividend, conversion, exchange, voting,
liquidation and other rights contained in the Certificate of Designations,
Preferences and Rights establishing the rights, preferences, privileges and
limitations of the Stock (the "Certificate of Designation"), copies of which are
on file at the office of the Depositary in The City of South St. Paul, at which
at any particular time its business in respect of matters governed by the
Deposit Agreement shall be administered, which at the time of the execution of
the Deposit Agreement is located at 161 North Concord Exchange, South St. Paul,
Minnesota 55075 (the "Corporate Office").
This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any purpose
unless this Receipt shall have been
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<PAGE> 29
executed manually or, if a Registrar for the Receipts (other than the
Depositary) shall have been appointed, by facsimile by the Depositary by the
signature of a duly authorized officer and, if executed by facsimile signature
of the Depositary, shall have been countersigned manually by such Registrar by
the signature of a duly authorized officer.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED
STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE
COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS
EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES
OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK
AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE
DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT,
AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST
OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY
SHARES.
The Company will furnish to any holder of this Receipt without charge,
upon request addressed to its executive office, a full statement of the
designation, relative rights, preferences and limitations of the shares of each
authorized class, and of each class of preferred stock authorized to be issued,
so far as the same may have been fixed, and a statement of the authority of the
Board of Directors of the Company to designate and fix the relative rights,
preferences and limitations of other classes.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.
Dated: ________________, 1999
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Depositary and Registrar
By: ____________________________________
Authorized Officer
Further Conditions and Agreements Forming Part of this Receipt Appear on the
Reverse Side.
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<PAGE> 30
[REVERSE
OF DEPOSITARY RECEIPT]
1. The Deposit Agreement. Depositary Receipts (the "Receipts"),
of which this Receipt is one, are made available upon the terms and conditions
set forth in the Deposit Agreement, dated as of May ___, 1999 (the "Deposit
Agreement"), among the Company, the Depositary and all holders from time to time
of Receipts. The Deposit Agreement (copies of which are on file at the Corporate
Office and at the office of any agent of the Depositary) sets forth the rights
of holders of Receipts and the rights and duties of the Depositary. The
statements made on the face and the reverse of this Receipt are summaries of
certain provisions of the Deposit Agreement and are subject to the detailed
provisions thereof, to which reference is hereby made. In the event of any
conflict between the provisions of this Receipt and the provisions of the
Deposit Agreement, the provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
3. Withdrawal of Stock Not Permitted. Holders of Receipts are not
entitled to receive any of the shares of Stock represented by such Receipts.
4. Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7
and 8 below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Corporate Office or at such
other offices as the Depositary may designate, properly endorsed or accompanied
by a properly executed instrument of transfer, and upon such transfer the
Depositary shall sign and deliver a Receipt or Receipts to or upon the order of
the person entitled thereto, all as provided in and subject to the Deposit
Agreement. This Receipt may be split into other Receipts or combined with other
Receipts into one Receipt evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered; provided, however, that
the Depositary shall not issue any Receipt evidencing a fractional Depositary
Share.
5. Conversion Rights. This Receipt may be surrendered with
written instructions to the Depositary to instruct the Company to cause the
conversion of any specified number of whole or fractional shares of Stock
represented by the Depositary Shares evidenced thereby into whole shares of
Common Stock at the conversion rate then in effect for the Stock (and,
therefore, for the Depositary Shares) specified in the Certificate of
Designation, as such conversion rate may be adjusted by the Company from time to
time as provided in the Certificate of Designation. Subject to the terms and
conditions of the Deposit Agreement and the Certificate of Designation, a holder
of a Receipt or Receipts evidencing Depositary Shares representing whole or
fractional shares of Stock may surrender such Receipt or Receipts at the
Corporate Office, or to such office as the Depositary may designate for such
purpose, or to such Depositary's Agents as the Depositary may designate for such
purpose, together with a notice of conversion duly completed and executed,
thereby directing the Depositary to instruct the Company to cause the conversion
of the number of shares or fractions thereof of underlying Stock specified in
such notice of conversion into shares of Common Stock, and an assignment of such
Receipt or Receipts to the Company, to any transfer agent for the Depositary
Shares or in blank duly completed and executed. To the extent that a holder
delivers to the Depositary for conversion a Receipt or Receipts which in the
aggregate are convertible into less than one whole share of Common
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<PAGE> 31
Stock, the holder shall receive payment in lieu of such fractional share of
Common Stock as provided in the Certificate of Designation.
Upon receipt by the Depositary of a Receipt or Receipts, together with
notice of conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of shares or
fractions thereof of Stock and an assignment of such Receipt or Receipts to the
Company, to any transfer agent for the Depositary Shares or in blank, duly
completed and executed, the Depositary shall instruct the Company (i) to cause
the conversion of the Depositary Shares evidenced by the Receipts so surrendered
for conversion as specified in the written notice to the Depositary and (ii) to
cause the delivery to the holders of such Receipts of a certificate or
certificates evidencing the number of whole shares of Common Stock, and the
amount of money, if any, to be delivered to the holders of Receipts surrendered
for conversion in payment of any accrued and unpaid dividends with respect to
such Depositary Shares and in lieu of fractional shares of Common Stock
otherwise issuable. The Company shall as promptly as practicable after receipt
thereof cause the delivery of (i) a certificate or certificates evidencing the
number of whole shares of Common Stock into which the Stock represented by the
Depositary Shares evidenced by such Receipt or Receipts has been converted, and
(ii) any money or other property to which the holder is entitled. Upon such
conversion, the Depositary (i) shall deliver to the holder a Receipt evidencing
the number of Depositary Shares, if any, which such holder has elected not to
convert and evidencing the number of Depositary Shares, if any, in excess of the
number of Depositary Shares representing Stock which has been so converted, (ii)
shall cancel the Depositary Shares evidenced by Receipts surrendered for
conversion and (iii) shall deliver to the Company or its transfer agent for the
Stock for cancellation the shares of Stock represented by the Depositary Shares
evidenced by the Receipts so surrendered and so converted.
The holder of Depositary Shares on any dividend payment record date
established by the Depositary shall be entitled to receive the dividend payable
with respect to such Depositary Shares on the corresponding dividend payment
date notwithstanding the subsequent conversion of the shares of Stock to which
such Depositary Shares relate. If a share of Stock is converted between the
record date with respect to any dividend payment on the Stock and the next
succeeding dividend payment date, any holder of Receipts surrendered with
instructions to the Depositary for conversion of the underlying Stock shall pay
to the Depositary an amount equal to the dividend payable on such dividend
payment date on the Depositary Shares represented by the Receipts being
surrendered for conversion. Any holder of Receipts on a dividend payment record
date who (or whose transferee) surrenders the Receipts with instructions to the
Depositary for conversion of the underlying Stock on the corresponding dividend
payment date will receive the dividend payable with respect to the Depositary
Shares underlying such Receipts and will not be required to include payment of
the amount of such dividend upon surrender of the Receipts for conversion.
Upon the conversion of any shares of Stock for which a request for
conversion has been made by the holder of Depositary Shares representing such
shares, all dividends in respect of such Depositary Shares shall cease to
accrue, such Depositary Shares shall be deemed no longer outstanding, all rights
of the holder of the Receipt with respect to such Depositary Shares (except the
right to receive the Common Stock, any cash payable with respect to any
fractional shares of Common Stock as provided herein, any cash payable on
account of accrued dividends with respect to such Depositary Shares, and any
Receipts evidencing Depositary Shares not so
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<PAGE> 32
converted) shall terminate, and the Receipt evidencing such Depositary Shares
shall be cancelled.
6. Conditions to Signing and Delivery, Transfer, etc., of
Receipts. Prior to the execution and delivery, registration of transfer,
split-up, combination or surrender of this Receipt, the delivery of any
distribution hereon or deposit of Stock, the Depositary, any of the Depositary's
Agents or the Company may require any or all of the following: (i) payment to it
of a sum sufficient for the payment (or, in the event that the Depositary or the
Company shall have made such payment, the reimbursement to it) of any tax or
other governmental charge with respect thereto (including any such tax or charge
with respect to Stock being deposited or withdrawn); (ii) production of proof
satisfactory to it as to the identity and genuineness of any signature; and
(iii) compliance with such reasonable regulations, if any, as the Depositary or
the Company may establish not inconsistent with the Deposit Agreement. Any
person presenting Stock for deposit, or any holder of this Receipt, may be
required to file such proof of information, to execute such certificates and to
make such representations and warranties as the Depositary or the Company may
reasonably deem necessary or proper. The Depositary or the Company may withhold
or delay the delivery of this Receipt, the registration of transfer of this
Receipt, the withdrawal of the Stock represented by the Depositary Shares
evidenced by this Receipt or the distribution of any dividend or other
distribution until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.
7. Suspension of Delivery, Transfer, etc. The registration of
transfer, split-up, combination or surrender of this Receipt may be suspended
(i) during any period when the register of stockholders of the Company is
closed, (ii) if any such action is deemed necessary or advisable by the
Depositary, any of the Depositary's Agents or the Company at any time or from
time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of the Deposit
Agreement, or (iii) with the approval of the Company, for any other reason.
8. Payment of Taxes or Other Governmental Charges. If any tax or
other governmental charge shall become payable by or on behalf of the Depositary
with respect to (i) this Receipt, (ii) the Depositary Shares evidenced by this
Receipt, (iii) the Stock (or fractional interest therein) or other property
represented by such Depositary Shares, or (iv) any transaction referred to in
Section 4.6 of the Deposit Agreement, such tax (including transfer, issuance or
acquisition taxes, if any) or governmental charge shall be payable by the holder
of this Receipt, who shall pay the amount thereof to the Depositary. Until such
payment is made, registration or transfer of this Receipt or any split-up or
combination hereof or any withdrawal of the Stock or money or other property, if
any, represented by the Depositary Shares evidenced by this Receipt may be
refused, any dividend or other distribution may be withheld and any part or all
of the Stock or other property represented by the Depositary Shares evidenced by
this Receipt may be sold for the account of the holder hereof (after attempting
by reasonable means to notify such holder prior to such sale). Any dividend or
other distribution so withheld and the proceeds of any such sale may be applied
to any payment of such tax or other governmental charge, the holder of this
Receipt remaining liable for any deficiency.
9. Amendment. The form of the Receipts and any provision of the
Deposit Agreement may at any time and from time to time be amended by agreement
between the
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<PAGE> 33
Company and the Depositary in any respect that they may deem necessary or
desirable; provided, however, that no such amendment that shall materially and
adversely alter the rights of the holders of Receipt shall be effective as to
outstanding Receipts until the expiration of 90 days after notice of such
amendment shall have been given to the record holders of outstanding Receipts
and unless such amendment shall have been approved by the holders of at least a
majority of the Depositary Shares outstanding. In no event shall any amendment
impair the right, subject to the provisions of Paragraphs 3, 6, 7, and 8 hereof
and of Sections 2.3, 2.5 and 2.6 and Article III of the Deposit Agreement, of
the owner of the Depositary Shares evidenced by this Receipt to surrender this
Receipt with instructions to the Depositary to deliver to the holder the Stock
and all money and other property, if any, represented thereby, except in order
to comply with mandatory provisions of applicable law.
10. Fees, Charges and Expenses. The Company will pay all fees,
charges and expenses of the Depositary, except for taxes (including transfer
taxes, if any) and other governmental charges and such charges as are expressly
provided in the Deposit Agreement to be at the expense of persons depositing
Stock, holders of Receipts or other persons.
11. Title to Receipts. It is a condition of this Receipt, and
every successive holder hereof by accepting or holding the same consents and
agrees, that title to this Receipt (and to the Depositary Shares evidenced
hereby), when properly endorsed or accompanied by a properly executed instrument
of transfer, is transferable by delivery with the same effect as in the case of
investment securities in general; provided, however, that the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the absolute owner hereof for the purpose of determining the person
entitled to distribution of dividends or other distributions or to any notice
provided for in the Deposit Agreement and for all other purposes.
12. Dividends and Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to the provisions of the Deposit Agreement, distribute
to record holders of Receipts such amounts of such sums as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required by law to withhold and does
withhold from any cash dividend or other cash distribution in respect of the
Stock an amount on account of taxes, the amount made available for distribution
or distributed in respect of Depositary Shares shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case may
be, only such amount, however, as can be distributed without attributing to any
owner of Depositary Shares a fraction of one cent and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to record holders of Receipts then
outstanding.
13. Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose name
Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the Deposit
Agreement, be made available by the Depositary to the record holders of Receipts
in such manner as the Company shall instruct.
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<PAGE> 34
14. Notice of Dividends, Fixing of Record Date. Whenever (i) any
cash dividend or other cash distribution shall become payable, or any
distribution other than cash shall be made, or any rights, preferences or
privileges shall at any time be offered, with respect to the Stock, or (ii) the
Depositary shall receive notice of any meeting at which holders of Stock are
entitled to vote or of which holders of Stock are entitled to notice, the
Depositary shall in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with respect to the Stock) for
the determination of the holders of Receipts (x) who shall be entitled to
receive such dividend, distribution, rights, preferences or privileges or the
net proceeds of the sale thereof, or (y) who shall be entitled to give
instructions for the exercise of voting rights at any such meeting or to receive
notice of such meeting.
15. Voting Rights. Upon receipt of notice of any meeting at which
the holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice, which
shall contain (i) such information as is contained in such notice of meeting,
(ii) a statement that the holders of Receipts at the close of business on a
specified record date determined as provided in Paragraph 14 will be entitled,
subject to any applicable provision of law, the Certificate of Incorporation or
the Certificate of Designation, to instruct the Depositary as to the exercise of
the voting rights pertaining to the Stock represented by their respective
Depositary Shares, and (iii) a brief statement as to the manner in which such
instructions may be given. Upon the written request of a holder of this Receipt
on such record date, the Depositary shall endeavor insofar as practicable to
vote or cause to be voted the Stock represented by the Depositary Shares
evidenced by this Receipt in accordance with the instructions set forth in such
request. The Company hereby agrees to take all reasonable action that may be
deemed necessary by the Depositary in order to enable the Depositary to vote
such Stock or cause such Stock to be voted. In the absence of specific
instructions from the holder of this Receipt, the Depositary will abstain from
voting to the extent of the Stock represented by the Depositary Shares evidenced
by this Receipt.
16. Reports, Inspection of Transfer Books. The Depositary will
transmit to the holders of Receipts copies of all notices and reports (including
all financial statements) received from the Company that are received by the
Depositary as the holder of Stock. The Depositary, acting as transfer agent and
Registrar, shall keep books at the Corporate Office for the registration and
transfer of Receipts, which books at all reasonable times will be open for
inspection by the record holders of Receipts; provided that any such holder
requesting to exercise such right shall certify to the Depositary that such
inspection shall be for a proper purpose reasonably related to such person's
interest as an owner of Depositary Shares.
17. Liability of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor
the Registrar nor the Company shall incur any liability to any holder of this
Receipt, if by reason of any provision of any present or future law or
regulation thereunder of the United States of America or of any other
governmental authority or, in the case of the Depositary, the Registrar or any
Depositary's Agent, by reason of any provision present or future, of the
Certificate of Incorporation or the Certificate of Designation or, in the case
of the Company, the Depositary, the Registrar or any Depositary's Agent, by
reason of any act of God or war or other circumstances beyond the control of the
relevant party, the Depositary, any Depositary's Agent, the Registrar or the
Company shall be prevented or forbidden from doing or performing any act or
thing that the terms of the Deposit Agreement provide shall be done or
performed; nor shall the Depositary,
-7-
<PAGE> 35
any Depositary's Agent, the Registrar or the Company incur any liability to any
holder of this Receipt (i) by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of the Deposit
Agreement provide shall or may be done or performed or (ii) by reason of any
exercise of, or failure to exercise, any discretion provided for in the Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or the
Registrar, if such exercise or failure to exercise discretion is caused by its
gross negligence or willful misconduct.
18. Obligations of the Depositary, the Depositary's Agent, the
Registrar and the Company. The Company assumes no obligation and shall be
subject to no liability under the Deposit Agreement or this Receipt to the
holder hereof or other persons, except to perform in good faith such obligations
as are specifically set forth and undertaken by it to perform in the Deposit
Agreement. Each of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject to no liability under the Deposit
Agreement or this Receipt to the holder hereof or other persons, except to
perform such obligations as are specifically set forth and undertaken by it to
perform in the Deposit Agreement without gross negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor
the Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to Stock, Depositary Shares or
Receipts or Common Stock that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor
the Company will be liable for any action or failure to act by it in reliance
upon the advice of or information from legal counsel, accountants, any person
presenting Stock for deposit, any holder of this Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
19. Termination of Deposit Agreement. The Deposit Agreement may be
terminated by the Company or the Depositary upon or after the occurrence of any
of the following events: (i) there shall have been made a final distribution in
respect of the Stock in connection with any liquidation, dissolution or winding
up of the Company and such distribution shall have been distributed to the
holders of Receipts; or (ii) each share of Stock shall have been converted into
shares of Common Stock. Upon the termination of the Deposit Agreement, the
Company shall be discharged from all obligations thereunder except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 5.7 and 5.8 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination of the
Deposit Agreement, the Depositary thereafter shall discontinue all functions and
be discharged from all obligations as provided in the Deposit Agreement, except
as specifically provided therein.
20. Governing Law. The Deposit Agreement and this Receipt and all
rights thereunder and hereunder and provisions thereof and hereof shall be
governed by, and construed in accordance with, the law of the State of New York
without giving effect to principles of conflict of laws.
-8-
<PAGE> 36
-----------------------------------
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________ the within Receipt and all rights and interests
represented by the Depositary Shares evidenced thereby, and hereby irrevocably
constitutes and appoints ______________________ his attorney, to transfer the
same on the books of the within-named Depositary, with full power of
substitution in the premises.
Dated: Signature:
------------------------- ----------------------------------
NOTE: The signature to this
assignment must correspond with
the name as written upon the face
of the Receipt in every
particular, without alteration or
enlargement, or any change
whatever.
-9-
<PAGE> 1
EXHIBIT 99.8
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
NUMBER [APACHE CORPORATION LOGO] SHARES
---------- ----------
AUTOMATICALLY CONVERTIBLE EQUITY SECURITIES,
CONVERSION PREFERRED STOCK, SERIES C
CUSIP 037411 70 9
See reverse for certain definitions
This Certifies That__________________________________________________________
_____________________________________________________________________________
is the owner of _____________________________________________________________
fully paid and non-assessable shares of the Automatically Convertible Equity
Securities, Conversion Preferred Stock, Series C, no par value per share, of
Apache Corporation, transferable only on the books of the corporation by the
holder hereof in person or by attorney upon surrender of this certificate
properly endorsed.
A statement of the relative rights, preferences and restrictions of the shares
of stock which the corporation is authorized to issue will be furnished without
charge to each stockholder upon request therefor.
IN WITNESS WHEREOF, the said corporation has caused this certificate to be
signed by its duly authorized officers and to be sealed with the seal of the
corporation.
Dated
-----------------
[Apache Corporation Seal]
- --------------------------- ------------------------------------
Cheri L. Peper, Secretary Z. S. Kobiashvili, Vice President
Countersigned:
NORWEST BANK MINNESOTA, N.A.
South St. Paul, Minnesota
Transfer Agent and Registrar
By:
--------------------------------
Authorized Signature
<PAGE> 2
APACHE CORPORATION
The Corporation will mail to the holder of the shares of Automatically
Convertible Equity Securities, Conversion Preferred Stock, Series C ("Preferred
Stock") represented by this Certificate, without charge within five days after
receipt of written request therefor, a copy of the express terms of the shares
represented by this Certificate and of the other classes and series of shares
which the Corporation is authorized to issue.
The shares represented by this Certificate are convertible into Common Stock in
accordance with the express terms of the Preferred Stock at any time prior to
May ___, 2002, the date fixed for mandatory redemption at the rate of, subject
to adjustment, _____ shares of Common Stock for one share of Preferred Stock so
converted.
The shares represented hereby may be converted by (1) endorsing this Certificate
for transfer to the Corporation, (2) executing the form set forth below, and (3)
surrendering this Certificate to the transfer agent.
NOTICE OF ELECTION TO CONVERT
The undersigned hereby irrevocably exercises the right to convert shares of the
Automatically Convertible Equity Securities, Conversion Preferred Stock, Series
C represented by this Certificate into Common Stock of Apache Corporation in
accordance with the terms of the Automatically Convertible Equity Securities,
Conversion Preferred Stock, Series C relating thereto.
Dated: Signature
------------------------------ -----------------------------
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM --- as tenants in common UNIF TRF MIN ACT --- Custodian
------- -------
(Cust) (minor)
TEN ENT --- as tenants by the entireties Under Uniform Transfers to Minors
JT TEN --- as joint tenants with right of Act
survivorship and not as tenants ----------------------------
in common (State)
Additional abbreviations may also be used though not in the above list
For value received, ____________ hereby sell, assign and transfer unto
</TABLE>
Please insert Social Security or Other
Identifying Number of Assignee
- ------------------------------------
- ------------------------------------
Please Print or Typewrite Name and Address
Including Postal Zip Code of Assignee
_______________________________________________________________________________
_______________________________________________________________________________
____________________________________________________Shares of the capital stock
represented by the within Certificate, and do hereby irrevocably constitute and
appoint _________________________________Attorney to transfer the said stock on
the books of the within-named Corporation with full power of substitution in the
premises.
Dated:
-------------------------
----------------------------------------
NOTICE: THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE FACE OF
THE CERTIFICATE IN EVERY ---------------------------------------
PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
-----------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
ELIGIBLE GUARANTOR INSTITUTION, (Banks,
Stockbrokers, Savings And Loan
Associations And Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17 AD-15.
-----------------------------------------
<PAGE> 1
EXHIBIT 99.9
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS
OF
AUTOMATICALLY CONVERTIBLE EQUITY SECURITIES,
CONVERSION PREFERRED STOCK, SERIES C
OF
APACHE CORPORATION
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Apache Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), in accordance with
the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in accordance
with the provisions of the Restated Certificate of Incorporation, as amended, of
the Corporation, which authorizes the issuance by the Corporation of up to five
million (5,000,000) shares of no par value preferred stock, which authority was
delegated by the Board of Directors to a committee of the Board of Directors
(the "Committee") pursuant to resolutions adopted on April 2, 1999 and April 26,
1999, the Committee by unanimous written consent dated May ___, 1999, adopted
the following resolution creating and providing for the issuance of a series of
preferred stock of the Corporation:
RESOLVED: That, pursuant to the authority delegated by the Board of
Directors of the Corporation, the Committee hereby creates a series of
preferred stock of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights, preferences and
limitations thereof (in addition to the provisions set forth in the
Restated Certificate of Incorporation of the Corporation, which are
applicable to all series of the Corporation's preferred stock) as
follows:
AUTOMATICALLY CONVERTIBLE EQUITY SECURITIES,
CONVERSION PREFERRED STOCK, SERIES C
1. Number of Shares and Designation. [ONE HUNDRED FIFTEEN] thousand
[(115,000)] shares of the five million (5,000,000) authorized shares of no par
value preferred stock of the Corporation are hereby constituted as a series of
preferred stock, no par value per share, designated as "Automatically
Convertible Equity Securities, Conversion Preferred Stock, Series C"
(hereinafter called the "Series C Preferred Stock"). The Board of Directors may
increase or decrease the number of shares of the series, but may not decrease
the number of shares below the number of shares then outstanding.
<PAGE> 2
2. Ranking. The Series C Preferred Stock shall rank prior and superior
to all of the common stock, $1.25 par value per share, of the Corporation (the
"Common Stock") now or hereafter outstanding, and prior and superior to the
Series A Junior Participating Preferred Stock of the Corporation (the "Series A
Preferred Stock") as to payment of dividends and distribution of assets upon
dissolution, liquidation or winding up of the Corporation. The Series C
Preferred Stock shall rank equal to the Corporation's 5.68% Cumulative Preferred
Stock, Series B (the "Series B Preferred Stock"), as to payment of dividends and
distribution of assets upon dissolution, liquidation or winding up of the
Corporation.
3. Dividends.
(i) General. Cumulative cash dividends shall be payable on each share
of Series C Preferred Stock when, as and if declared by the Board of Directors
of the Corporation or a duly authorized committee thereof, out of the assets of
the Corporation legally available therefor.
Dividends on the Series C Preferred Stock shall be payable quarterly,
when, as and if declared by the Board of Directors of the Corporation or a duly
authorized committee thereof on the last business day of January, April, July
and October of each year (each such date being referred to herein as a "Dividend
Payment Date") at the annual rate of $________ per share. The initial dividend
on the Series C Preferred Stock for the dividend period commencing on May ___,
1999, to but excluding July 30, 1999, will be $_________ per share, and shall be
payable on July 30, 1999. The amount of dividends payable on each share of
Series C Preferred Stock for each full quarterly period thereafter shall be
computed by dividing the annual dividend rate by four. The amount of dividends
payable for any other period that is shorter or longer than a full quarterly
dividend period will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
A dividend period with respect to a Dividend Payment Date is the period
commencing on the preceding Dividend Payment Date or, if none, the date of issue
and ending on the day immediately prior to the next Dividend Payment Date.
Dividends payable, if declared, on a Dividend Payment Date shall be payable to
holders of record as they appear on the stock books of the Corporation on the
record date, which shall be the fifteenth day of the calendar month in which the
applicable Dividend Payment Date falls (each, a "Dividend Record Date").
Dividends on the Series C Preferred Stock shall be cumulative if the
Corporation fails to declare one or more dividends on the Series C Preferred
Stock in any amount, whether or not the earnings or financial condition of the
Corporation were sufficient to pay such dividends in whole or in part.
Holders of shares of Series C Preferred Stock shall not be entitled to
any dividend, whether payable in cash, property or stock, in excess of full
dividends (including accrued dividends, if any) on shares of Series C Preferred
Stock. No interest or sum of money in lieu of interest shall be payable in
respect of any dividend or payment which may be in arrears.
Dividends in arrears on the Series C Preferred Stock payable, if
declared, but not declared for payment or paid on any Dividend Payment Date may
be declared by the Board of
2
<PAGE> 3
Directors of the Corporation or a duly authorized committee thereof and paid on
any date fixed by the Board of Directors of the Corporation or a duly authorized
committee thereof, whether or not a Dividend Payment Date, to the holders of
record of the shares of Series C Preferred Stock, as they appear on the stock
register of the Corporation on such record date, which shall be not less than
ten nor more than 30 days prior to the payment date therefor, as shall be fixed
by the Board of Directors of the Corporation or a duly authorized committee
thereof.
(ii) Payment Restrictions. The Corporation may not declare or pay any
dividend or make any distribution of assets (other than dividends paid or other
distributions made in stock of the Corporation ranking junior to the Series C
Preferred Stock as to the payment of dividends and the distribution of assets
upon liquidation, dissolution or winding up) on, or redeem, purchase or
otherwise acquire (except upon conversion or exchange for stock of the
Corporation ranking junior to the Series C Preferred Stock as to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up), shares of Common Stock, of Series A Preferred Stock or of any other
stock of the Corporation ranking junior to the Series C Preferred Stock as to
the payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, unless all accrued and unpaid dividends on the Series
C Preferred Stock for all prior dividend periods have been or contemporaneously
are declared and paid and the full quarterly dividend on the Series C Preferred
Stock for the current dividend period has been or contemporaneously is declared
and set apart for payment.
Whenever all accrued dividends on the Series C Preferred Stock are not
paid in full, the Corporation may not declare or pay dividends or make any
distribution of assets (other than dividends paid or other distributions made in
stock of the Corporation ranking junior to the Series C Preferred Stock as to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up) on any other stock of the Corporation ranking on a
parity with the Series C Preferred Stock as to the payment of dividends,
including the Series B Preferred Stock, unless (a) all accrued and unpaid
dividends on the Series C Preferred Stock for all prior dividend periods are
contemporaneously declared and paid or (b) all dividends declared and paid or
set apart for payment or other distributions made on the Series C Preferred
Stock and any other stock of the Corporation ranking on a parity with the Series
C Preferred Stock as to the payment of dividends, including the Series B
Preferred Stock, are declared and paid or set apart for payment or made pro rata
so that the amount of dividends declared and paid or set apart for payment or
other distributions made per share on the Series C Preferred Stock and such
other stock of the Corporation will bear the same ratio that accrued and unpaid
dividends per share on the Series C Preferred Stock and such other stock of the
Corporation bear to each other.
Whenever all accrued dividends on the Series C Preferred Stock are not
paid in full, the Corporation may not redeem, purchase or otherwise acquire
(except upon conversion or exchange for stock of the Corporation ranking junior
to the Series C Preferred Stock as to the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up) other stock
of the Corporation ranking on a parity with the Series C Preferred Stock as to
the payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, including the Series B Preferred Stock, unless (a)
all outstanding shares of the Series C Preferred Stock are contemporaneously
redeemed or (b) a pro rata redemption is made of shares of Series C Preferred
Stock and such other stock of the Corporation, with the amount allocable to each
series of such stock determined on the basis of the aggregate liquidation
preference of the outstanding shares of each series and the shares of each
series being redeemed only on a pro rata basis.
3
<PAGE> 4
4. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of shares
of Series C Preferred Stock shall be entitled to receive out of the assets of
the Corporation available for distribution to stockholders, before any
distribution of assets is made on the Common Stock of the Corporation or any
other class or series of stock of the Corporation ranking junior to the Series C
Preferred Stock, upon liquidation, a liquidating distribution in the amount of
$______ per share, plus an amount equal to the sum of all accrued and unpaid
dividends (whether or not earned or declared) for the then-current dividend
period and all dividend periods prior thereto.
Neither the sale of all or substantially all of the property or
business of the Corporation, nor the merger, conversion or consolidation of the
Corporation into or with any other corporation, nor the merger, conversion or
consolidation of any other corporation into or with the Corporation shall
constitute a liquidation, dissolution or winding up, voluntary or involuntary,
for the purposes of the foregoing paragraph. After the payment to the holders of
the shares of Series C Preferred Stock of the full preferential amounts provided
for above, the holders of the shares of Series C Preferred Stock as such shall
have no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution
to the holders of the shares of Series C Preferred Stock upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled as provided above, no such distribution shall be made on account of any
other stock of the Corporation ranking on a parity with the Series C Preferred
Stock as to the distribution of assets upon such liquidation, dissolution or
winding up, including the Series B Preferred Stock, unless a pro rata
distribution is made on the Series C Preferred Stock and such other stock of the
Corporation, with the amount allocable to each series of such stock determined
on the basis of the aggregate liquidation preference of the outstanding shares
of each series and distributions to the shares of each series being made on a
pro rata basis.
5. Voting Rights.
(i) The holders of shares of Series C Preferred Stock shall have no
voting rights, except as set forth below or as expressly required by applicable
law. In exercising any such vote, each outstanding share of Series C Preferred
Stock shall be entitled to one vote.
(ii) If the equivalent of six quarterly dividends payable, whether
consecutively or not, on the Series C Preferred Stock or any other class or
series of preferred stock ranking on a parity with the Series C Preferred Stock
as to the payment of dividends, including the Series B Preferred Stock, has not
been paid, the number of directors of the Corporation shall be increased by two
(without duplication of any increase made pursuant to the terms of any other
series of preferred stock of the Corporation), and the holders of the Series C
Preferred Stock, voting as a single class with the holders of shares of any
other class of the preferred stock of the Corporation ranking on a parity with
the Series C Preferred Stock either as to dividends or distribution of assets
and upon which like voting rights have been conferred and are exercisable, shall
have the exclusive right to vote for and to elect such two directors at any
meeting of stockholders of the Corporation at which directors are to be elected
held during the period such dividends remain in arrears. Each class or series of
preferred stock entitled to vote for the additional directors shall
4
<PAGE> 5
have a number of votes proportionate to the aggregate liquidation preference of
its outstanding shares. Such voting right shall continue until full cumulative
dividends for all past dividend periods on all such preferred stock of the
Corporation, including any shares of the Series B Preferred Stock and the Series
C Preferred Stock, have been paid or declared and set apart for payment. Any
such elected directors shall serve until the Corporation's next annual meeting
of stockholders (notwithstanding that prior to the end of such term the right to
elect directors shall cease to exist) or until their respective successors shall
be elected and qualify.
(iii) Whenever such right shall vest, it may be exercised initially
either at a special meeting of holders of Series C Preferred Stock or at any
annual stockholders' meeting, but thereafter it shall be exercised only at
annual stockholders' meetings. Any director who shall have been elected by the
holders of Series C Preferred Stock as a class pursuant to this Section 5 may be
removed at any time, either for or without cause by, and only by, the
affirmative votes of the holders of record of a majority of the outstanding
shares of Series C Preferred Stock given at a special meeting of such
stockholders called for such purpose, and any vacancy created by such removal
may also be filled at such meeting. Any vacancy caused by the death or
resignation of a director who shall have been elected by the holders of Series C
Preferred Stock as a class pursuant to this Section 5 may be filled only by the
holders of all outstanding Series C Preferred Stock at a meeting called for such
purpose.
Any meeting of the holders of all outstanding Series C Preferred Stock
entitled to vote as a class for the election or removal of directors shall be
held at the place at which the last annual meeting of stockholders was held. At
such meeting, the presence in person or by proxy of the holders of a majority of
the outstanding shares of all outstanding Series C Preferred Stock shall be
required to constitute a quorum; in the absence of a quorum, a majority of the
holders present in person or by proxy shall have the power to adjourn the
meeting from time to time without notice, other than announcement at the
meeting, until a quorum shall be present.
(iv) So long as any Series C Preferred Stock is outstanding, the
affirmative vote or consent of the holders of at least 80% of the outstanding
shares of the Series C Preferred Stock will be required for any amendment of the
Restated Certificate of Incorporation of the Corporation (or any certificate
supplemental thereto) which will adversely affect the powers, preferences,
privileges or rights of the Series C Preferred Stock. The affirmative vote or
consent of the holders of at least 80% of the outstanding shares of the Series C
Preferred Stock and any other series of the preferred stock of the Corporation
ranking on a parity with the Series C Preferred Stock either as to dividends or
upon liquidation, voting as a single class without regard to series, will be
required to issue, authorize or increase the authorized amount of, or issue or
authorize any obligation or security convertible into or evidencing a right to
purchase, any additional class or series of stock ranking prior to the Series C
Preferred Stock as to dividends or upon dissolution, or to reclassify any
authorized stock of the Corporation into such prior shares; but such vote will
not be required for the Corporation to issue, authorize or increase the
authorized amount of, or issue or authorize any obligation or security
convertible into or evidencing a right to purchase, any stock ranking on a
parity with or junior to the Series C Preferred Stock.
The affirmative vote or consent of the holders of a majority of all the
outstanding shares of Series C Preferred Stock, voting or consenting separately
as a class, shall be required to approve any merger, conversion, consolidation
or compulsory share exchange to which the
5
<PAGE> 6
Corporation is a party, unless (a) the terms of such merger, conversion,
consolidation or compulsory share exchange do not provide for a change in the
terms of the Series C Preferred Stock and (b) the Series C Preferred Stock is on
a parity with or prior to (in respect of the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up) any other
class or series of capital stock authorized by the surviving corporation, other
than any class or series of stock of the Corporation ranking senior as to the
Series C Preferred Stock either as to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation and previously authorized with the consent of holders of Series C
Preferred Stock as described herein (or other than any capital stock into which
such prior stock is converted as a result of such merger, consolidation or
compulsory share exchange).
6. Conversion.
(i) Mandatory Conversion. Unless earlier converted at the option of the
holder in accordance with the provisions of Section 6(ii), on May ___, 2002 (the
"Mandatory Conversion Date"), each outstanding share of the Series C Preferred
Stock shall convert automatically (the "Automatic Conversion") into (a) shares
of authorized Common Stock at the Exchange Rate (as hereinafter defined) in
effect on the Mandatory Conversion Date and (b) the right to receive an amount
in cash equal to all accrued and unpaid dividends on such share of Series C
Preferred Stock to the Mandatory Conversion Date, whether or not earned or
declared, out of funds legally available therefor. The Exchange Rate is equal to
(a) if the Current Market Price is greater than or equal to $______ per share
(the "Threshold Price"), ____ shares of Common Stock (the "Upper Exchange
Rate"), (b) if the Current Market Price is less than the Threshold Price but
greater than the Initial Price, the number of shares of Common Stock having a
value (determined at the Current Market Price) equal to 50 times the Initial
Price (the "Middle Exchange Rate"), and (c) if the current Market Price is less
than or equal to the Initial Price, 50 shares of Common Stock (the "Lower
Exchange Rate") per share of Series C Preferred Stock, and is subject to
adjustment as set forth in Section 6(iii) and Section 6(iv) below. Dividends on
the shares of Series C Preferred Stock shall cease to accrue and such shares of
Series C Preferred Stock shall cease to be outstanding on the Mandatory
Conversion Date. The Corporation shall make such arrangements as it deems
appropriate for the issuance of certificates representing shares of Common
Stock, and for the payment of cash in respect of such accrued and unpaid
dividends on the Series C Preferred Stock, if any, or cash in lieu of fractional
shares of Common Stock, if any, in exchange for and contingent upon surrender of
certificates representing the shares of Series C Preferred Stock, and the
Corporation may defer the payment of dividends on such shares of Common Stock
and the voting thereof until, and make such payment and voting contingent upon,
the surrender of such certificates representing the shares of Series C Preferred
Stock, provided that the Corporation shall give the holders of the shares of
Series C Preferred Stock such notice of any such actions as the Corporation
deems appropriate and upon such surrender such holders shall be entitled to
receive such dividends declared and paid on such shares of Common Stock
subsequent to the Mandatory Conversion Date. Amounts payable in cash in respect
of the shares of Series C Preferred Stock or in respect of such shares of Common
Stock shall not bear interest.
(ii) Optional Conversion. Shares of Series C Preferred Stock are
convertible, in whole or in part, at the option of the holders thereof
("Optional Conversion"), at any time prior to the Mandatory Conversion Date,
into shares of Common Stock at a rate of __________ shares
6
<PAGE> 7
of Common Stock for each share of Series C Preferred Stock (the "Optional
Conversion Rate"), subject to adjustment as set forth in Section 6(iii) and
Section 6(iv) below.
Optional conversion of shares of Series C Preferred Stock may be
effected by delivering certificates evidencing such shares, together with
written notice of conversion and a proper assignment of such certificates to the
Corporation or in blank (and, if applicable, payment of an amount equal to the
dividend payable on such shares), to the office of the Transfer Agent for the
Series C Preferred Stock or to any other office or agency maintained by the
Corporation for that purpose and otherwise in accordance with Optional
Conversion procedures established by the Corporation. Each Optional Conversion
shall be deemed to have been effected immediately prior to the close of business
on the date on which the foregoing requirements shall have been satisfied. The
Optional Conversion shall be at the Optional Conversion Rate in effect at such
time and on such date.
Holders of shares of Series C Preferred Stock at the close of business
on a Dividend Record Date shall be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date notwithstanding the
Optional Conversion of such shares following such Dividend Record Rate and prior
to such Dividend Payment Date. However, shares of Series C Preferred Stock
surrendered for Optional Conversion after the close of business on a Dividend
Record Date and before the opening of business on the next succeeding Dividend
Payment Date must be accompanied by payment in cash of an amount equal to the
dividend payable on such shares on such Dividend Payment Date. Except as
provided above, upon any Optional Conversion of shares of Series C Preferred
Stock, the Corporation shall make no payment or allowance for unpaid preferred
dividends, whether or not in arrears, on such shares of Series C Preferred Stock
as to which Optional Conversion has been effected or for dividends or
distributions on the shares of Common Stock issued upon such Optional
Conversion.
(iii) Adjustments to the Exchange Rate and the Optional Conversion
Rate. The Exchange Rate and the Optional Conversion Rate shall each be subject
to adjustment from time to time as provided below in this Section 6(iii).
(a) If the Corporation shall pay or make a dividend or other
distribution with respect to its Common Stock in shares of Common Stock
(including by way of reclassification of any shares of its Common
Stock), the Exchange Rate and the Optional Conversion Rate in effect at
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
other distribution shall each be increased by multiplying such Exchange
Rate and Optional Conversion Rate by a fraction of which the numerator
shall be the sum of the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the
total number of shares of Common Stock constituting such dividend or
other distribution, and of which the denominator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination, such increase to become effective
immediately after the opening of business on the day following the date
fixed for such determination.
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<PAGE> 8
(b) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock,
the Exchange Rate and the Optional Conversion Rate in effect at the
opening of business on the day following the day upon which such
subdivision or split becomes effective shall each be proportionately
increased, and, conversely, in case outstanding shares of Common Stock
shall be combined into a smaller number of shares of Common Stock, the
Exchange Rate and the Optional Conversion Rate in effect at the opening
of business on the day following the day upon which such combination
becomes effective shall each be proportionately reduced, such increases
or reductions, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which
such subdivision, split or combination becomes effective.
(c) If the Corporation shall, after the date hereof, issue
rights or warrants, in each case other than the Rights, to all holders
of its Common Stock entitling them (for a period not exceeding 45 days
from the date of such issuance) to subscribe for or purchase shares of
Common Stock at a price per share less than the Fair Market Value of
the Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants, then in each
case the Exchange Rate and the Optional Conversion Rate shall each be
adjusted by multiplying the Exchange Rate and the Optional Conversion
Rate in effect on such record date by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date
of issuance of such rights or warrants, immediately prior to such
issuance, plus the number of additional shares of Common Stock offered
for subscription or purchase pursuant to such rights or warrants, and
of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares
of Common Stock so offered for subscription or purchase pursuant to
such rights or warrants would purchase at such Fair Market Value
(determined by multiplying such total number of shares by the exercise
price of such rights or warrants and dividing the product so obtained
by such Fair Market Value). Shares of Common Stock owned by the
Corporation or by another company of which a majority of the shares
entitled to vote in the election of directors are held, directly or
indirectly, by the Corporation shall not be deemed to be outstanding
for purposes of such computation. Such adjustment shall become
effective at the opening of business on the business day next following
the record date for the determination of stockholders entitled to
receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or
warrants, the Exchange Rate and the Optional Conversion Rate shall each
be readjusted to the Exchange Rate and the Optional Conversion Rate
which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made upon the basis of the
issuance of rights or warrants in respect of only the number of shares
of Common Stock actually delivered.
(d) If the Corporation shall pay a dividend or make a
distribution to all holders of its Common Stock consisting of evidences
of its indebtedness, securities, cash or other assets (including shares
of capital stock of the Corporation other than Common Stock but
excluding any cash dividends or distributions and any dividends or
other
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<PAGE> 9
distributions referred to in clauses (a) and (b) above), or shall issue
to all holders of its Common Stock rights or warrants to subscribe for
or purchase any of its securities (other than those referred to in
clause (c) above), then in each such case the Exchange Rate and the
Optional Conversion Rate shall each be adjusted by multiplying the
Exchange Rate and the Optional Conversion Rate in effect on the record
date for such dividend or distribution or for the determination of
stockholders entitled to receive such rights or warrants, as the case
may be, by a fraction of which the numerator shall be the Fair Market
Value per share of the Common Stock on such record date), and of which
the denominator shall be such Fair Market Price per share of Common
Stock less the Fair Market Value (as determined by the Board of
Directors, whose determination shall be conclusive) as of such record
date of the portion of the evidences of indebtedness or assets so
distributed, or of such subscription rights or warrants, applicable to
one share of Common Stock. Such adjustment shall become effective on
the opening of business on the business day next following the record
date for such dividend or distribution or for the determination of
stockholders entitled to receive such rights or warrants, as the case
may be.
(e) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed in a transaction to which Section 6(iv) applies or
as part of a distribution referred to in Section 6(iii)(d)) in an
aggregate amount that, combined together with (1) the aggregate amount
of any other distributions to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of payment
of such distribution and in respect of which no adjustment pursuant to
this Section 6(iii)(e) or Section 6(iii)(f) has been made and (2) the
aggregate of any cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of any non-cash
consideration payable in respect of any tender or exchange offer by the
Corporation or any of its subsidiaries for all or any portion of the
Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment
pursuant to this Section 6(iii)(e) or Section 6(iii)(f) has been made,
exceeds 12.5% of the product of the Current Market Price per share of
the Common Stock on the date for the determination of holders of shares
of Common Stock entitled to receive such distribution times the number
of shares of Common Stock outstanding on such date, then, and in each
such case, immediately after the close of business on such date for
determination, each of the Exchange Rate and the Optional Conversion
Rate shall be increased so that the Exchange Rate and the Optional
Conversion Rate shall equal the rate determined by dividing the
Exchange Rate and the Optional Conversion Rate, respectively, in effect
immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution
by a fraction (1) the numerator of which shall be equal to the Current
Market Price per share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the excess of
such combined amount over such 12.5% and (y) the number of shares of
Common Stock outstanding on such date for determination and (2) the
denominator of which shall be equal to the Current Market Price per
share of the Common Stock on such date for determination.
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<PAGE> 10
(f) In case a tender or exchange offer made by the Corporation
or any subsidiary of the Corporation for all or any portion of the
Common Stock shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to stockholders
of an aggregate consideration having a fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) that combined
together with (1) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors), as
of the expiration of the applicable tender or exchange offer, of any
non-cash consideration payable in respect of any other tender or
exchange offer, by the Corporation or any subsidiary of the Corporation
for all or any portion of the Common Stock expiring within the 12
months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to Section 6(iii)(e) or this
Section 6(iii)(f) has been made and (2) the aggregate amount of any
distributions to all holders of the Corporation's Common Stock made
exclusively in cash within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment
pursuant to Section 6(iii)(e) or this Section 6(iii)(f) has been made,
exceeds 12.5% of the product of the Current Market Price per share of
the Common Stock as of the last time (the "Expiration Time") tenders
could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Exchange Rate and the
Optional Conversion Rate shall be adjusted so that the Exchange Rate
and the Optional Conversion Rate shall equal the rate determined by
dividing the Exchange Rate and the Optional Conversion Rate,
respectively, immediately prior to the close of business on the date of
the Expiration Time by a fraction (1) the numerator of which shall be
equal to (x) the product of (i) the Current Market Price per share of
the Common Stock on the date of the Expiration Time and (ii) the number
of shares of Common Stock outstanding (including any tendered shares)
on the Expiration Time less (y) the amount of cash plus the fair market
value (determined as aforesaid) of the aggregate non-cash consideration
payable to stockholders pursuant to such tender or exchange offer, and
(2) the denominator of which shall be equal to the product of (x) the
Current Market Price per share of the Common Stock as of the Expiration
Time and (y) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the
number of all shares accepted for payment pursuant to such tender or
exchange offer.
(g) Any shares of Common Stock issuable in payment of a
dividend or other distribution shall be deemed to have been issued
immediately prior to the close of business on the record date for such
dividend or other distribution for purposes of calculating the number
of outstanding shares of Common Stock under Section 6(iii)(b) above.
(h) Anything in this Section 6 notwithstanding, the
Corporation shall be entitled to make such upward adjustments in the
Exchange Rate and the Optional Conversion Rate, in addition to those
required by this Section 6, as the Corporation in its sole discretion
shall determine to be advisable.
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(i) In any case in which this Section 6(iii) shall require
that an adjustment as a result of any event become effective at the
opening of business on the business day next following a record date
and the date fixed for conversion pursuant to Section 6(i) occurs after
such record date, but before the occurrence of such event, the
Corporation may in its sole discretion elect to defer the following
until after the occurrence of such event: (1) issuing to the holder of
any shares of Series C Preferred Stock surrendered for conversion the
additional shares of Common Stock issuable upon such conversion over
the shares of Common Stock issuable before giving effect to such
adjustment; and (2) paying to such holder any amount in cash in lieu of
a fractional share of Common Stock pursuant to Section 6(vii).
(j) For purposes hereof, an "adjustment in the Exchange Rate"
means, and shall be implemented by, an adjustment of the nature and
amount specified, effected in the manner specified, in each of the
Upper Exchange Rate, the Middle Exchange Rate and the Lower Exchange
Rate. If an adjustment is made to the Exchange Rate pursuant to this
Section 6(iii), an adjustment shall also be made to the Current Market
Price solely to determine which of clauses (a), (b) or (c) of the
definition of Exchange Rate in Section 6(i) will apply on the Mandatory
Conversion Date. Such adjustment shall be made by multiplying the
Current Market Price by a fraction of which the numerator shall be the
Exchange Rate immediately after such adjustment pursuant to Section
6(iii) and the denominator shall be the Exchange Rate immediately
before such adjustment. All adjustments to the Exchange Rate and the
Optional Conversion Rate shall be calculated to the nearest 1/10,000th
of a share of Common Stock. No adjustment in the Exchange Rate or in
the Optional Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent in the
Lower Exchange Rate; provided, however, any adjustments which by reason
of this subparagraph are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
adjustments to the Exchange Rate and the Optional Conversion Rate shall
be made successively.
(k) Before taking any action that would cause an adjustment
increasing the Exchange Rate or the Optional Conversion Rate such that
the conversion price (for purposes of this Section 6(iii), an amount
equal to the liquidation value per share of Series C Preferred Stock
divided by the Optional Conversion Rate, respectively, as in effect
from time to time) would be below the then par value of the Common
Stock, the Corporation will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of Common
Stock at the Optional Conversion Rate as so adjusted.
(iv) Adjustment for Certain Consolidations or Mergers. In case of any
consolidation or merger to which the Corporation is a party (other than a merger
or consolidation in which the Corporation is the continuing corporation and in
which the Common Stock outstanding immediately prior to the merger or
consolidation remains unchanged), or in case of any sale or transfer to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety, or in case of any statutory exchange of securities with another
corporation (other than in connection with a merger or acquisition), proper
provision shall be made so that each share of the Series C Preferred Stock
shall, after consummation of such transaction, be subject to
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<PAGE> 12
(a) conversion at the option of the holder into the kind and amount of
securities, cash or other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock into which such
share of the Series C Preferred Stock might have been converted immediately
prior to consummation of such transaction, and (b) conversion on the Mandatory
Conversion Date into the kind and amount of securities, cash or other property
receivable upon consummation of such transaction by a holder of the number of
shares of Common Stock into which such share of the Series C Preferred Stock
would have been converted if the conversion on the Mandatory Conversion Date had
occurred immediately prior to the date of consummation of such transaction,
assuming in each case that such holder of Common Stock failed to exercise rights
of election, if any, as to the kind or amount of securities, cash or other
property receivable upon consummation of such transaction (provided that if the
kind or amount of securities, cash or other property receivable upon
consummation of such transaction is not the same for each nonelecting share,
then the kind and amount of securities, cash or other property receivable upon
consummation of such transaction for each nonelecting share shall be deemed to
be the kind and amount so receivable per share by a plurality of the nonelecting
shares). The kind and amount of securities into which the shares of the Series C
Preferred Stock shall be convertible after consummation of such transaction
shall be subject to adjustment as described in Section 6(iii) following the date
of consummation of such transaction. The Corporation may not become a party to
any such transaction unless the terms thereof are consistent with the foregoing.
(v) Notice of Adjustments. Whenever the Exchange Rate and Optional
Conversion Rate are adjusted as provided in Section 6(iii), the Corporation
shall:
(a) Forthwith compute the adjusted Exchange Rate and Optional
Conversion Rate and prepare a certificate signed by the Chief Financial
Officer, any Vice President, the Treasurer and the Controller of the
Corporation setting forth the adjusted Exchange Rate and Optional
Conversion Rate, the method of calculation thereof in reasonable detail
and the facts requiring such adjustment and upon which such adjustment
is based, which certificate shall be prima facie evidence of the
correctness of the adjustment, and file such certificate forthwith with
the Transfer Agent;
(b) Make a prompt public announcement stating that the
Exchange Rate and Optional Conversion Rate have been adjusted and
setting forth the adjusted Exchange Rate and Optional Conversion Rate;
and
(c) Promptly mail a notice stating that the Exchange Rate and
Optional Conversion Rate have been adjusted, the facts requiring such
adjustment and upon which such adjustment is based and setting forth
the adjusted Exchange Rate and Optional Conversion Rate, to the holders
of record of the outstanding shares of the Series C Preferred Stock at
or prior to the time the Corporation mails an interim statement to its
stockholders covering the fiscal quarter period during which the facts
requiring such adjustment occurred but in any event within 45 days of
the end of such fiscal quarter period.
(vi) Notices of Proposed Actions. In case, at any time while any of the
shares of Series C Preferred Stock are outstanding,
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<PAGE> 13
(a) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock (other than in cash out of profits or
surplus and other than the Rights), or
(b) the Corporation shall authorize the issuance to all
holders of the Common Stock of rights or warrants (other than the
Rights) to subscribe for or purchase shares of the Common Stock or of
any other subscription rights or warrants, or
(c) of any reclassification of the Common Stock (other than a
subdivision or combination thereof) or of any consolidation or merger
to which the Corporation is a party and for which approval of any
stockholders of the Corporation is required (except for a merger of the
Corporation into one of its subsidiaries solely for the purpose of
changing the corporate domicile of the Corporation to another state of
the United States and in connection with which there is no substantive
change in the rights or privileges of any securities of the Corporation
other than changes resulting from differences in the corporate statutes
of the then existing and the new state of domicile), or of the sale or
transfer of all or substantially all of the assets of the Corporation,
then the Corporation shall cause to be filed at each office or agency maintained
for the purpose of conversion of the shares of Series C Preferred Stock, and
shall cause to be mailed to the holders of shares of Series C Preferred Stock at
their last addresses as they shall appear on the stock register, as promptly as
possible, but at least 10 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that more than one date
is specified), a notice stating (1) the date on which a record is to be taken
for the purpose of such dividend, distribution, rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined, or (2) the date on which any such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property (including cash), if any, deliverable
upon such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. The failure to give or receive the notice required by
this Section 6(vi) or any defect therein shall not affect the legality or
validity of any such dividend, distribution, right or warrant or other action.
(vii) No Fractional Shares. No fractional shares of Common Stock shall
be issued upon the conversion of any shares of the Series C Preferred Stock. In
lieu of any fraction of a share of Common Stock which would otherwise be
issuable in respect of the aggregate number of shares of the Series C Preferred
Stock surrendered by the same holder upon Automatic Conversion or Optional
Conversion, such holder shall have the right to receive an amount in cash
(computed to the nearest cent) equal to the same fraction of (a) in the case of
Automatic Conversion, the Current Market Price or (b) in the case of an Optional
Conversion by a holder, the Closing Price of the Common Stock determined as of
the second Trading Day immediately preceding the effective date of conversion.
If more than one share of Series C Preferred Stock shall be surrendered for
conversion at one time by or for the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of the Series C Preferred Stock so surrendered.
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<PAGE> 14
(viii) Treasury Shares. For the purposes of this Section 6, the number
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common Stock. The
Corporation will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(ix) Other Action. If the Corporation shall take any action affecting
the Common Stock, other than action described in this Section 6, that in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of the shares of Series C Preferred Stock, the
Exchange Rate and/or the Optional Conversion Rate for the Series C Preferred
Stock may be adjusted, to the extent permitted by law, in such manner, if any,
and at such time, as the Board of Directors may determine to be equitable in the
circumstances.
(x) Conversion. The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock for the purpose of effecting
conversion of the Series C Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of Series C
Preferred Stock not theretofore converted. For purposes of this Section 6(x),
the number of shares of Common Stock that shall be deliverable upon the
conversion of all outstanding shares of Series C Preferred Stock shall be
computed as if at the time of computation all such outstanding shares were held
by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the Series C Preferred Stock shall be validly issued, fully paid
and non-assessable.
The Corporation shall endeavor to list the shares of Common Stock
required to be delivered upon conversion of the Series C Preferred Stock, prior
to such delivery, upon each national securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series C Preferred Stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(xi) Taxes. The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
Series C Preferred Stock pursuant thereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the
Series C Preferred Stock to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid to
the Corporation the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
7. Redemption. The Series C Preferred Stock is not redeemable.
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<PAGE> 15
8. Outstanding Shares. For purposes of this Certificate of
Designations, all shares of Series C Preferred Stock shall be deemed
outstanding, except from the date of registration of transfer, all shares of
Series C Preferred Stock held of record by the Corporation or any subsidiary of
the Corporation.
9. Preemptive Rights. The Series C Preferred Stock is not entitled to
any preemptive or subscription rights in respect of any securities of the
Corporation.
10. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
11. Fractional Shares. Series C Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series C Preferred Stock.
12. Reversion to Corporation. Subject to applicable escheat laws, any
monies set aside by the Corporation in respect of any payment with respect to
shares of the Series C Preferred Stock, or dividends thereon, and unclaimed at
the end of two years from the date upon which such payment is due and payable
shall revert to the general funds of the Corporation, after which reversion the
holders of such shares shall look only to the general funds of the Company for
the payment thereof. Any interest accrued on funds so deposited shall be paid to
the Corporation from time to time.
13. Definitions. For purposes of the Series C Preferred Stock, the
following terms shall have the meanings indicated:
"business day" means any day other than a Saturday or Sunday
or any other day on which banks in The City of New York are authorized
or required by law or executive order to close.
"Closing Price" of a share of Common Stock on any date of
determination means the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such share on the
New York Stock Exchange (the "NYSE") on such date or, if the Common
Stock is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if it is
not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if it is not so
reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the
market value of a
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share of Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this
purpose by the Corporation.
"Current Market Price" per share of the Common Stock means the
average Closing Price per share of the Common Stock of the Company on
the 20 Trading Days immediately prior to, but not including, the
Mandatory Conversion Date or, for purposes of Section 6(iii)(f), the
Expiration Time.
"Fair Market Value" on any day means the average of the daily
Closing Prices of a share of Common Stock of the Company on the five
(5) consecutive Trading Days selected by the Corporation commencing not
more than 20 Trading Days before, and ending not later than, the
earlier of the day in question or the day before the "ex" date with
respect to the issuance or distribution requiring such computation. The
term "ex date," when used with respect to any issuance or distribution,
means the first day on which the Common Stock trades regular way,
without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that
day's Closing Price.
"Initial Price" means $_______ per share of Common Stock.
"Rights" means the rights of the Corporation which are
issuable under the Corporation's Rights Agreement, dated January 31,
1996, and as amended from time to time, or rights to purchase any
capital stock of the Corporation under any successor stockholder rights
plan or agreement adopted in replacement of the Corporation's Rights
Agreement.
"Trading Day" means a day on which the Common Stock (a) is not
suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and
(b) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary
market for the trading of such security.
"Transfer Agent" means Norwest Bank Minnesota, National
Association and any of its successors and assigns, or such other agent
or agents of the Corporation as may be designated by the Board of
Directors as the transfer agent for the Series C Preferred Stock.
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This Certificate shall be effective as of May ___, 1999.
IN WITNESS WHEREOF, said Apache Corporation has caused this Certificate to be
signed by Raymond Plank, its Chairman and Chief Executive Officer, and attested
by Cheri L. Peper, its Corporate Secretary, this _____ day of May, 1999.
ATTEST: APACHE CORPORATION
- ------------------------------- -------------------------------------------
Name: Cheri L. Peper Name: Raymond Plank
Title: Corporate Secretary Title: Chairman and Chief Executive Officer
17
