<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 7, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
UNION TEXAS PETROLEUM HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 76-0040040
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
1330 POST OAK BOULEVARD
HOUSTON, TEXAS 77056
(713) 623-6544
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
NEWTON W. WILSON, III
GENERAL COUNSEL, VICE PRESIDENT-ADMINISTRATION AND SECRETARY
1330 POST OAK BOULEVARD
HOUSTON, TEXAS 77056
(713) 623-6544
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
MARK ZVONKOVIC
CHRISTINE B. LAFOLLETTE JOHN B. TEHAN
ANDREWS & KURTH L.L.P. SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE 425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10017
(212) 850-2800 (212) 455-2000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH OFFERING PRICE PROPOSED MAXIMUM
CLASS OF SECURITIES AMOUNT PER AGGREGATE AMOUNT OF
TO BE REGISTERED TO BE REGISTERED DEBT SECURITY(1) OFFERING PRICE(1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(2)......... U.S. $100,000,000 100% U.S. $100,000,000 $34,483
=====================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
(2) There are being registered hereunder an indeterminate amount of Debt
Securities. If any Debt Securities are being issued at an original issue
discount, then the offering price shall be in such greater principal amount
as shall result in an aggregate initial offering price not to exceed U.S.
$100,000,000, less the dollar amount of any securities previously issued
hereunder. In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this Registration Statement
exceed U.S. $100,000,000, or its equivalent if some or all of the securities
are denominated in one or more foreign currencies.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
***************************************************************************
* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these Securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* Registration Statement becomes effective. This Prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any state in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* state. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED NOVEMBER 7, 1995
PROSPECTUS SUPPLEMENT
(To Prospectus Dated , 1995)
<TABLE>
<S> <C>
U.S. $100,000,000 [UNION TEXAS LOGO]
UNION TEXAS PETROLEUM HOLDINGS, INC.
MEDIUM-TERM NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
</TABLE>
Union Texas Petroleum Holdings, Inc. (the "Company") may offer from time to time
its Medium-Term Notes, Series A (the "Notes"), having an aggregate initial
offering price of up to U.S. $100,000,000 or the equivalent thereof in other
currencies or currency units, as such amount shall be reduced by the aggregate
initial offering price of any other Debt Securities issued by the Company,
whether inside or outside of the United States, pursuant to the Registration
Statement of which the accompanying Prospectus is a part. See "Plan of
Distribution." The Notes may be denominated in U.S. dollars or in such foreign
currencies or currency units as may be designated by the Company (the "Specified
Currency"). The Notes will be unsecured obligations of the Company. As specified
in a pricing supplement (a "Pricing Supplement") to this Prospectus Supplement,
the Notes will mature on any day nine months or more from the date of issue,
which maturity date may be subject to extension as agreed upon by the Company
and the purchaser. The Notes may be redeemed at any time prior to maturity, at
the option of the Company, in whole or in part, at a price (except for Original
Issue Discount Notes) equal to 100% of their principal amount plus accrued
interest plus, with respect to Fixed Rate Notes, a Make-Whole Premium calculated
by reference to the then-prevailing Treasury Yield and the remaining life of the
Notes, but the Notes will not be subject to repayment at the option of the
holder, except to the extent otherwise specified herein or in the applicable
Pricing Supplement. See "Description of Medium-Term Notes, Series
A -- Redemption and Repayment."
(Continued on following page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT
HERETO OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
PRICE TO AGENTS' DISCOUNTS PROCEEDS TO
PUBLIC(1)(2) AND COMMISSIONS(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note................... 100% .125%-.750% 99.875%-99.250%
Total(4)................... U.S. $100,000,000 U.S. $125,000-$750,000 U.S. $99,875,000-$99,250,000
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be issued at 100% of their principal amount.
(2) The Company will pay a commission to Salomon Brothers Inc, BA Securities,
Inc., NationsBanc Capital Markets, Inc. and UBS Securities Inc., each as
Agent (collectively, the "Agents"), in the form of a discount, ranging from
.125% to .750% of the principal amount of any Note, depending upon maturity
up to and including 30 years, and as agreed upon at the time of sale for
Notes with maturities greater than 30 years, sold through such Agent, and
may sell Notes to any Agent at a discount for resale to investors or other
purchasers at varying prices related to prevailing market prices at the time
of resale to be determined by such Agent or, if so agreed, at a fixed public
offering price. See "Plan of Distribution." Unless otherwise indicated in
the applicable Pricing Supplement, any Note sold to an Agent as principal
will be purchased by such Agent at a price equal to 100% of the principal
amount thereof less a percentage equal to the commission applicable to an
agency sale of a Note of identical maturity and may be resold by such Agent.
No commission will be payable on any sales made directly by the Company.
(3) Before deducting other expenses payable by the Company estimated at up to
U.S. $350,000 including reimbursement of certain expenses of the Agents.
(4) Or, in the case of Notes not denominated in U.S. dollars, the equivalent
thereof in the Specified Currency.
The Notes are being offered on a continuous basis by the Company through the
Agents, each of whom has agreed to use its reasonable best efforts to solicit
purchases of the Notes. The Company has reserved the right to sell the Notes
directly on its own behalf. The Notes may also be sold to any of the Agents
acting as principal for its own account or for resale to investors or other
purchasers. Unless otherwise specified in the applicable Pricing Supplement, the
Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. The Company reserves the
right to withdraw, cancel or modify the offer made hereby without notice. The
Company or any of the Agents may reject any offer in whole or in part. See "Plan
of Distribution."
SALOMON BROTHERS INC
BA SECURITIES, INC.
NATIONSBANC CAPITAL MARKETS, INC.
UBS SECURITIES INC.
The date of this Prospectus Supplement is , 1995
<PAGE> 3
(Continued from previous page)
The interest rate on, or interest formula for, the Notes will be established by
the Company from time to time and will be set forth therein and specified in the
applicable Pricing Supplement. The Notes will bear interest at fixed rates (the
"Fixed Rate Notes"), which may be zero in the case of certain Notes issued with
original issue discount ("Original Issue Discount Notes"), or at floating rates
(the "Floating Rate Notes"). The applicable Pricing Supplement will specify
whether a Floating Rate Note is a Regular Floating Rate Note, a Floating
Rate/Fixed Rate Note or an Inverse Floating Rate Note and the rate of interest
thereon as determined by reference to one or more of the CD Rate, the CMT Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR, the Prime Rate, the Treasury Rate (each, an "Interest Rate
Basis") or any other interest rate basis or formula as selected by the
purchasers and agreed to by the Company, and as adjusted by the Spread and/or
Spread Multiplier, if any, applicable to such Notes. Unless otherwise specified
in the applicable Pricing Supplement, interest on each Fixed Rate Note will
accrue from its date of issue and will be payable semiannually in arrears on
June 15 and December 15 of each year and at maturity. Unless otherwise specified
in the applicable Pricing Supplement, interest on each Floating Rate Note will
accrue from its date of issue and will be payable in arrears. See "Description
of Medium-Term Notes, Series A -- Payment of Principal and Interest." A Note may
be issued as an amortizing note (an "Amortizing Note") on which a portion or all
of the principal amount is payable prior to maturity in accordance with a
schedule, by application of a formula or by reference to an index. A Note may be
issued as an indexed note (an "Indexed Note") on which the amount of any
interest payment, in the case of an Indexed Rate Note, and/or the principal
amount payable at maturity, in the case of an Indexed Principal Note, will be
determined by reference to the level of prices, or changes in prices, or
differences between prices, of securities, currencies, intangibles, goods,
articles or commodities or by application of a formula. See "Description of
Medium-Term Notes, Series A -- Amortizing Notes" and "-- Indexed Notes."
The Specified Currency, interest rates, interest rate formulae, the Spread
and/or Spread Multiplier, if any, applicable to such Notes, and such other
variable terms are subject to change by the Company, but no such change will
affect any Note theretofore issued or as to which an offer to purchase has been
accepted by the Company.
The Notes will be issued only in fully registered form in denominations of U.S.
$1,000 or the equivalent thereof in the Specified Currency (rounded down to an
integral multiple of 1,000 units of such Specified Currency), or any amount in
excess thereof that is an integral multiple of U.S. $1,000 or 1,000 units of the
Specified Currency. Unless otherwise specified in the applicable Pricing
Supplement, each Note will be represented either by a global note ("Global
Note") deposited with, or on behalf of, The Depository Trust Company, New York,
New York (the "Depositary"), and registered in the name of the Depositary or a
nominee of the Depositary (a "Book-Entry Note"), or by a certificate issued in
definitive form (a "Certificated Note"), as set forth in the applicable Pricing
Supplement. Beneficial interests in Global Notes representing Book-Entry Notes
will be shown on, and transfers will be effected only through, records
maintained by the Depositary with respect to its participants' interests and by
the Depositary's participants. Book-Entry Notes will not be issuable as
Certificated Notes except under the circumstances described under "Description
of Medium-Term Notes, Series A -- Book-Entry System" or as otherwise set forth
on the applicable Pricing Supplement.
The Notes may be issued as Senior Notes or Subordinated Notes. Subordinated
Notes will be subordinated to all Senior Indebtedness of the Company. See
"Description of the Debt Securities" in the accompanying Prospectus.
<PAGE> 4
IN CONNECTION WITH THE OFFERING OF THE NOTES, THE AGENTS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IMPORTANT CURRENCY EXCHANGE INFORMATION
Purchasers are required to pay for the Notes in the Specified Currency, and
payments of principal of (and premium, if any) and any interest on such Notes
will be made in the Specified Currency, unless otherwise provided in the
applicable Pricing Supplement. Currently, there are limited facilities in the
United States for the conversion of U.S. dollars into foreign currencies or
currency units, and vice versa, and few banks offer non-U.S. dollar denominated
checking or savings account facilities in the United States. However, if
requested by a prospective purchaser of Notes denominated in a Specified
Currency other than U.S. dollars, the Agent soliciting the offer to purchase
will arrange for the conversion of U.S. dollars into such Specified Currency to
enable the purchaser to pay for such Notes. Such request must be made on or
before the fifth Business Day (as defined below) preceding the date of delivery
of the Notes, or by such other date as determined by such Agent. Each such
conversion will be made by the relevant Agent on such terms and subject to such
conditions, limitations and charges as such Agent may from time to time
establish in accordance with its regular foreign exchange practice. All costs of
exchange will be borne by purchasers of the Notes.
References herein to "U.S. dollars," "dollars," "U.S. $" or "$" are to the
currency of the United States of America.
DESCRIPTION OF MEDIUM-TERM NOTES, SERIES A
The information herein concerning the Notes should be read in conjunction
with the statements under Description of the Debt Securities in the accompanying
Prospectus (the "Prospectus"), to which description reference is hereby made.
The particular terms of any Note offered will be described in the applicable
Pricing Supplement. The terms and conditions set forth in this Prospectus
Supplement will apply to each Note unless otherwise specified in the applicable
Pricing Supplement and such Note. Capitalized terms used herein and not defined
have the meanings given to them in the Indenture dated as of March 15, 1995, as
amended (the "Senior Indenture"), between the Company and The First National
Bank of Chicago, as trustee, and the Indenture to be entered into (the
"Subordinated Indenture") between the Company and The First National Bank of
Chicago, as trustee. The Senior Indenture and the Subordinated Indenture are
sometimes referred to herein collectively as the "Indentures" and individually
as an "Indenture." The First National Bank of Chicago, as trustee under each of
the Indentures (and any successor thereto under each Indenture), is referred to
herein as the Trustee.
GENERAL
The Notes are to be issued under Registration Statement No. 33- (the
"Registration Statement") pursuant to which the Company has registered the sale
of Debt Securities (as defined in the Prospectus) having an aggregate initial
offering price of up to U.S. $100,000,000. The Notes issuable pursuant to this
Prospectus Supplement may be issued as Senior Notes or Subordinated Notes. The
Notes constitute separate series of Debt Securities under each of the
Indentures, and the aggregate of Senior Notes and Subordinated Notes offered
hereby is limited to up to U.S. $100,000,000 aggregate initial offering price
(or the equivalent thereof in other currencies or currency units), as such
amount may be reduced by any other Offered Debt Securities (as defined in the
Prospectus) issued by the Company pursuant to the Registration Statement (see
"Plan of Distribution"). For a description of the rights attaching to different
series of Debt Securities under the applicable Indenture, see "Description of
the Debt Securities" in the Prospectus.
S-2
<PAGE> 5
Notes will be issued in fully registered form only. Each Note will be
issued initially as either a Book-Entry Note (which is a Book Entry Security as
defined in the Indentures) or a Certificated Note under the applicable
Indenture. Except as set forth under "-- Book-Entry System" below, Book-Entry
Notes will not be issuable as Certificated Notes. It is currently anticipated
that only Notes denominated in U.S. dollars will be issued as Book-Entry Notes.
Notes denominated in U.S. dollars will be issued in denominations of U.S. $1,000
or any amount in excess thereof which is a multiple of U.S. $1,000. Unless
otherwise specified in a Pricing Supplement, Notes denominated in a Specified
Currency other than U.S. dollars will be issued in equivalent denominations of
the Specified Currency, as determined by the Company by reference to the Market
Exchange Rate (as defined below) on the applicable issue date, of U.S. $1,000
(rounded down to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof that is an integral multiple of 1,000
units of such Specified Currency. "Market Exchange Rate" means the noon buying
rate in The City of New York for cable transfers of such Specified Currency, as
such rate is reported or otherwise made available by the Federal Reserve Bank of
New York on the applicable date; provided, however, in the case of European
Currency Units ("ECUs"), Market Exchange Rate shall mean the rate of exchange
determined by the Commission of the European Communities (or any successor
thereto) as published in the Official Journal of the European Communities, or
any successor publication, on the Business Day immediately preceding the trade
date for such Notes.
The Company has designated The First National Bank of Chicago, acting
through its principal corporate trust office in The City of New York, as the
registrar and transfer agent for the Notes (the "Registrar," which term includes
any additional or successor Registrar appointed by the Company), as the paying
agent for the Notes (the "Paying Agent," which term includes any additional or
successor Paying Agent appointed by the Company). The First National Bank of
Chicago is also acting as the authenticating agent for the Notes (the
"Authenticating Agent," which term includes any additional or successor
Authenticating Agent appointed by the Trustee). Unless otherwise specified in
the applicable Pricing Supplement, The First National Bank of Chicago shall be
the calculation agent (the "Calculation Agent") with respect to the Notes.
The Notes will be unsecured obligations of the Company. The Senior Notes
will rank equally with all other unsecured and unsubordinated indebtedness of
the Company. The Company's obligations under the Notes will not be guaranteed by
any of its subsidiaries. See "Description of the Debt Securities -- Provisions
Applicable Solely to Senior Debt Securities" in the Prospectus. The Subordinated
Notes will be subordinated in right of payment to the prior payment in full of
the Senior Indebtedness of the Company as described under "Description of the
Debt Securities -- Provisions Applicable Solely to Subordinated Debt Securities"
in the Prospectus. At September 30, 1995, the Company's Senior Indebtedness
aggregated U.S. $755 million, and the Company had no subordinated indebtedness.
Unless otherwise specified in the applicable Pricing Supplement, the Notes will
be subject to redemption, in whole or in part, prior to maturity at the option
of the Company. The Notes will not be subject to repayment at the option of the
holder prior to maturity or to any sinking fund, except to the extent otherwise
specified in the applicable Pricing Supplement. See "-- Redemption and
Repayment."
The Notes will be offered on a continuous basis and will mature on the
Stated Maturity thereof, which may be any day nine months or more from the date
of issue, as selected by the purchaser and agreed to by the Company. Floating
Rate Notes will mature on an Interest Payment Date (as defined below) unless
otherwise specified in the applicable Pricing Supplement.
"Business Day" means any day that is not a Saturday or Sunday and that is
neither a legal holiday nor a day on which banking institutions are generally
authorized or obligated by law or executive order to close in The City of New
York or any other place or places where the principal of (and premium, if any)
and interest on the Notes is payable and (i) with respect to LIBOR Notes (as
defined below), in the City of London and (ii) with respect to Notes denominated
in a Specified Currency other than U.S. dollars, in the Principal Financial
Center (as defined below) of the country issuing the Specified Currency. "London
Business Day" means any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market. "Principal Financial Center" means
the capital city of the country issuing the Specified Currency in which any
payment in respect of the Notes is to be made, or solely with respect to the
S-3
<PAGE> 6
calculation of LIBOR, issuing the specified Index Currency (as defined below),
except that with respect to U.S. dollars, Australian dollars, Deutsche marks,
Dutch guilders, Italian lire, Swiss francs and ECUs, the Principal Financial
Center shall be The City of New York, Sydney, Frankfurt, Amsterdam, Milan,
Zurich and Luxembourg, respectively. "Maturity" or "Maturity Date" means the
date on which the principal of a Note or an installment of principal becomes due
and payable as provided in the applicable Note or Indenture, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise. Unless otherwise specified in the applicable Pricing Supplement, the
Notes will be denominated in U.S. dollars, and payments of principal of (and
premium, if any) and any interest on the Notes will be made in U.S. dollars.
PAYMENT CURRENCY
If the principal of (and premium, if any) or any interest on any Note is
payable in a Specified Currency other than U.S. dollars and such Specified
Currency is not available to the Company for making payments thereof due to the
imposition of exchange controls or other circumstances beyond the control of the
Company, the Company will be entitled to satisfy its obligations to holders of
the Notes by making such payments (including any such payment at Maturity) in
U.S. dollars on the basis of the Market Exchange Rate on the second Business Day
prior to such payment or, if such Market Exchange Rate is not then available, on
the basis of the most recently available Market Exchange Rate or as otherwise
specified in the applicable Pricing Supplement. Any payment made under such
circumstances in U.S. dollars where the required payment is in a Specified
Currency other than U.S. dollars will not constitute an Event of Default under
the Indenture.
PAYMENT OF PRINCIPAL AND INTEREST
In the case of the Notes denominated in and on which principal (and
premium, if any) and any interest is payable in U.S. dollars, principal (and
premium, if any) and any interest will be payable, and the Notes will be
transferable, at the principal corporate trust office of The First National Bank
of Chicago in The City of New York, which on the date hereof is located at 14
Wall Street, 8th Floor, New York, New York, or at such other place or places as
may be designated pursuant to the Indentures, provided that the Company, at its
option, may pay interest other than interest due at Maturity by check mailed or
delivered to registered holders (which, in the case of Book-Entry Notes
represented by a Global Note, will be the Depositary or a nominee of the
Depositary). Unless otherwise specified in the applicable Pricing Supplement,
any interest on Notes (other than interest at Maturity) payable in a Specified
Currency other than U.S. dollars will be paid by mailing a check or draft in the
Specified Currency drawn on an account at a bank outside of the United States.
If any Notes are denominated in a Specified Currency other than U.S. dollars or
if the principal of (and premium, if any) or any interest on any Notes is
payable in a Specified Currency other than U.S. dollars, the applicable Pricing
Supplement will provide additional information pertaining to the terms of such
Notes and other matters of interest to the holders thereof. At the Maturity of
any Note, the principal thereof, together with any premium and accrued interest
thereon, will be payable in immediately available funds upon presentation and
surrender thereof at the office of the Paying Agent at the above address or at
such other place or places as may be designated pursuant to the Indentures or
the applicable Pricing Supplement, provided that the Note is presented to the
Paying Agent in time for the Paying Agent to make such payments in such funds in
accordance with its normal procedures.
Each Note will bear interest from its date of issue at either (a) a fixed
rate (a "Fixed Rate Note"), which may be zero in the case of certain Original
Issue Discount Notes or (b) rates determined by reference to the interest rate
formula specified in the applicable Pricing Supplement (a "Floating Rate Note"),
until the principal thereof is paid or duly made available for payment. Interest
will be payable in arrears on each Interest Payment Date (as defined below).
Unless otherwise specified in the applicable Pricing Supplement, the first
payment of interest on any Note originally issued between a Regular Record Date
(as defined below) and the related Interest Payment Date or on an Interest
Payment Date will be made on the Interest Payment Date immediately following the
next succeeding Regular Record Date to
S-4
<PAGE> 7
the holder on such next succeeding Regular Record Date. "Interest Payment Date"
means the Stated Maturity of an installment of interest on the Notes, which is
(i) in the case of Fixed Rate Notes (other than certain Original Issue Discount
Notes bearing zero interest), June 15 and December 15 of each year, unless
otherwise specified in the applicable Pricing Supplement, and at Maturity, and
(ii) in the case of Floating Rate Notes that reset: (i) daily, weekly or
monthly, on the third Wednesday of each month or on the third Wednesday of
March, June, September and December of each year, as specified in the applicable
Pricing Supplement; (ii) quarterly, on the third Wednesday of March, June,
September and December of each year; (iii) semiannually, on the third Wednesday
of the two months of each year specified in the applicable Pricing Supplement;
and (iv) annually, on the third Wednesday of the month specified in the
applicable Pricing Supplement; and, in each case, on the Maturity Date, except
as otherwise provided herein or in the applicable Pricing Supplement. Unless
otherwise specified in the applicable Pricing Supplement, a "Regular Record
Date" shall be the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date.
Interest will be payable to the person in whose name a Note is registered
(which for a Global Note representing Book-Entry Notes will be the Depositary or
a nominee of the Depositary) at the close of business on the Regular Record Date
next preceding each Interest Payment Date; provided, however, that interest
payable at Maturity will be payable to the person to whom principal shall be
payable (which for Global Notes representing Book-Entry Notes, will be the
Depositary or a nominee of the Depositary).
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described under "Description of the Debt Securities -- Provisions
Applicable to Both Senior and Subordinated Debt Securities -- Events of Default"
in the Prospectus, the amount of principal due and payable with respect to such
Note shall be limited as described in "-- Original Issue Discount Notes."
Fixed Rate Notes
Unless otherwise specified in the applicable Pricing Supplement, each Fixed
Rate Note will bear interest from and including the date of issue, or the most
recent date to which interest has been paid or duly provided for, to, but
excluding, the Interest Payment Date or Maturity, as the case may be, at the
rate per annum stated on the face thereof until the principal amount thereof is
paid or made available for payment. Unless otherwise specified in the applicable
Pricing Supplement, interest on Fixed Rate Notes will be computed on the basis
of a 360-day year of twelve 30-day months.
If any Interest Payment Date or the Maturity of a Fixed Rate Note falls on
a day that is not a Business Day, the required payment of principal (and
premium, if any) or any interest will be made on the next succeeding Business
Day with the same force and effect as if made on the date such payment was due,
and no interest will accrue on the amount so payable for the period from and
after such Interest Payment Date or Maturity, as the case may be.
Floating Rate Notes
Unless otherwise specified in the applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. The applicable Pricing Supplement
will specify certain terms with respect to which each Floating Rate Note is
being delivered, including: whether such Floating Rate Note is a "Regular
Floating Rate Note," a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note," Fixed Rate Commencement Date and Fixed Interest Rate, as applicable,
Interest Rate Basis or Bases, Initial Interest Rate, Interest Reset Period and
Dates, Regular Record Dates, Interest Payment Period and Dates, Index Maturity,
Maximum Interest Rate and Minimum Interest Rate, if any, and Spread and/or
Spread Multiplier, if any, and if one or more of the applicable Interest Rate
Bases is LIBOR, the Designated LIBOR Page, all as defined and/or described
below.
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The interest rate borne by the Floating Rate Notes will be determined as
follows:
(i) Unless such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note," an "Inverse Floating Rate Note" or as having an
Addendum attached, such Floating Rate Note will be designated as a "Regular
Floating Rate Note" and, except as described below or in the applicable
Pricing Supplement, will bear interest at the rate determined by reference
to the applicable Interest Rate Basis or Bases (a) plus or minus the
applicable Spread, if any, and/or (b) multiplied by the applicable Spread
Multiplier, if any. Commencing on the first Interest Reset Date, the rate
at which interest on such Regular Floating Rate Note shall be payable shall
be reset as of each Interest Reset Date; provided, however, that the
interest rate in effect for the period from the date of issue to the first
Interest Reset Date will be the Initial Interest Rate.
(ii) If such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note," then, except as described below or in the applicable
Pricing Supplement, such Floating Rate/Fixed Rate Note will bear interest
at the rate determined by reference to the applicable Interest Rate Basis
or Bases (a) plus or minus the applicable Spread, if any, and/or (b)
multiplied by the applicable Spread Multiplier, if any. Commencing on the
first Interest Reset Date, the rate at which interest on such Floating
Rate/Fixed Rate Note shall be payable shall be reset as of each Interest
Reset Date; provided, however, that the interest rate in effect for the
period from the date of issue to the first Interest Reset Date will be the
Initial Interest Rate and the interest rate in effect commencing on the
Fixed Rate Commencement Date to the Maturity Date shall be the Fixed
Interest Rate, if such rate is specified in the applicable Pricing
Supplement or, if no such Fixed Interest Rate is so specified, the interest
rate in effect thereon on the day immediately preceding the Fixed Rate
Commencement Date.
(iii) If such Floating Rate Note is designated as an "Inverse Floating
Rate Note," then, except as described below or in the applicable Pricing
Supplement, such Inverse Floating Rate Note will bear interest equal to the
Fixed Interest Rate specified in the applicable Pricing Supplement minus
the rate determined by reference to the applicable Interest Rate Basis or
Bases (a) plus or minus the applicable Spread, if any and/or (b) multiplied
by the applicable Spread Multiplier, if any; provided, however, that unless
otherwise specified in the applicable Pricing Supplement, the interest rate
thereon during any Interest Reset Period (as defined below) will not be
less than zero. Commencing on the first Interest Reset Date, the rate at
which interest on such Inverse Floating Rate Note is payable shall be reset
as of each Interest Reset Date; provided, however, that the interest rate
in effect for the period from the date of issue to the first Interest Reset
Date will be the Initial Interest Rate.
The "Spread" is the number of basis points (one one-hundredth of a
percentage point) to be added to or subtracted from the related Interest Rate
Basis or Bases applicable to such Floating Rate Note. The "Spread Multiplier" is
the percentage of the related Interest Rate Basis or Bases applicable to such
Floating Rate Note by which such Interest Rate Basis or Bases will be multiplied
to determine the applicable interest rate on such Floating Rate Note. The "Index
Maturity" is the period to maturity of the instrument or obligation with respect
to which the related Interest Rate Basis or Bases will be calculated.
Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof, such Floating Rate
Note shall bear interest in accordance with the terms described in such Addendum
and the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth above or in
the applicable Pricing Supplement, the interest rate in effect on each day shall
be (i) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as defined below) immediately preceding such
Interest Reset Date or (ii) if such day is not an Interest Reset Date, the
interest rate determined as of the Interest Determination Date immediately
preceding the most recent Interest Reset Date (or, if none, the Initial Interest
Rate).
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The applicable Pricing Supplement will designate one or more of the
following Interest Rate Bases as applicable to each Floating Rate Note: (a) the
CD Rate (a "CD Rate Note"); (b) the CMT Rate (a "CMT Rate Note"); (d) the
Commercial Paper Rate (a "Commercial Paper Rate Note"); (d) the Eleventh
District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate Note");
(e) the Federal Funds Rate (a "Federal Funds Rate Note"); (f) LIBOR (a "LIBOR
Note"); (g) the Prime Rate (a "Prime Rate Note"); (h) the Treasury Rate (a
"Treasury Rate Note"); or (i) such other interest rate basis or interest rate
formula as is set forth in such Pricing Supplement; provided, however, that with
respect to a Floating Rate/Fixed Rate Note, the interest rate commencing on the
Fixed Rate Commencement Date to the Maturity Date shall be the Fixed Interest
Rate, if such rate is specified in the applicable Pricing Supplement, or, if no
such Fixed Interest Rate is so specified, the interest rate in effect thereon on
the day immediately preceding the Fixed Rate Commencement Date.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): (i) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest that may accrue during any
interest period (a "Maximum Interest Rate"); and (ii) a minimum numerical
interest rate limitation, or floor, on the rate of interest that may accrue
during any interest period (a "Minimum Interest Rate"). The interest rate on the
Notes will in no event be higher than the maximum rate permitted by applicable
law as the same may be modified by United States law of general application.
The applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other specified period (each, an
"Interest Reset Period") and the dates on which such rate of interest will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Date will be, in the case of
Floating Rate Notes that reset: (i) daily, each Business Day; (ii) weekly, the
Wednesday of each week (with the exception of weekly reset Floating Rate Notes
as to which the Treasury Rate is an applicable Interest Rate Basis, which will
reset the Tuesday of each week, except as described below); (iii) monthly, the
third Wednesday of each month (with the exception of monthly reset Floating Rate
Notes as to which the Eleventh District Cost of Funds Rate is an applicable
Interest Rate Basis, which will reset on the first calendar day of the month);
(iv) quarterly, the third Wednesday of March, June, September and December of
each year; (v) semiannually, the third Wednesday of the two months specified in
the applicable Pricing Supplement; and (vi) annually, the third Wednesday of the
month specified in the applicable Pricing Supplement; provided, however, that,
with respect to Floating Rate/Fixed Rate Notes, the fixed rate of interest in
effect for the period from the Fixed Rate Commencement Date to the Maturity Date
shall be the Fixed Interest Rate or, if no such Fixed Interest Rate is
specified, the interest rate in effect on the day immediately preceding the
Fixed Rate Commencement Date, as specified in the applicable Pricing Supplement.
If any Interest Reset Date for any Floating Rate Note would otherwise be a day
that is not a Business Day, such Interest Reset Date will be postponed to the
next succeeding day that is a Business Day, except that in the case of a
Floating Rate Note as to which LIBOR is an applicable Interest Rate Basis, if
such Business Day falls in the next succeeding calendar month, such Interest
Reset Date will be the immediately preceding Business Day.
The interest rate in effect with respect to a Floating Rate Note from the
date of issue to the first Interest Reset Date (the "Initial Interest Rate")
will be specified in the applicable Pricing Supplement. The interest rate
applicable to each Interest Reset Period commencing on the Interest Reset Date
with respect to such Interest Reset Period will be the rate determined as of the
applicable Interest Determination Date on or prior to the Calculation Date (as
defined below). The "Interest Determination Date" with respect to the CD Rate
Notes, the CMT Rate Notes, the Commercial Paper Rate Notes, the Federal Funds
Rate Notes and the Prime Rate Notes will be the second Business Day immediately
preceding the applicable Interest Reset Date; the "Interest Determination Date"
with respect to the Eleventh District Cost of Funds Rate Notes will be the last
working day of the month immediately preceding the applicable Interest Reset
Date on which the Federal Home Loan Bank of San Francisco publishes the Index
(as defined below); and the "Interest Determination Date" with respect to LIBOR
Notes will be the second London Business Day immediately preceding the
applicable "Interest Reset
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Date." With respect to Treasury Rate Notes, the "Interest Determination Date"
will be the day in the week in which the applicable Interest Reset Date falls on
which Treasury Bills (as defined below) are normally auctioned (Treasury Bills
are normally sold at an auction held on Monday of each week, unless that day is
a legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the Interest Determination Date
will be such preceding Friday; and provided, further, that if an auction falls
on the applicable Interest Reset Date, then the Interest Reset Date will instead
be the first Business Day following such auction. The "Interest Determination
Date" pertaining to a Floating Rate Note, the interest rate of which is
determined by reference to two or more Interest Rate Bases, will be the second
Business Day prior to the applicable Interest Reset Date for such Floating Rate
Note on which each Interest Rate Basis is determinable. Each Interest Rate Basis
will be determined on such date, and the applicable interest rate will take
effect on the applicable Interest Reset Date.
If any Interest Payment Date for any Floating Rate Note (other than the
Maturity Date) would otherwise be a day that is not a Business Day, such
Interest Payment Date will be postponed to the next day that is a Business Day,
except that in the case of a Floating Rate Note that is a LIBOR Note, if such
Business Day falls in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day. If a Maturity Date of a
Floating Rate Note falls on a date that is not a Business Day, the required
payment of interest and principal (and premium, if any) may be made on the next
succeeding Business Day with the same force and effect as if made on the date
such payment was due, and no interest on such payment will accrue for the period
from and after the Maturity Date to the date of such payment on the next
succeeding Business Day.
Unless otherwise specified in the applicable Pricing Supplement, interest
payments for Floating Rate Notes shall be the amount of interest accrued from
and including the date of issue, or from and including the last date to which
interest has been paid or duly provided for, to, but excluding, the Interest
Payment Date or Maturity Date, as the case may be. The interest rate in effect
on any Interest Reset Date will be the applicable rate as reset on such date.
The interest rate applicable to any other day is the interest rate as reset on
the immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day in the period for which accrued interest is being calculated. Unless
otherwise specified in the applicable Pricing Supplement, the interest factor
for each such day will be computed by dividing the interest rate applicable to
such day by 360, in the case of CD Rate Notes, Commercial Paper Rate Notes,
Eleventh District Cost of Funds Rate Notes, Federal Funds Rate Notes, LIBOR
Notes or Prime Rate Notes, or by the actual number of days in the year in the
case of CMT Rate Notes or the Treasury Rate Notes. Unless otherwise specified in
the applicable Pricing Supplement, the interest factor for Notes for which the
interest rate is calculated with reference to two or more Interest Rate Bases
will be calculated in each period in the same manner as if only one of the
applicable Interest Rate Bases applied as specified in the applicable Pricing
Supplement. All percentages resulting from any calculation on Floating Rate
Notes will be rounded to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all
U.S. dollar amounts used in or resulting from such calculation on Floating Rate
Notes will be rounded to the nearest cent.
Upon request of the holder of any Floating Rate Note, the Calculation Agent
will disclose the interest rate then in effect and, if determined, the interest
rate that will become effective as a result of a determination made for the next
succeeding Interest Reset Date with respect to such Floating Rate Note. Unless
otherwise specified in the applicable Pricing Supplement, the "Calculation
Date," if applicable, pertaining to any Interest Determination Date will be the
earlier of (i) the tenth calendar day after such Interest Determination Date,
or, if such day is not a Business Day, the next succeeding Business Day or (ii)
the Business Day immediately preceding the applicable Interest Payment Date or
the Maturity Date, as the case may be.
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Unless otherwise specified in the applicable Pricing Supplement, the
Calculation Agent will determine the interest rate with respect to each Interest
Rate Basis in accordance with the applicable provisions below.
CD Rate Notes. CD Rate Notes will bear interest at the rates (calculated
with reference to the CD Rate and the Spread and/or Spread Multiplier, if any,
and subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in such CD Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CD Rate (a "CD Rate Interest Determination Date"), the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDS (Secondary Market)," or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable certificates of deposit of the Index Maturity
specified in the applicable Pricing Supplement as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" or any successor publication
("Composite Quotations") under the heading "Certificates of Deposit." If such
rate is not yet published in either H.15(519) or Composite Quotations by 3:00
P.M., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in The City of New York (which may include one or more of the Agents or
their affiliates) selected by the Calculation Agent for negotiable certificates
of deposit of major United States money market banks for negotiable certificates
of deposit with a remaining maturity closest to the Index Maturity designated in
the applicable Pricing Supplement in an amount that is representative for a
single transaction in that market at that time; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate determined as of such CD Rate Interest Determination
Date will be the CD Rate in effect on such CD Rate Interest Determination Date.
CMT Rate Notes. CMT Rate Notes will bear interest at the rates (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any,
and subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in such CMT Rate Notes and any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, CMT Rate
means, with respect to any Interest Determination Date relating to a CMT Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CMT Rate (a "CMT Rate Interest Determination Date"), the rate
displayed on the Designated CMT Telerate Page (as defined below) under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board Release
H.15 . . . Mondays Approximately 3:45 P.M.," under the column for the Designated
CMT Maturity Index (as defined below) for (i) if the Designated CMT Telerate
Page is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if
the Designated CMT Telerate Page is 7052, the week, or the month, as specified
in the applicable Pricing Supplement, ended immediately preceding the week in
which the related CMT Rate Interest Determination Date occurs. If such rate is
no longer displayed on the relevant page, or if not displayed by 3:00 P.M., New
York City time, on the related Calculation Date, then the CMT Rate for such CMT
Rate Interest Determination Date will be such treasury constant maturity rate
for the Designated CMT Maturity Index as published in the relevant H.15(519). If
such rate is no longer published, or if not published by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either
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the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 P.M.,
New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York (which may include one or more of the Agents or their affiliates) selected
by the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury Notes") with an original
maturity of approximately the Designated CMT Maturity Index and a remaining term
to maturity of not less than such Designated CMT Maturity Index minus one year.
If the Calculation Agent cannot obtain three such Treasury Note quotations, the
CMT Rate for such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on the CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)) for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least U.S. $100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers selected by the Calculation
Agent are quoting as described herein, the CMT Rate will be the CMT Rate in
effect on such CMT Rate Interest Determination Date. If two Treasury Notes with
an original maturity as described in the second preceding sentence have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the quotes for the Treasury Note with the shorter remaining term to maturity
will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified in the applicable Pricing Supplement, the Designated CMT
Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
Commercial Paper Rate Notes. Commercial Paper Rate Notes will bear interest
at the interest rates (calculated with reference to the Commercial Paper Rate
and the Spread and/or Spread Multiplier, if any, and subject to the Minimum
Interest Rate and the Maximum Interest Rate, if any) specified in the Commercial
Paper Rate Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means with respect to any Interest Determination Date
relating to a Commercial Paper Rate Note or any Floating Rate Note for which the
interest rate is determined with reference to the Commercial Paper Rate (a
"Commercial Paper Rate Interest Determination Date"), the Money Market Yield (as
defined below) on such date of the rate for commercial paper having the Index
Maturity specified in the applicable Pricing Supplement as published in
H.15(519) under the heading Commercial Paper. In the event that such rate is not
published by 3:00 P.M., New York City time, on the related Calculation Date, the
Commercial Paper
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Rate will be the Money Market Yield on such Commercial Paper Rate Interest
Determination Date of the rate for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement as published in Composite
Quotations under the heading "Commercial Paper" (with an Index Maturity of one
month or three months being deemed to be equivalent to an Index Maturity of 30
days or 90 days, respectively). If by 3:00 P.M., New York City time, on the
related Calculation Date such rate is not yet published in H.15(519) or
Composite Quotations, then the Commercial Paper Rate on such Interest
Determination Date will be calculated by the Calculation Agent and will be the
Money Market Yield of the arithmetic mean of the offered rates at approximately
11:00 A.M., New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of commercial paper in The City of
New York (which may include one or more of the Agents or their affiliates)
selected by the Calculation Agent for commercial paper having the Index Maturity
designated in the applicable Pricing Supplement placed for an industrial issuer
whose bond rating is "AA," or the equivalent, from a nationally recognized
rating agency; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a percent
rounded upwards) calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
-------------
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Eleventh District Cost of Funds Rate Notes. Eleventh District Cost of Funds
Rate Notes will bear interest at the rates (calculated with reference to the
Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if
any, and subject to the Minimum Interest Rate and the Maximum Interest Rate, if
any) specified in such Eleventh District Cost of Funds Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date relating to an Eleventh District Cost of Funds Rate Note or any Floating
Rate Note for which the interest rate is determined with reference to the
Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate
Interest Determination Date"), the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on any
related Eleventh District Cost of Funds Rate Interest Determination Date, the
Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average costs of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced by the Federal Home Loan Bank of San
Francisco as such cost of funds for the calendar month immediately preceding the
date of such announcement. If the Federal Home Loan Bank of San Francisco fails
to announce such rate for the calendar month immediately preceding such Eleventh
District Cost of Funds Rate Interest Determination Date, then the Eleventh
District Cost of Funds Rate determined as of such Eleventh District Cost of
Funds Rate Interest Determination Date will be the Eleventh District Cost of
Funds Rate in effect on such Eleventh District Cost of Funds Rate Interest
Determination Date.
Federal Funds Rate Notes. Federal Funds Rate Notes will bear interest at
the rates (calculated with reference to the Federal Funds Rate and the Spread
and/or Spread Multiplier, if any, and subject to the
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Minimum Interest Rate and the Maximum Interest Rate, if any) specified in such
Federal Funds Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date relating to a
Federal Funds Rate Note or any Floating Rate Note for which the interest rate is
determined with reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for federal funds as
published in H.15(519) under the heading "Federal Funds (Effective)" or, if not
published by 3:00 P.M., New York City time, on the related Calculation Date, the
rate on such Federal Funds Rate Interest Determination Date as published in
Composite Quotations under the column "Effective Rate" under the heading
"Federal Funds." If by 3:00 P.M., New York City time, on the related Calculation
Date such rate is not published in either H.15(519) or Composite Quotations,
then the Federal Funds Rate on such Federal Funds Rate Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic mean
of the rates for the last transaction in overnight United States dollar federal
funds arranged by three leading brokers of federal funds transactions in The
City of New York (which may include one or more of the Agents or their
affiliates), selected by the Calculation Agent, prior to 9:00 A.M., New York
City time, on such Federal Funds Rate Interest Determination Date; provided,
however, that if the brokers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the Federal Funds Rate determined as of
such Federal Funds Rate Interest Determination Date will be the Federal Funds
Rate in effect on such Federal Funds Rate Interest Determination Date.
LIBOR Notes. LIBOR Notes will bear interest at the interest rates
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any, and subject to the Minimum Interest Rate and the Maximum Interest Rate, if
any) specified in the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR" will be
determined by the Calculation Agent in accordance with the following provisions:
(i) With respect to any Interest Determination Date relating to a
LIBOR Note or any Floating Rate Note for which the interest is determined
with reference to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will
be, as specified in the applicable Pricing Supplement, either: (a) the
arithmetic mean of the offered rates for deposits in the Index Currency (as
defined below) having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date, which appear
on the Reuters Screen LIBO Page as of 11:00 A.M., London time, on that
LIBOR Interest Determination Date, if at least two such offered rates
appear on the Reuters Screen LIBO Page, unless such Reuters Screen LIBO
Page by its terms provides only for a single rate, in which case such
single rate shall be used ("LIBOR Reuters"), or (b) the rate for deposits
in the Index Currency having the Index Maturity designated in the
applicable Pricing Supplement, commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date, which appears
on the Telerate Page 3750 as of 11:00 A.M., London time, on that LIBOR
Interest Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page"
means the display designated as page "LIBO" on the Reuters Monitor Money
Rates Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London interbank offered rates of
major banks for the applicable Index Currency). "Telerate Page 3750" means
the display designated as page "3750" on the Dow Jones Telerate Service (or
such other page as may replace the 3750 page on that service or such other
service or services as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates of major banks
for the applicable Index Currency). If neither LIBOR Reuters nor LIBOR
Telerate is specified in the applicable Pricing Supplement, LIBOR for the
applicable Index Currency will be determined as if LIBOR Telerate (and, if
the U.S. dollar is the Index Currency, page 3750) had been specified. If
fewer than two offered rates appear on the Reuters Screen LIBO Page
(unless, as aforesaid, only a single rate is required), or if no rate
appears on the Telerate Page 3750, as applicable, LIBOR in respect of that
LIBOR Interest Determination Date will be determined as if the parties had
specified the rate described in (ii) below.
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(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates (unless, as aforesaid, only a single rate is
required) appear on the Reuters Screen LIBO Page, as specified in (i)(a)
above, or on which no rate appears on Telerate Page 3750, as specified in
(i)(b) above, as applicable, LIBOR will be determined on the basis of the
rates at which deposits in the Index Currency having the Index Maturity
designated in the applicable Pricing Supplement are offered at
approximately 11:00 A.M., London time, on that LIBOR Interest Determination
Date by four major banks in the London interbank market selected by the
Calculation Agent ("Reference Banks") to prime banks in the London
interbank market, commencing on the second London Business Day immediately
following that LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index Currency in
such market at such time. The Calculation Agent will request the principal
London office of each of the Reference Banks to provide a quotation of its
rate. If at least two such quotations are provided, LIBOR in respect of
that LIBOR Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect of
that LIBOR Interest Determination Date will be the arithmetic mean of the
rates quoted at approximately 11:00 A.M., in the Principal Financial Center
for the country of the Index Currency, on the LIBOR Interest Determination
Date by three major banks in such Principal Financial Center (which may
include affiliates of the Agents) selected by the Calculation Agent for
loans in the Index Currency to leading European banks, having the Index
Maturity designated in the applicable Pricing Supplement commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date and in a principal amount that is representative for a
single transaction in such Index Currency in such market at such time;
provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR with
respect to such LIBOR Interest Determination Date will be the rate of LIBOR
in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.
Prime Rate Notes. Prime Rate Notes will bear interest at the rates
(calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified in such Prime Rate Notes and the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a Prime
Rate Note or any Floating Rate Note for which the interest rate is determined
with reference to the Prime Rate (a "Prime Rate Interest Determination Date"),
the rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates but more than one such rate
appear on the Reuters Screen USPRIME1 for such Prime Rate Interest Determination
Date, the Prime Rate shall be the arithmetic mean of the prime rates quoted on
the basis of the actual number of days in the year divided by 360 as of the
close of business on such Prime Rate Interest Determination Date by four major
money center banks in The City of New York selected by the Calculation Agent. If
fewer than two such rates appear on the Reuters Screen USPRIME1, the Prime Rate
will be determined by the Calculation Agent on the basis of the rates furnished
in The City of New York by three substitute banks or trust companies organized
and doing business under the laws of the United States, or any state thereof, in
each case having total equity capital of at least $500 million and being subject
to supervision or examination by Federal or State authority, selected by the
Calculation Agent to provide such rate or rates; provided, however, that if the
banks or trust companies selected as aforesaid are not quoting as mentioned in
this sentence, the Prime Rate determined as of such Prime Rate Interest
Determination Date will be the Prime Rate in effect on such Prime Rate Interest
Determination Date.
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"Reuters Screen USPRIME1" means the display designated as page "USPRIME1"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the USPRIME1 page on that service for the purpose of displaying prime rates or
base lending rates of major United States banks).
Treasury Rate Notes. Treasury Rate Notes will bear interest at the interest
rates (calculated with reference to the Treasury Rate and the Spread and/or
Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Treasury Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date relating to a
Treasury Rate Note or any Floating Rate Note for which the interest rate is
determined by reference in the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate applicable to the auction held on such Treasury
Rate Interest Determination Date of direct obligations of the United States
("Treasury Bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "Treasury Bills
- -- auction average (investment)" or, if not so published by 3:00 P.M., New York
City time, on the related Calculation Date pertaining to such Treasury Rate
Interest Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of Treasury Bills having
the Index Maturity designated in the applicable Pricing Supplement are not
published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held on such Treasury Rate
Interest Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest
Determination Date, of three leading primary United States government securities
dealers (which may include one or more of the Agents or their affiliates)
selected by the Calculation Agent for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement; provided, however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Treasury Rate Interest
Determination Date.
SUBSEQUENT INTEREST PERIODS
The applicable Pricing Supplement relating to each Note will indicate
whether the Company has the option to reset the interest rate in the case of a
Fixed Rate Note, or the Spread and/or Spread Multiplier in the case of a
Floating Rate Note, and, if so, the date or dates on which such interest rate or
such Spread and/or Spread Multiplier, as the case may be, may be reset (each an
"Optional Reset Date").
If the Company elects to reset the interest rate, Spread and/or Spread
Multiplier of a Note as described above, the holder of such Note will have the
option to elect repayment of such Note by the Company on any Optional Reset Date
at a price equal to the aggregate principal amount thereof outstanding on, plus
any interest accrued to, such Optional Reset Date or, for an Original Issue
Discount Note, as described below under "-- Original Issue Discount Notes." In
order for a Note to be so repaid on an Optional Reset Date, the holder thereof
must follow the procedures set forth below under "-- Redemption and Repayment"
for optional repayment, except that (i) the period for delivery of such Note or
notification to the Trustee will be at least 25 but not more than 35 days prior
to such Optional Reset Date and (ii) a holder who has tendered a Note for
repayment pursuant to a Reset Notice (as defined below) may, by written notice
to the Trustee, revoke any such tender until the close of business on the tenth
day prior to such Optional Reset Date.
The Company may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 45 but not more than 60 days prior to an
Optional Reset Date for such Note. Not later than 40 days prior to such Optional
Reset Date, the Trustee for such Note will mail, first class, postage
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prepaid, or deliver to the holder of such Note a notice (the "Reset Notice").
The Reset Notice will indicate whether the Company has elected to reset the
interest rate (in the case of a Fixed Rate Note) or the Spread and/or Spread
Multiplier (in the case of a Floating Rate Note) and if so, (i) such new
interest rate or such new Spread and/or Spread Multiplier, as the case may be;
and (ii) the provisions, if any, for redemption during the period from such
Optional Reset Date to the next Optional Reset Date or, if there is no such next
Optional Reset Date, to the Stated Maturity of such Note (each such period a
"Subsequent Interest Period"), including the date or dates on which or the
period or periods during which and the price or prices at which such redemption
may occur during such Subsequent Interest Period.
Notwithstanding the foregoing, the Company may, at its option, revoke the
interest rate (in the case of a Fixed Rate Note) or the Spread and/or Spread
Multiplier (in the case of a Floating Rate Note) as provided for in the Reset
Notice, and establish a higher interest rate or a Spread and/or Spread
Multiplier that is higher (or lower if the Note is an Inverse Floating Rate
Note) than the interest rate, Spread and/or Spread Multiplier provided for in
the relevant Reset Notice for the Subsequent Interest Period commencing on such
Optional Reset Date, by causing the Trustee to mail or deliver, not later than
20 days prior to an Optional Reset Date for a Note (or, if such day is not a
Business Day, on the immediately succeeding Business Day), notice of such higher
interest rate, or new Spread and/or Spread Multiplier to the holder of such
Note. Such notice will be irrevocable. The Company must notify the Trustee of
its intentions to revoke such Reset Notice at least 20 days prior to such
Optional Reset Date. Each Note with respect to which the interest rate, Spread
and/or Spread Multiplier is reset on an Optional Reset Date and with respect to
which the holder of such Note has not tendered such Note for repayment (or has
validly revoked any such tender) pursuant to the next succeeding paragraph will
bear such higher interest rate or new Spread and/or Spread Multiplier for the
Subsequent Interest Period.
EXTENSION OF MATURITY
Unless otherwise stated in the applicable Pricing Supplement, each Note
will mature at the Stated Maturity of such Note. The applicable Pricing
Supplement relating to any Note (other than an Amortizing Note) may indicate
whether the Company has the option to extend the Stated Maturity of such Note
for one or more periods of whole years from one to five (each an "Extension
Period") up to but not beyond the date (the "Final Maturity") set forth in such
Pricing Supplement.
The Company may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 45 but not more than 60 days prior to the
old Stated Maturity for such Note. Not later than 40 days prior to the old
Stated Maturity of such Note, the Trustee for such Note will mail, first class,
postage prepaid, or deliver to the holder of such Note a notice (the "Extension
Notice"). The Extension Notice will set forth (i) the election of the Company to
extend the Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in
the case of a Fixed Rate Note, the interest rate applicable to the Extension
Period or, in the case of a Floating Rate Note, the Spread and/or Spread
Multiplier applicable to the Extension Period; and (iv) the provisions, if any,
for redemption during the Extension Period, including the date or dates on which
or the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing or delivering
by such Trustee of an Extension Notice to the holder of a Note, the Stated
Maturity of such Note shall be extended automatically, and, except as modified
by the Extension Notice and as described in the next paragraph, such Note will
have the same terms as prior to the mailing or delivering of such Extension
Notice.
Notwithstanding the foregoing, not later than 20 days prior to the old
Stated Maturity of such Note (or, if such day is not a Business Day, on the
immediately succeeding Business Day), the Company may, at its option, revoke the
interest rate (in the case of a Fixed Rate Note) or the Spread and/or Spread
Multiplier (in the case of a Floating Rate Note) provided for in the Extension
Notice for such Note and establish a higher interest rate (in the case of a
Fixed Rate Note) or a higher Spread and/or Spread Multiplier (or a lower Spread
and/or Spread Multiplier in the case of an Inverse Floating Rate Note) for the
Extension Period, by causing the Trustee for such Note to mail, first class,
postage prepaid, or deliver notice of such higher interest rate or new Spread
and/or Spread Multiplier, as the case may be, to the holder of such Note. Such
notice will be irrevocable. All Notes with respect to which the Stated Maturity
is
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extended will bear such higher interest rate (in the case of Fixed Rate Notes)
or new Spread and/or Spread Multiplier (in the case of Floating Rate Notes) for
the Extension Period, whether or not tendered for repayment.
If the Company extends the Stated Maturity of a Note, the holder of such
Note will have the option to elect repayment of such Note by the Company on the
old Stated Maturity at a price equal to the aggregate principal amount thereof
outstanding on, plus interest accrued to, such date or, for an Original Issue
Discount Note as described below under "-- Original Issue Discount Notes." In
order for a Note to be repaid on the old Stated Maturity once the Company has
extended the Stated Maturity thereof, the holder thereof must follow the
procedures set forth below under "-- Redemption and Repayment" for optional
repayment, except that (i) the period for delivery of such Note or notification
to the Trustee for such Note will be at least 25 but not more than 35 days prior
to the old Stated Maturity and (ii) a holder who has tendered a Note for
repayment pursuant to an Extension Notice may, by written notice to the Trustee,
revoke any such tender for repayment until the close of business on the tenth
day before the old Stated Maturity.
AMORTIZING NOTES
The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing Note
will be computed on the basis of a 360-day year of twelve 30-day months.
Payments with respect to Amortizing Notes will be applied first to interest due
and payable thereon and then to the reduction of the unpaid principal amount
thereof. Further information concerning additional terms and provisions of
Amortizing Notes will be specified in the applicable Pricing Supplement. A table
setting forth repayment information in respect of each Amortizing Note will be
included in the applicable Pricing Supplement and set forth in each such Note.
ORIGINAL ISSUE DISCOUNT NOTES
The Company may offer Original Issue Discount Notes from time to time. Such
Original Issue Discount Notes may currently pay no interest or interest at a
rate that at the time of issuance is below market rates. In the event of
redemption, repayment or acceleration of Maturity in respect of an Original
Issue Discount Note, the amount payable to the holder of such Original Issue
Discount Note will be equal to (i) the Amortized Face Amount (as defined below)
as of the date of such event, plus (ii) with respect to any redemption of an
Original Issue Discount Note, the Initial Redemption Percentage specified in the
applicable Pricing Supplement (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) minus 100% multiplied by the issue price specified in
such Pricing Supplement (the "Issue Price"), net of any portion of such Issue
Price that has been paid prior to the date of redemption, or the portion of the
Issue Price (or the net amount) proportionate to the portion of the unpaid
principal amount to be redeemed, plus (iii) any accrued interest to the date of
such event, the payment of which would constitute qualified stated interest
payments within the meaning of Treasury Regulation Section 1.1273-1(c) under the
Internal Revenue Code of 1986, as amended (the "Code"), plus (iv) with respect
to any redemption of an Original Issue Discount Note, unless otherwise specified
in the applicable Pricing Supplement, the Make-Whole Premium calculated as
described under "-- Redemption and Repayment." The accrued interest described in
clause (iii) above will be computed on the basis of a 360-day year of twelve
30-day months, compounded semiannually.
If any Maturity of an Original Issue Discount Note that bears no interest
falls on a day that is not a Business Day with respect to such Original Issue
Discount Note, the payment due at such Maturity will be made on the following
day that is a Business Day with the same force and effect as if it were made on
the date such payment was due, and no interest shall accrue on the amount so
payable for the period from and after such Maturity.
The "Amortized Face Amount" of an Original Issue Discount Note means an
amount equal to (i) the Issue Price thereof plus (ii) the aggregate portions of
the original issue discount (the excess of the amounts considered as part of the
"stated redemption price at maturity" of such Original Issue Discount
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Note within the meaning of Section 1273(a)(2) of the Code, whether denominated
as principal or interest, over the Issue Price) that shall theretofore have
accrued pursuant to Section 1272 of the Code (without regard to Section
1272(a)(7) of the Code) from the date of issue of such Original Issue Discount
Note to the date of determination, minus (iii) any amount considered as part of
the "stated redemption price at maturity" of such Original Issue Discount Note
that has been paid from the date of issue to the date of determination. Certain
additional considerations relating to the offering of any Original Issue
Discount Notes may be set forth in the applicable Pricing Supplement.
If a bankruptcy case is commenced by or against the Company under the
United States Bankruptcy Code (the "Bankruptcy Code"), it is possible that a
portion of the face amount of an Original Issue Discount Note would be treated
as interest and the unamortized portion thereof would be treated as unmatured
interest under Section 502(b)(2) of the Bankruptcy Code. Unmatured interest is
not allowable as part of a claim under Section 502(b)(2) of the Bankruptcy Code.
Although it is impossible to predict what portion, if any, of the face amount of
an Original Issue Discount Note would be treated as unmatured interest, one
possible result is that the bankruptcy court might determine the amount of
unmatured interest on such Note by reference to the amount of amortized original
issue discount of such Note for tax purposes, the unamortized debt discount of
such Note for financial accounting purposes or the Yield to Maturity (if any)
set forth on the face of an Original Issue Discount Note. Each method may yield
a substantially different result.
Holders of Notes with original issue discount will be required to include
the amount of original issue discount in income in accordance with applicable
provisions of the Code and the Treasury Regulations promulgated thereunder. See
"Certain United States Federal Income Tax Considerations -- U.S.
Holders -- Original Issue Discount."
INDEXED NOTES
Notes may be issued with the amount of principal (and premium, if any)
and/or any interest payable in respect thereof to be determined with reference
to the price or prices of specified commodities or stocks, the exchange rate of
one or more specified currencies (including a composite currency such as the
ECU) relative to an indexed currency or other price or exchange rate ("Indexed
Notes"), as set forth in the applicable Pricing Supplement. In certain cases,
holders of Indexed Notes may receive a principal amount on the Maturity Date
that is greater than or less than the face amount of the Notes depending upon
the relative value on the Maturity Date of the specified indexed item.
Information as to the method for determining the amount of principal (and
premium, if any) and/or any interest payable in respect of Indexed Notes,
certain historical information with respect to the specified indexed item and
tax considerations associated with an investment in such Indexed Notes will be
set forth in the applicable Pricing Supplement. See also "Certain Investment
Considerations."
OTHER PROVISIONS; ADDENDA
Any provisions with respect to the Notes, including the determination of an
Interest Rate Basis, the calculation of the interest rate applicable to a
Floating Rate Note, and the specification of one or more Interest Rate Bases,
the Interest Payment Dates, the Maturity Date or any other variable term
relating thereto, may be modified as specified under "Other Provisions" on the
face of the Note or in an Addendum relating thereto, if so specified on the face
thereof and in the applicable Pricing Supplement.
BOOK-ENTRY SYSTEM
Upon issuance, all Fixed Rate Notes issued as Book-Entry Notes having the
same original issue date, interest rate, if any, amortization schedule, if any,
Stated Maturity and other terms, if any, will be represented by a single Global
Note and all Floating Rate Notes issued as Book-Entry Notes having the same
original issue date, Initial Interest Rate, Interest Rate Basis or Bases,
Interest Payment Period, Interest Payment Dates, Interest Reset Period, Interest
Reset Dates, Index Maturity, Spread and/or Spread Multiplier, if any, Minimum
Interest Rate, if any, Maximum Interest Rate, if any, Stated Maturity and
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other terms, if any, will be represented by a single Global Note. Each Global
Note representing Book-Entry Notes will be deposited with, or on behalf of, the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary. Except under circumstances described below, Book-Entry Notes will
not be exchangeable for Certificated Notes and will not otherwise be issuable in
definitive form. The Depositary currently only accepts Notes that have a
Specified Currency of U.S. dollars.
The Depositary has advised the Company and the Agents as follows: the
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. The Depositary was created to hold
securities of its participants ("Participants") and to facilitate the clearance
and settlement of securities transactions among its Participants in such
securities through electronic book-entry changes in accounts of the
Participants, thereby eliminating the need for physical movement of securities
certificates. The Depositary's Participants include securities brokers and
dealers (including the Agents), banks, trust companies, clearing corporations
and certain other organizations, some of which (and/or their representatives)
own the Depositary. Access to the Depositary's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly.
Upon the issuance of a Global Note, the Depositary will credit on its
book-entry registration and transfer system the accounts of persons held with it
with the respective principal amounts of the Notes represented by such Global
Note. Such accounts shall be designated by the Agent with respect to such Notes
or by the Company if such Notes are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Note will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests in such Global Note will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the
Depositary or its nominee (with respect to interests of Participants) and on the
records of Participants (with respect to interests of persons other than
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Note.
So long as the Depositary or its nominee is the registered owner of such
Global Note, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by such Global Note
for all purposes under the Indentures. Except as provided below, owners of
beneficial interests in a Global Note will not be entitled to have Notes
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of Notes in definitive form and will
not be considered the owners or holders thereof under the Indentures.
Principal (and premium, if any) and any interest payments on Notes
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Note representing such Notes. None of the Company, the Trustee, any
Paying Agent or the Registrar for such Notes will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial interests in such Global Note for such Notes or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
The Company expects that the Depositary for the Notes or its nominee, upon
receipt of any payment of principal, premium or interest, will credit
immediately Participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the Global Note
for such Notes as shown on the records of the Depositary or its nominee. The
Company also expects that payments by Participants to owners of beneficial
interest in such Global Note held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participants.
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If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Certificated Notes in exchange for the entire
Global Note representing such Notes. In addition, the Company may at any time
and in its sole discretion determine not to have the Notes represented by the
entire Global Note and, in such event, will issue Certificated Notes in exchange
for the entire Global Note representing such Notes. In any such instance, an
owner of a beneficial interest in a Global Note will be entitled to physical
delivery of Certificated Notes represented by such Global Note equal in
principal amount to such beneficial interest and to have such Certificated Notes
registered in its name. Certificated Notes will be issued as registered Notes in
denominations of $1,000 or any amount in excess thereof that is an integral
multiple of $1,000, unless otherwise specified by the Company.
REDEMPTION AND REPAYMENT
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be redeemable, at the option of the Company, at any time in whole or from
time to time in part, upon not less than 30 and not more than 60 days' notice
mailed to each holder of Notes to be redeemed at the holder's address appearing
in the Security Register, on any date prior to Maturity at a price (except for
any Original Issue Discount Note) equal to 100% of the unpaid principal amount
to be redeemed plus any accrued interest to the Redemption Date (subject to the
right of holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that is on or prior to the Redemption
Date) plus, with respect to Fixed Rate Notes, a Make-Whole Premium, if any.
The amount of the Make-Whole Premium with respect to any Note (or portion
thereof) to be redeemed will be equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the Redemption
Date, of:
(A) each interest payment that, but for such redemption, would have
been payable on the Note (or portion thereof) being redeemed on each
Interest Payment Date occurring after the Redemption Date (excluding any
accrued interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such redemption, would have
been payable at the final maturity of the Note (or portion thereof)
being redeemed;
over
(ii) the principal amount of the Note (or portion thereof) being
redeemed.
The present values of interest and principal payments referred to in clause
(i) above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a discount rate equal to the Treasury Yield (as defined below).
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided,
that if the Company fails to make such appointment at least 10 business days
prior to the Redemption Date, or if the institution so appointed is unwilling or
unable to make such calculation, such calculation will be made by Salomon
Brothers Inc or, if such firm is unwilling or unable to make such calculation,
by an independent investment banking institution of national standing appointed
by the Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means
a rate of interest per annum equal to the weekly average yield to maturity of
United States Treasury Notes that have a constant maturity that corresponds to
the remaining term to maturity of the Notes, calculated to the nearest 1/12 of
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a year (the "Remaining Term"). The Treasury Yield will be determined as of the
third Business Day immediately preceding the applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent H.15(519). If the H.15(519) sets
forth a weekly average yield for United States Treasury Notes having a constant
maturity that is the same as the Remaining Term, then the Treasury Yield will be
equal to such weekly average yield. In all other cases, the Treasury Yield will
be calculated by interpolation, on a straight-line basis, between the weekly
average yields on the United States Treasury Notes that have a constant maturity
closest to and greater than the Remaining Term and the United States Treasury
Notes that have a constant maturity closest to and less than the Remaining Term
(in each case as set forth in the H.15(519)). Any weekly average yields so
calculated by interpolation will be rounded to the nearest 1/100 of 1%, with any
figure of 1/200 of 1% or above being rounded upward. If weekly average yields
for United States Treasury Notes are not available in the H.15(519) or
otherwise, then the Treasury Yield will be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.
If less than all of the Notes with like tenor and terms are to be redeemed,
the Trustee will select the Notes to be redeemed pro rata or by lot. The Trustee
may select for redemption Notes and portions of Notes in amounts of U.S. $1,000
or 1,000 units of the Specified Currency or whole multiples thereof, provided
that if all of the Notes of a holder are to be redeemed, the entire outstanding
amount of Notes held by such holder, even if not a whole multiple of U.S. $1,000
or 1,000 units of the Specified Currency, will be redeemed. With respect to the
redemption of Global Notes, the Depositary advises that if less than all of the
Notes with like tenor and terms are to be redeemed, the particular interests (in
integral multiples of $1,000) in the Global Note representing the Notes to be
redeemed shall be selected by the Depositary's lottery procedures or by such
other method as the Trustee shall deem fair and appropriate at such Redemption
Date. Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be entitled to the benefit of any sinking fund or other mandatory
redemption provisions. Also see "-- Original Issue Discount Notes."
Unless optional repayment date or dates, if any, are fixed at the time of
sale and set forth in the applicable Pricing Supplement and in the applicable
Note (the "Optional Repayment Date"), the Notes will not be subject to repayment
by the Company at the option of the holders thereof prior to the Stated
Maturity. If any Optional Repayment Date is specified in the applicable Pricing
Supplement with respect to any Note, such Note (except any Original Issue
Discount Note) will be repayable on such Optional Repayment Date in whole or in
part in increments of U.S. $1,000 (or 1000 units of the Specified Currency) at
the option of the holder thereof at a price equal to 100% of the principal
amount to be repaid, together with any interest and premium payable thereon to
the Optional Repayment Date, unless otherwise specified in an applicable Pricing
Supplement. See also "-- Original Issue Discount Notes." In order for a Note to
be repaid, the Company must receive at its offices or agencies for that purpose
in The City of New York not more than 60 nor less than 30 days prior to the
Optional Repayment Date, (i) the Note with the form entitled "Option to Elect
Repayment" on the reverse of the Note duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
a trust company in the United States of America setting forth the name of the
holder of the Note, the principal amount of the Note, the amount of the Note to
be repaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Note to be repaid with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly completed will be
received by the Company not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter and such Note and form duly
completed are received by the Company by such fifth Business Day. Any such
notice received by the Company during such period shall be irrevocable. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Note for repayment will be determined by the Company, whose
determination will be final and binding.
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If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended, and any other securities
laws and regulations in connection with any such repayment.
CERTAIN INVESTMENT CONSIDERATIONS
An investment in Notes indexed, as to principal, premium and/or interest,
to one or more values of currencies (including exchange rates between
currencies), commodities or interest rate indices entails significant risks that
are not associated with similar investments in a conventional fixed-rate debt
security. If the interest rate of such a Note is so indexed, it may result in an
interest rate that is less than that payable on a conventional fixed-rate debt
security issued at the same time, including the possibility that no interest
will be paid, and, if the principal of and/or premium on such a Note is so
indexed, the amount of principal and/or premium payable in respect thereof may
be less than the original purchase price of such Note if allowed pursuant to the
terms thereof, including the possibility that no such amount will be paid. The
secondary market for such Notes will be affected by a number of factors,
independent of the creditworthiness of the Company and the value of the
applicable currency, commodity or interest rate index, including the volatility
of the applicable currency, commodity or interest rate index, the time remaining
to the maturity of such Notes, the amount outstanding of such Notes and market
interest rates. The value of the applicable currency, commodity or interest rate
index depends on a number of interrelated factors, including economic, financial
and political events, over which the Company has no control. Additionally, if
the formula used to determine the amount of principal, premium and/or interest
payable with respect to such Notes contains a multiple or leverage factor, the
effect of any change in the applicable currency, commodity or interest rate
index will be increased. The historical experience of the relevant currencies,
commodities or interest rate indices should not be taken as an indication of
future performance of such currencies, commodities or interest rate indices
during the term of any Note. The credit ratings assigned to the Company's
medium-term note program are a reflection of the Company's credit status and, in
no way, are a reflection of the potential impact of the factors discussed above,
or any other factors, on the market value of the Notes. Accordingly, prospective
investors should consult their own financial and legal advisors as to the risks
entailed by an investment in Indexed Notes and the suitability of Indexed Notes
in light of their particular circumstances.
SPECIAL PROVISIONS AND RISKS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated in other than United States dollars or ECUs will not be sold in, or
to residents of, the country issuing the Specified Currency in which the
particular Notes are denominated. The information set forth in this Prospectus
Supplement is directed to prospective purchasers who are United States residents
and, with respect to Note denominated in foreign currencies, is by necessity
incomplete. The Company disclaims any responsibility to advise prospective
purchasers who are residents of countries other than the United States with
respect to any matters that may affect the purchase, holding or receipt of
payments of principal of (and premium, if any) and any interest on the Notes.
Such persons should consult their own financial and legal advisors with regard
to such matters.
THIS PROSPECTUS SUPPLEMENT DOES NOT DESCRIBE ALL RISKS OF AN INVESTMENT IN
NOTES DENOMINATED IN A SPECIFIED CURRENCY OTHER THAN U.S. DOLLARS, EITHER AS
SUCH RISKS EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY
CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES
DENOMINATED IN SPECIFIED CURRENCIES OTHER THAN U.S. DOLLARS. SUCH NOTES ARE NOT
AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
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EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes denominated in Specified Currencies other than U.S.
dollars entails significant risks that are not associated with a similar
investment in a debt security denominated in U.S. dollars. Such risks include,
without limitation, the possibility of significant changes in the rate of
exchange between the U.S. dollar and the applicable Specified Currency and the
possibility of the imposition or modification of foreign exchange controls by
either the United States or foreign governments. Such risks generally depend on
events over which the Company has no control, such as economic and political
events and the supply and demand for the relevant currencies. In recent years,
rates of exchange between the U.S. dollar and certain foreign currencies have
been highly volatile and such volatility may be expected in the future.
Fluctuations in any particular exchange rate that have occurred in the past are
not necessarily indicative, however, of fluctuations in the rate that may occur
during the term of any Note. Depreciation of the Specified Currency applicable
to a Note against the U.S. dollar would result in a decrease in the U.S.
dollar-equivalent yield of such Note, in the U.S. dollar-equivalent value of the
principal and premium, if any, payable at Maturity of such Note, and, generally,
in the U.S. dollar-equivalent market value of such Note.
Governments have imposed, from time to time, exchange controls and may in
the future impose or revise exchange controls at or prior to the date on which
any payment of principal (or premium, if any) or interest on a Note is due,
which could affect exchange rates as well as the availability of the Specified
Currency on such date. Even if there are no exchange controls, it is possible
that the Specified Currency for any Note would not be available on the
applicable payment date due to other circumstances beyond the control of the
Company. In that event, the Company will make the required payment in respect of
such Note in U.S. dollars on the basis of the Market Exchange Rate on the second
Business Day prior to such payment or, if such Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate or
as otherwise specified in the applicable Pricing Supplement. See "Description of
Medium-Term Notes, Series A -- Payment Currency."
GOVERNING LAW; JUDGMENTS
The Indentures provide that the Notes will be governed by and construed in
accordance with the laws of the State of New York. If an action based on Notes
denominated in a Specified Currency other than U.S. dollars were commenced in a
court of the United States, such court could grant judgment relating to such
Notes in the Specified Currency or U.S. dollars. It is not clear, however,
whether, in granting such judgment, the rate of conversion into U.S. dollars
would be determined with reference to the date of default, the date judgment is
rendered or some other date. Under current New York law, a state court in the
State of New York rendering a judgment on a Note denominated in a Specified
Currency other than U.S. dollars would be required to render such judgment in
the Specified Currency in which such Note is denominated, and such judgment
would be converted into U.S. dollars at the exchange rate prevailing on the date
of entry of the judgment. Accordingly, holders of Notes denominated in a
Specified Currency other than U.S. dollars would bear the risk of exchange rate
fluctuations between the time the amount of the judgment is calculated and the
time such amount is converted from U.S. dollars into the applicable Specified
Currency.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) and possible differing
interpretations. This discussion deals only with Notes held as capital assets
and does not purport to deal with persons in special tax situations, such as
financial institutions, insurance companies, regulated investment companies,
dealers in securities or currencies, persons holding Notes as a hedge against
currency risks or as a position in a "straddle" for tax purposes, or persons
whose functional currency is not the U.S. dollar. This discussion also does not
deal with holders other than original purchasers (except where otherwise
specifically noted). Persons considering the purchase of the Notes should
consult their own tax advisors concerning the application of United States
Federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the Notes arising
under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof or (iii) an estate or trust the income of which is subject
to United States Federal income taxation regardless of its source. As used
herein, the term "non-U.S. Holder" means a holder of a Note that is not a U.S.
Holder.
U.S. HOLDERS
Payments of Interest
Payments of interest on a Note generally will be taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting).
Original Issue Discount
The following summary is a general discussion of the United States Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount ("OID"). The following
summary is based on the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and on certain final and temporary regulations (the "Final
OID Regulations") issued by the U.S. Department of Treasury (the "Treasury") on
January 27, 1994. The Final OID Regulations generally apply to debt instruments
issued on or after April 4, 1994. On December 15, 1994, certain proposed
regulations were issued by the Treasury (the "Proposed OID Regulations") that
interpret the original issue discount provisions of the Code primarily as they
apply to instruments with contingent interest. However, the Proposed OID
Regulations will not apply to instruments issued prior to such Regulations being
published in the Federal Register, which publication has not yet occurred. As a
result, the effect, if any, of the Proposed OID Regulations on a series of Notes
will be discussed in the applicable Pricing Supplement, if such regulations have
been finalized by the time such Pricing Supplement is issued.
For United States Federal income tax purposes, a Note will have OID to the
extent that the Note's stated redemption price at maturity exceeds its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date). The issue price of an
issuance of Notes equals the first offering price at which a substantial amount
of such Notes has been sold (ignoring sales to bond houses, brokers, or similar
persons or organizations acting in the capacity of underwriters, placement
agents, or wholesalers). The stated redemption price at maturity of a Note is
the sum of all payments due on the Note other than qualified stated interest
payments. "Qualified stated interest" is stated interest that is unconditionally
payable in cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate that appropriately accounts for the length of
the interval
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between payments. In addition, under the Final OID Regulations, if a Note bears
interest for one or more accrual periods at a rate below the rate applicable for
the remaining term of such Note (e.g., Notes with teaser rates or interest
holidays), and if the greater of either the resulting foregone interest on such
Note or any "true" discount on such Note (i.e., the excess of the Note's stated
principal amount over its issue price) equals or exceeds a specified de minimis
amount, then the stated interest on the Note would be treated as OID rather than
qualified stated interest.
Payments of qualified stated interest on a Note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Note issued with OID and a maturity of more than
one year must include OID in income as ordinary income over the term of the
Note, regardless of such U.S. Holder's regular method of tax accounting, or
subject to certain conditions, based on one or more interest indices. In
general, a U.S. Holder must include in gross income the sum of the daily
portions of OID that accrue on the Note for each day during the taxable year (or
portion of the taxable year) on which such U.S. Holder held the Note.
Accordingly, a U.S. Holder of a Note issued with OID will include in income
amounts attributable to OID before receiving cash attributable to that income.
To determine the "daily portion" of OID on any Note with OID, OID accruing
during an accrual period (generally, the period between dates on which interest
is paid) is divided by the number of days in the accrual period. An "accrual
period" may be of any length and the accrual periods may vary in length over the
term of the Note, provided that each accrual period is no longer than one year
and each scheduled payment of principal or interest occurs either on the final
day of an accrual period or on the first day of an accrual period. The amount of
OID accruing during an accrual period is generally determined by using a
constant yield to maturity method, and is equal to the excess of (i) the product
of the Note's adjusted issue price at the beginning of the accrual period and
its yield to maturity (determined on the basis of compounding at the close of
each accrual period and approximately adjusted to take into account the length
of the particular accrual period) over (ii) the amount of any qualified stated
interest payments allocable to the accrual period. The Note's "adjusted issue
price" at the beginning of any accrual period generally equals the sum of the
issue price of the Note plus the aggregate amount of OID accrued on the Note in
all prior accrual periods, reduced by the amount of payments on the Note in
prior accrual periods that were not qualified stated interest payments. Under
these rules, U.S. Holders generally will have to include in income increasingly
greater amounts of OID in successive accrual periods.
A U.S. Holder of a Note with OID that purchases the Note for an amount that
is greater than the Note's adjusted issue price as of the purchase date but less
than or equal to the sum of all amounts payable on the Note after the purchase
date other than payments of qualified stated interest, will be considered to
have purchased the Note at an "acquisition premium." Under the acquisition
premium rules, the amount of OID that such U.S. Holder must include in its gross
income with respect to such Note for any taxable year (or portion thereof in
which the U.S. Holder holds the Note) will be reduced (but not below zero) by
the portion of the acquisition premium properly allocable to the period.
Under the Final OID Regulations, Floating Rate Notes are either treated as
variable rate debt instruments or contingent payment debt obligations and are
subject to special rules. A Note is a "variable rate debt instrument" if (a) its
issue price does not exceed the total noncontingent principal payments due under
the Note by more than a specified de minimis amount and (b) it provides for
stated interest, paid or compounded at least annually, at current values of (i)
one or more qualified floating rates, (ii) a single fixed rate and one or more
qualified floating rates, (iii) a single objective rate, or (iv) a single fixed
rate and a single objective rate that is a qualified inverse floating rate.
A "qualified floating rate" is any floating rate that can reasonably be
expected to measure contemporaneous variations in the cost of newly borrowed
funds in the currency in which the note is denominated (for example, LIBOR).
Although a multiple of a qualified floating rate will generally not constitute a
qualified floating rate, a variable rate equal to the product of a qualified
floating rate and a fixed multiple that is greater than zero but not more than
1.35 will constitute a qualified floating rate. A variable rate equal to the
product of a qualified floating rate and a fixed multiple that is greater than
zero
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<PAGE> 27
but not more than 1.35, increased or decreased by a fixed rate, will also
constitute a qualified floating rate. In addition, under the Final OID
Regulations, two or more qualified floating rates that can reasonably be
expected to have approximately the same values throughout the term of the note
together will constitute a single qualified floating rate. Two or more qualified
floating rates will be conclusively presumed to meet the requirements of the
preceding sentence if the value of all rates on the issue date are within 25
basis points of each other.
The Final OID Regulations provide that an otherwise qualified floating rate
that has restrictions will not be a qualified floating rate unless the
restrictions fall into one of the following categories: (a) a cap, a floor or a
periodic adjustment restriction (a "governor") that is fixed throughout the term
of the note, (b) a cap or similar restriction that is not reasonably expected as
of the issue date significantly to decrease the yield on the note, (c) a floor
or similar restriction that is not reasonably expected as of the issue date to
significantly increase the yield on the note, or (d) a governor or similar
restriction that is not reasonably expected as of the issue date significantly
to increase or decrease the yield on the note. Floating Rate Notes subject to
caps, floors, or governors that do not meet the above requirements could be
treated as debt instruments providing for contingent payments.
An "objective rate" is a rate other than a qualified floating rate, that is
determined by a single fixed formula and is based on (i) one or more qualified
floating rates, (ii) one or more rates each of which would be a qualified
floating rate for a debt instrument denominated in a currency other than the
currency in which the Note is denominated, (iii) the yield or the changes in the
price of one or more items of actively traded personal property (other than
stock or debt of the issuer or a related party), (iv) a combination of these
objective rates, or (v) other rates designated from time to time by the Internal
Revenue Service (the "IRS"). Despite the foregoing, a variable rate of interest
on a Floating Rate Note will not constitute an objective rate if it is
reasonably expected that the average value of the rate during the first half of
the Floating Rate Note's term will be either significantly less than or
significantly greater than the average value of the rate during the final half
of the Note's term. A "qualified inverse floating rate" is any objective rate
that is equal to a fixed rate minus a qualified floating rate, and that
reasonably can be expected to inversely reflect contemporaneous variations in
the cost of newly borrowed funds disregarding permissible restrictions discussed
above in the definition of a qualified floating rate.
The Final OID Regulations also provide that if a variable rate debt
instrument provides for stated interest at a fixed rate for an initial period of
less than one year followed by a variable rate that is either a qualified
floating rate or an objective rate and if the variable rate on such instrument's
issue date is intended to approximate the fixed rate, then the fixed rate and
the variable rate together will constitute either a single qualified floating
rate or an objective rate, as the case may be. A fixed rate and a variable rate
will be conclusively presumed to meet the requirements of the preceding sentence
if the value of the variable rate on the issue date does not differ from the
value of the fixed rate by more than 25 basis points.
If a Floating Rate Note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof qualifies as a "variable rate debt instrument" under the Final OID
Regulations, then any stated interest on the Floating Rate Note which is
unconditionally payable in cash or property (other than debt instruments of the
issuer) at least annually will constitute qualified stated interest and will be
taxed accordingly. Thus, a Floating Rate Note that provides for stated interest
at either a single qualified floating rate or a single objective rate throughout
the term of the Floating Rate Note and that qualifies as a "variable rate debt
instrument" under the Final OID Regulations will generally not be treated as
having been issued with OID unless the Floating Rate Note is issued at a "true"
discount (i.e., at a price below the Floating Rate Note's stated principal
amount) in excess of a specified de minimis amount. OID on such a Floating Rate
Note arising from "true" discount is allocated to an accrual period using the
constant yield method described above by assuming that the variable rate is a
fixed rate equal to (i) in the case of a qualified floating rate or qualified
inverse floating rate, the value as of the issue date, of the qualified floating
rate or qualified inverse floating rate, or (ii) in the case of an objective
rate (other than a qualified inverse floating rate), a fixed rate that reflects
the yield that is reasonably expected for the Floating Rate Note.
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<PAGE> 28
Special tax considerations (including possible original issue discount) may
arise with respect to Floating Rate Notes providing for (i) one Interest Rate
Basis followed by one or more Interest Rate Bases, (ii) a single fixed rate
followed by a qualified floating rate, or (iii) a Spread Multiplier. Purchasers
of Floating Rate Notes with any of such features should carefully examine the
applicable Pricing Supplement and should consult their tax advisors with respect
to such a feature because the tax consequences will depend, in part, on the
particular terms of the purchased Note. Special rules may apply if a Floating
Rate Note bears interest at an objective rate and it is reasonably expected that
the average value of the rate during the first half of the Note's term will be
either significantly less than or significantly greater than the average value
of the rate during the final half of the Note's term. Special rules may also
apply if a Floating Rate Note is subject to a cap, floor, governor or similar
restriction that is not fixed throughout the term of the Note and is reasonably
expected as of the issue date to cause the yield on the Note to be significantly
less or more than the expected yield determined without the restriction.
To determine the amount and accrual of OID and qualified stated interest on
any other Floating Rate Note that qualifies as a "variable rate debt
instrument," the Final OID Regulations provide that the Floating Rate Note is to
be converted into a hypothetical "equivalent" fixed rate debt instrument that
has terms identical to the Floating Rate Note, except that the hypothetical
Floating Rate Note has fixed rates substituted for the qualified floating rates
or objective rate provided under the Floating Rate Note. Any objective rate
(other than a qualified inverse floating rate) provided for under the terms of
the Floating Rate Note is converted into a fixed rate that reflects the yield
that is reasonably expected for the Floating Rate Note. In the case of a
Floating Rate Note that qualifies as a "variable rate debt instrument" and
provides for stated interest at a fixed rate in addition to either one or more
qualified floating rates or a qualified inverse floating rate, the fixed rate is
initially converted into a qualified floating rate (or a qualified inverse
floating rate, if the Floating Rate Note provides for a qualified inverse
floating rate). Under such circumstances, the qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the Floating Rate Note as of the Floating Rate Note's
issue date is approximately the same as the fair market value of an otherwise
identical debt instrument that provides for either the qualified floating rate
or qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Floating Rate Note is then converted into an
"equivalent" fixed rate debt instrument in the manner described above.
Once the Floating Rate Note is converted into an "equivalent" fixed rate
debt instrument pursuant to the foregoing rules, the amount of OID and qualified
stated interest, if any, are determined for the "equivalent" fixed rate debt
instrument by applying the general OID rules to the equivalent fixed rate debt
instrument. A U.S. Holder of the Floating Rate Note will account for such OID
and qualified stated interest as if the U.S. Holder held the "equivalent" fixed
rate debt instrument. Appropriate adjustments will be made in each accrual
period in the amount of qualified stated interest or OID assumed to have been
accrued or paid with respect to the "equivalent" fixed rate debt instrument in
the event that such amounts differ from the actual amount of interest accrued or
paid on the Floating Rate Note during the accrual period.
If a Floating Rate Note does not qualify as a "variable rate debt
instrument" under the Final OID Regulations, then the Floating Rate Note would
be treated as a contingent payment debt obligation. As mentioned in the
introductory paragraph, it is not entirely clear under current law how a
Floating Rate Note would be taxed if such Note were treated as a contingent
payment debt obligation. The proper United States Federal income tax treatment
of Floating Rate Notes that are treated as contingent payment debt obligations
will be more fully described in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, (i) all of
the Notes may be redeemable at the option of the Company prior to their Stated
Maturity (a "call option") and/or (ii) certain of the Notes may be repayable at
the option of the holder prior to their Stated Maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Investors intending to purchase Notes with such features
should consult their own tax
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advisors, since the OID consequences will depend, in part, on the particular
terms and features of the purchased Notes.
Under the Final OID Regulations, the IRS can apply or depart from the Final
OID Regulations as necessary or appropriate to achieve a reasonable result where
a principal purpose in structuring a Note or applying the regulations described
above is to achieve a result that is unreasonable in light of the purpose of the
applicable statutes (which generally are intended to achieve the clear
reflection of income for both borrowers and lenders).
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, OID, de minimis OID, market
discount, de minimis market discount, and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium) that accrues on a debt
instrument by using the constant yield method applicable to OID, subject to
certain limitations and exceptions.
Subsequent Interest Periods and Extension of Maturity
If so specified in the Pricing Supplement relating to an issue of Notes,
the interest rate or Stated Maturity of such Notes may be reset or extended, at
the option of the Company. See "Description of Medium-Term Notes, Series
A -- Subsequent Interest Periods" and "-- Extension of Maturity." The treatment
of a holder of Notes with respect to which such an option has been exercised and
who does not elect to have the Company repay such Notes on the applicable
Optional Reset Date or "old" Stated Maturity date will depend on the terms
established for such Notes by the Company pursuant to the exercise of such
option ("revised terms"). Depending on the particular circumstances, such holder
may be treated as having surrendered such Notes for new Notes with the revised
terms in either a taxable exchange or a recapitalization qualifying for
nonrecognition of gain or loss.
Short-Term Notes
Notes that have a fixed maturity of one year or less ("Short-Term Notes")
will be treated as having been issued with OID. U.S. Holders that do not use the
accrual method of accounting for tax purposes generally will not be required to
recognize OID on Short-Term Notes until they receive payment on such Notes. U.S.
Holders on the accrual method, regulated investment companies, common trust
funds, and certain others, however, must accrue OID on Short-Term Notes on a
straight-line basis unless they elect to accrue the OID on a constant yield
basis with daily compounding. For this purpose, OID on a Short-Term Note is the
amount by which the total principal and interest payments on such Note exceed
its issue price. U.S. Holders may elect to include OID on Short-Term Notes in
income based on acquisition discount rather than OID. Acquisition discount is
the excess of a Short-Term Note's stated redemption price at maturity over the
U.S. Holder's basis in the Note. Gain recognized on the sale or exchange of a
Short-Term Note by a U.S. Holder that has not accrued OID or acquisition
discount on the Short-Term Note, to the extent attributable to accrued interest
and OID (or acquisition discount), is treated as ordinary income. Such a U.S.
Holder also must defer deductions for net interest expense on any borrowing
attributable to the Short-Term Note to the extent that the expense does not
exceed accrued but unrecognized interest and OID (or acquisition discount) on
the Note.
Amortizing Notes
Payments in respect of interest on an Amortizing Note will be includible as
described under "-- Payments of Interest" above. Amounts received in respect of
principal will reduce the U.S. Holder's basis in such Note. In the case of an
Amortizing Note that is also an Original Issue Discount Note, each payment
(other than a payment of qualified stated interest) is treated first as a
payment of original issue discount to the extent of the original issue discount
that has accrued as of the date of payment and has not been allocated to prior
payments and second as a payment of principal. Payments other than payments of
qualified stated interest reduce the holder's basis in the Note.
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Market Discount
If a U.S. Holder purchases a Note, other than a Note issued with OID, for
an amount that is less than its issue price (or, in the case of a subsequent
purchaser, its stated redemption price at maturity) or purchases a Note issued
with OID for an amount that is less than the Note's adjusted issue price as of
the purchase date, the amount of the difference will be treated as "market
discount". A Note is not treated as purchased at a market discount, however, if
the market discount is less than 1/4 of 1 percent of the stated redemption price
at maturity (or the adjusted issue price in the case of a Note issued with OID)
multiplied by the number of complete years remaining to maturity ("de minimis
market discount").
A U.S. Holder of a Note purchased at a market discount (other than a de
minimis market discount) will be required to treat any partial principal payment
(or, in the case of a Note issued with OID, any payment that does not constitute
qualified stated interest) on, or any gain realized on the sale, exchange,
retirement or other disposition of, a Note as ordinary income to the extent of
the lesser of (i) the amount of such payment or realized gain or (ii) the market
discount that has not previously been included in income and is treated as
having accrued on such Note at the time of such payment or disposition. Market
discount will be considered to accrue ratably during the period from the date of
acquisition to the maturity date of the Note, unless the U.S. Holder elects to
accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
its earlier disposition in a taxable transaction, because a current deduction is
only allowed to the extent the interest expense exceeds an allocable portion of
market discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a ratable or semiannual compounding basis),
in which case the rules described above regarding the treatment as ordinary
income of gain upon the disposition of the Note and upon the receipt of certain
cash payments and regarding the deferral of interest deductions will not apply.
Generally, such currently included market discount is treated as ordinary
interest for United States Federal income tax purposes. This election to include
market discount in income currently, once made, applies to all market discount
obligations acquired in or after the first taxable year to which the election
applies, and may not be revoked without the consent of the IRS.
Amortizable Bond Premium
If a U.S. Holder purchases a Note for an amount that is greater than its
stated redemption price at maturity, such U.S. Holder will be considered to have
purchased the Note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a constant yield
method over the remaining term of the Note and may reduce interest on the Note
otherwise required to be included in income during any taxable year by the
amortizable premium allocable to the taxable year. However, if the Note may be
optionally redeemed after the U.S. Holder acquires it at a price in excess of
its stated redemption price at maturity, special rules would apply that could
result in a deferral of the amortization of some bond premium until later in the
term of the Note. If the U.S. Holder does not make such an election, the premium
will decrease the gain or increase the loss otherwise recognized on disposition
of the Note. Amortized bond premium will reduce the U.S. Holder's basis in the
Note. An election to amortize bond premium will apply to certain other debt
instruments that the U.S. Holder acquired at a premium, and the election may
have different tax consequences depending on when the debt instruments were
issued or acquired.
Disposition of a Note
Except as discussed above and except to the extent that gain or loss is
attributable to accrued but unpaid qualified stated interest or accrued market
discount, upon the sale, exchange or retirement of a Note, a U.S. Holder
generally will recognize taxable gain or loss equal to the difference between
the amount realized on the sale, exchange or retirement of the Note and such
U.S. Holder's adjusted tax
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basis in the Note. A U.S. Holder's adjusted tax basis in a Note generally will
equal such U.S. Holder's initial investment in the Note increased by any OID
included in income (and accrued market discount or acquisition discount, if any,
if the U.S. Holder has included such market discount or acquisition discount in
income) and decreased by the amount of any payments previously received, other
than qualified stated interest payments, and by any amortized bond premium with
respect to such Note. Except as described above with respect to certain
Short-Term Notes or with respect to market discount that has not been included
as income, such gain or loss will be capital gain or loss and generally will be
long-term if the Note were held for more than one year.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to withholding of United States
Federal income tax on payment of principal, premium (if any) or interest
(including OID, if any) on a Note, unless such non-U.S. Holder directly or
indirectly owns at least 10% of the voting power in the Company's stock, or is a
controlled foreign corporation related to the Company or a bank receiving
interest described in section 881(c)(3)(A) of the Code, if the non-U.S. Holder
certifies, on IRS Form W-8 or other substantially similar form, that the Holder
is not a U.S. person. To qualify for the exemption from taxation, the last
United States payor in the chain of payment prior to payment to a non-U.S.
Holder (the "Withholding Agent") must have received in the year in which a
payment of interest or principal occurs, or in either of the two preceding
calendar years, a statement that (i) is signed by the beneficial owner of the
Note under penalties of perjury, (ii) certifies that such owner is not a U.S.
Holder and (iii) provides the name and address of the beneficial owner. The
statement may be made on an IRS Form W-8 or a substantially similar form, and
the beneficial owner must inform the Withholding Agent of any change in the
information on the statement within 30 days of such change. If a Note is held
through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement to
the Withholding Agent. However, in such case, the signed statement must be
accompanied by a copy of the IRS Form W-8 or the substitute form provided by the
beneficial owner to the organization or institution. The Treasury Department is
considering implementation of further certification requirements aimed at
determining whether the issuer of a debt obligation is related to holders
thereof.
If a non-U.S. Holder of a Note cannot satisfy the requirements of the
"portfolio interest" exception described above, payments of premium (if any) and
interest (including OID, if any) made to such non-U.S. Holder will be subject to
a 30% withholding tax unless the beneficial owner of the Note provides the
Company or its Paying Agent, as the case may be, with a properly executed (1)
IRS Form 1001 (or successor form) claiming an exemption from withholding under
the benefit of a tax treaty or (2) IRS Form 4224 (or successor form) stating
that interest paid on the Note is not subject to withholding tax because it is
effectively connected with the beneficial owner's conduct of a trade or business
in the United States.
If a non-U.S. Holder of a Note is engaged in a trade or business in the
United States and premium (if any) or interest (including OID, if any) on the
Note is effectively connected with the conduct of such trade or business, the
non-U.S. Holder, although exempt from the withholding tax discussed above, will
be subject to United States Federal income tax on such interest and OID, if any,
on a net income basis in the same manner as if it were a U.S. Holder. In
addition, if such holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% of its effectively connected earnings and profits for
the taxable year, subject to adjustments. For this purpose, such premium (if
any) and interest (including OID, if any) on a Note will be included in such
foreign corporation's earnings and profits.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes capital gain upon retirement or
disposition of a Note, provided the gain is not effectively connected with the
conduct of a trade or business in the United States by the non-U.S. Holder.
Additionally, a non-U.S. Holder who is a non-resident alien individual who is
present in the U.S. for 183 days or more during the taxable year when the sale
or exchange occurs may be subject to federal income taxation on the gain
realized on the disposition if certain other conditions are met. In that case,
the capital gain is generally subject to a 30% tax. Certain other exceptions may
be applicable, and a non-U.S.
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<PAGE> 32
Holder should consult its tax advisor in this regard. A Note held by an
individual who is not a citizen or resident of the United States (as defined for
United States Federal estate tax purposes) will not be subject to United States
Federal estate tax as a result of such individual's death, if at the time of
death the individual did not directly or indirectly own 10% or more of the total
combined voting power of the Company's stock, unless such individual held such
Note in connection with the conduct of a United States trade or business.
FOREIGN CURRENCY NOTES
The following summary relates to Notes that are denominated in a currency
or currency unit other than the U.S. dollar ("Foreign Currency Notes").
Payment of Interest. A U.S. Holder who uses the cash method of accounting
and who receives a payment of interest in a foreign currency with respect to a
Foreign Currency Note, other than an Original Issue Discount Note on which
original issue discount is accrued on a current basis (except to the extent any
qualified stated interest is received) or a Note on which market discount is
currently accrued, will be required to include in income the U.S. dollar value
of the foreign currency payment (determined on the date such payment is
received) regardless of whether the payment is in fact converted to U.S. dollars
at that time. Such U.S. dollar value will be the U.S. Holder's tax basis in the
foreign currency received. A cash method U.S. Holder who receives such a payment
in U.S. dollars pursuant to an option available under such Note will be required
to include the amount of such payment in income upon receipt.
To the extent the above paragraph is not applicable, a U.S. Holder will be
required to include in income the U.S. dollar value of the amount of interest
income (including original issue discount or market discount, but reduced by
acquisition premium and amortizable bond premium to the extent applicable) that
has accrued and is otherwise required to be taken into account with respect to a
Foreign Currency Note during an accrual period. Unless the U.S. Holder makes the
"Spot Rate Convention Election" discussed in the next paragraph, the U.S. dollar
value of such accrued income will be determined by translating such income at
the average rate of exchange for the accrual period or, with respect to an
accrual period that spans two taxable years, at the average rate for the partial
period within each taxable year. The average rate of exchange for the accrual
period (or partial period) is the simple average of the exchange rates for each
business day of such period (or other method if such method is reasonably
derived and consistently applied). Such U.S. Holder will recognize ordinary gain
or loss with respect to accrued interest income on the date such income is
received. The amount of ordinary gain or loss recognized will equal the
difference between the U.S. dollar value of the foreign currency payment
received determined on the date such payment is received in respect of such
accrual period and the U.S. dollar value of interest income that has accrued
during such accrual period (as determined above).
Spot Rate Convention Election. A U.S. Holder may elect to translate accrued
interest income into U.S. dollars at the exchange rate in effect on the last day
of an accrual period for the original issue discount, market discount or accrued
interest, or in the case of an accrual period that spans two taxable years, at
the exchange rate in effect on the last day of the taxable year. Additionally,
if a payment of such income is actually received within five business days of
the last day of the accrual period or taxable year, an electing U.S. Holder may
instead translate such income into U.S. dollars at the exchange rate in effect
on the day of actual receipt. Any such election will apply to all debt
instruments held by the U.S. Holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by the U.S. Holder, and may
not be revoked without the consent of the IRS.
Purchase, Sale, Exchange or Retirement. A U.S. Holder's tax basis in a
Foreign Currency Note will be the U.S. dollar value of the foreign currency
amount paid for such Foreign Currency Note, determined on the date of such
purchase, plus the foreign currency amount of any adjustment on account of
original issue discount, market discount, acquisition premium or bond premium. A
U.S. Holder who converts U.S. dollars to a foreign currency and immediately uses
that currency to purchase a Foreign Currency Note denominated in the same
currency normally will not recognize gain or loss in connection with such
conversion and purchase. However, a U.S. Holder who purchases a Foreign Currency
Note with
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<PAGE> 33
previously owned foreign currency will recognize ordinary income or loss in an
amount equal to the difference, if any, between such U.S. Holder's tax basis in
the foreign currency and the U.S. dollar fair market value of the Foreign
Currency Note on the date of purchase.
For purposes of determining the amount of any gain or loss recognized by a
U.S. Holder on the sale, exchange or retirement of a Foreign Currency Note, the
amount realized upon such sale, exchange or retirement will be the U.S. dollar
value of the foreign currency received, determined on the date of sale, exchange
or retirement. A U.S. Holder will have a tax basis in any foreign currency
received on the sale, exchange or retirement of a Foreign Currency Note equal to
the U.S. dollar value of such foreign currency, determined at the time of such
sale, exchange or retirement.
Gain or loss realized upon the sale, exchange or retirement of a Foreign
Currency Note that is attributable to fluctuations in currency exchange rates
will be ordinary income or loss. Such gain or loss will not be treated as
interest income or expense. Such foreign currency gain or loss will equal the
difference between (i) the U.S. dollar value of the foreign currency principal
amount of such Foreign Currency Note and any payment with respect to accrued
interest, determined on the date such Note is disposed of, and (ii) the U.S.
dollar value of the foreign currency principal amount of such Note, determined
on the date such U.S. Holder acquired such note, and the U.S. dollar value of
the accrued interest received, determined by translating such interest at the
average exchange rate for the accrual period or with reference to the "Spot Rate
Convention Election" as described above. The foreign currency principal amount
of a Foreign Currency Note generally equals the issue price in foreign currency
of such Note. Such foreign currency gain or loss will be recognized only to the
extent of the total gain or loss realized by a U.S. Holder on the sale, exchange
or retirement of the Foreign Currency Note. The source of such foreign currency
gain or loss will be determined by reference to the residence of the U.S. Holder
or the "qualified business unit" of the holder on whose books the Note is
properly reflected.
Any gain or loss recognized by such a holder in excess of such foreign
currency gain or loss will be capital gain or loss (except to the extent of any
accrued market discount or, in the case of a short-term Original Issue Discount
Note, any original issue discount to the extent such market discount or original
issue discount has not been previously included in the U.S. Holder's income).
The Section 988 Regulations provide a special rule for purchases and sales
of Foreign Currency Notes traded on an established securities market by a cash
basis taxpayer under which units of foreign currency paid or received are
translated into U.S. dollars at the spot rate on the settlement date of the
purchase or sale. Accordingly, no exchange gain or loss will result from
currency fluctuations between the trade date and the settlement of such a
purchase or sale. An accrual basis taxpayer may elect the same treatment
required of cash basis taxpayers with respect to purchases and sales of Foreign
Currency Notes traded on an established securities market provided the election
is applied consistently. Such election cannot be changed without the consent of
the IRS. Any gain or loss realized by a U.S. Holder on a sale or other
disposition of foreign currency (including its exchange for U.S. dollars or its
use to purchase Foreign Currency Notes) will be ordinary income or loss.
Original Issue Discount. Original issue discount for any accrual period on
an Original Issue Discount Note that is a Foreign Currency Note will be
determined in the relevant foreign currency and then translated into U.S.
dollars in the same manner as stated interest accrued by an accrual basis U.S.
Holder, as described above under "Payment of Interest." Upon the receipt of an
amount attributable to original issue discount (whether in connection with a
payment of interest or the sale or retirement of a Note), a U.S. Holder may
recognize ordinary income or loss.
Premium and Market Discount. In the case of a Foreign Currency Note, market
discount will be determined in the relevant foreign currency. The amount of
accrued market discount (other than market discount currently included in income
pursuant to an election by the holder) which is required to be recognized on the
disposition of the Note will be translated into U.S. dollars based on the
exchange rate on the disposition date. No part of such accrued market discount
will be treated as exchange gain or loss. Accrued market discount that a holder
elects to accrue into income currently is translated into U.S. dollars using the
average exchange rate in effect during the accrual period. In such case,
movement in
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<PAGE> 34
the exchange rate between the accrual date and disposition date will result in
exchange gain or loss at the time of the disposition with respect to the amount
of the market discount accrued.
In the case of a Foreign Currency Note, bond premium which the holder
elected to amortize or acquisition premium will be computed in the relevant
foreign currency and will reduce interest income or original issue discount
determined in such foreign currency. Exchange gain or loss will be realized with
respect to amortizable bond premium or acquisition premium by treating the
portion of the premium amortized with respect to any period as a return of
principal. The Section 988 Regulations provide that if a holder does not elect
to amortize bond premium, any loss realized on the sale, exchange or retirement
of a Foreign Currency Note will be capital loss to the extent of such bond
premium.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current U.S. federal income tax law, information reporting
requirements apply to certain payments of principal, premium and interest
(including OID) paid on Notes, and to the proceeds of sales of Notes made to
U.S. Holders, other than certain exempt recipients (such as corporations).
Backup withholding of the United States Federal income tax at a rate of 31% may
apply to payments made in respect of Notes to registered owners who are not
"exempt recipients" or who fail to comply with certain procedures for providing
certain identifying information (such as the registered owner's taxpayer
identification number) in the required manner.
Upon the sale of a Note to (or through) certain brokers, the broker must
withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is an exempt recipient or (ii) the seller provides,
in the required manner, certain identifying information and, in the case of a
non-U.S. Holder, certifies that such seller is a non-U.S. Holder (and certain
other conditions are met). Certification of the registered owner's non-U.S.
status would be made normally on an IRS Form W-8 under penalties of perjury,
although in certain cases it may be possible to submit other documentary
evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis by the Company through
Salomon Brothers Inc, BA Securities, Inc., NationsBanc Capital Markets, Inc. and
UBS Securities Inc., as Agents, each of whom has agreed to use its reasonable
best efforts to solicit purchases of the Notes. The Company will pay each Agent
a commission, in the form of a discount ranging from .125% to .750% of the
principal amount of any Note, depending upon maturity of the Note up to and
including 30 years, and as agreed upon at the time of sale for Notes with Stated
Maturities greater than 30 years, sold through such Agent. The Company also may
sell the Notes to one or more of the Agents as principal at a discount for
resale to investors or other purchasers at varying prices related to prevailing
market prices at the time of resale, to be determined by such Agent or, if so
agreed, at a fixed public offering price. In addition, the Company has reserved
the right to sell the Notes directly to investors on its own behalf in those
jurisdictions where it is authorized to do so or as otherwise provided in the
applicable Pricing Supplement. In the case of sales made directly by the
Company, no commission will be payable. The Company has agreed to reimburse the
Agents for certain expenses.
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers. The Agents may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing Supplement,
such discount allowed to any dealer will not be in excess of the discount to be
received by such Agent from the Company. Unless otherwise indicated in the
applicable Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount thereof
less a percentage equal to the commission applicable to any agency sale of a
Note of identical maturity, and may be resold by the Agent to investors and
other
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purchasers as described above. After the initial public offering of Notes to be
resold to investors and other purchasers on a fixed public offering price basis,
the public offering price (in the case of Notes to be sold at a fixed public
offering price), the concession and the discount may be changed.
The Company will have the sole right to accept offers to purchase Notes and
may reject any proposed purchase of Notes in whole or in part. Each Agent will
have the right, in its discretion reasonably exercised, to reject any offer to
purchase Notes received by it in whole or in part.
The Company has agreed to indemnify each Agent against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the "Act"),
or to contribute to payments such Agent may be required to make in respect
thereof. Each Agent may be deemed to be an "underwriter" within the meaning of
the Act.
Agents or their affiliates in the ordinary course of their business have
engaged and in the future may engage from time to time in transactions with and
perform services for the Company.
Affiliates of each of BA Securities, Inc., NationsBanc Capital Markets,
Inc. and UBS Securities Inc. are agent banks and lenders to the Company under
the Company's Credit Facilities. To the extent that the proceeds hereof are used
to repay such indebtedness, each such affiliate will receive its proportionate
share of any repayment by the Company of amounts outstanding under such Credit
Facilities from the proceeds of the offering of the Notes. Because more than 10%
of the net proceeds of this offering may be paid to such affiliates, each a
member of the National Association of Securities Dealers, Inc. (the "NASD") and
a participant in the distribution of the Notes, this offering is being made
pursuant to the provisions of Article III, Section 44(c)(8) of the NASD Rules of
Fair Practice.
Payment of the purchase price of the Notes will be required to be made in
immediately available funds on the date of settlement.
No Note will have an established trading market when issued. Unless
otherwise specified in the applicable Pricing Supplement, the Notes will not be
listed on any securities exchange. Each of the Agents may from time to time
purchase and sell Notes in the secondary market, but it is not obligated to do
so, and there can be no assurance that there will be a secondary market for the
Notes or liquidity in the secondary market if one develops. From time to time,
each of the Agents may make a market in the Notes.
Concurrently with the offering of Notes described herein, the Company may
issue other Debt Securities described in the accompanying Prospectus pursuant to
the Indentures.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by Andrews &
Kurth L.L.P., Houston, Texas, and for the Agents by Simpson Thacher & Bartlett
(a partnership which includes professional corporations), New York, New York.
The opinions of Andrews & Kurth L.L.P. and Simpson Thacher & Bartlett will be
conditioned upon, and subject to, certain assumptions as to future actions
required to be taken in connection with the issuance and sale of the Notes and
as to other events that may affect the validity of the Notes but which cannot be
ascertained on the date of such opinions.
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***************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED NOVEMBER 7, 1995
<TABLE>
<S> <C>
PROSPECTUS [UNION TEXAS LOGO]
UNION TEXAS PETROLEUM HOLDINGS, INC.
DEBT SECURITIES
</TABLE>
Union Texas Petroleum Holdings, Inc. (the "Company") may offer from time to time
unsecured debt securities ("Debt Securities") consisting of debentures, notes
and/or other evidences of unsecured indebtedness in one or more series, or any
combination of the foregoing, at an aggregate initial offering price not to
exceed $100,000,000, or its equivalent if some or all of the Debt Securities are
denominated in one or more foreign currencies, at prices and on terms to be
determined at or prior to the time of sale in light of market conditions at the
time of sale.
Specific terms of the particular Debt Securities in respect of which this
Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the terms
of the offering of the Debt Securities and the initial price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Debt Securities, without limitation, the
following: the specific designation, aggregate principal amount, ranking as
senior debt or subordinated debt, authorized denomination, maturity, rate or
method of calculation of interest and dates for payment thereof, any
exchangeability, conversion, redemption, prepayment or sinking fund provisions,
the currency or currencies or currency unit or currency units in which
principal, premium, if any, or interest, if any, is payable, any modifications
of or additions to the covenants described in this Prospectus and any other
specific terms thereof. The Company's obligations under the Debt Securities will
not be guaranteed by any of its subsidiaries. The amounts payable by the Company
in respect of Debt Securities may be calculated by reference to the value, rate
or price of one or more specified commodities, currencies or indices to the
extent set forth in the Prospectus Supplement. The Prospectus Supplement will
also contain information, where applicable, about certain United States federal
income tax considerations relating to the Debt Securities covered by the
Prospectus Supplement.
The Company may sell the Debt Securities directly, through agents designated
from time to time or through underwriters or dealers. If any agents of the
Company or any underwriters or dealers are involved in the sale of the Debt
Securities, the names of such agents, underwriters or dealers, any applicable
commissions and discounts, and the net proceeds to the Company will be set forth
in the applicable Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for agents, underwriters and dealers.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is , 1995.
<PAGE> 37
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IN
CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT, AND, IF GIVEN OR MADE, ANY SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY DEBT SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
AVAILABLE INFORMATION
Union Texas Petroleum Holdings, Inc. is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at certain of the Commission's Regional Offices located at 7
World Trade Center, 13th Floor, New York, NY 10048 and 500 West Madison Street,
Suite 1400, Chicago, IL 60661. Copies of such materials can be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. In addition, the
Company's common stock, par value $.05 per share, is listed on the New York
Stock Exchange and the Pacific Stock Exchange, and the Company's 8.25% Senior
Notes due 1999 (the "8.25% Senior Notes") are listed on the New York Stock
Exchange. The Company's reports, proxy statements and other information filed
under the Exchange Act may also be inspected and copied at the offices of the
New York Stock Exchange, 20 Broad Street, New York, NY 10005 and the Pacific
Stock Exchange, 301 Pine Street, San Francisco, CA 94104.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement and to the
exhibits and schedules filed therewith. All of these documents may be inspected
without charge at the Commission's principal office in Washington, D.C., and
copies thereof may be obtained from the Commission at the prescribed rates or
may be examined without charge at the public reference facilities of the
Commission.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-9019)
pursuant to the Exchange Act are incorporated herein by reference: the Company's
Annual Report on Form 10-K for the year ended December 31, 1994; its Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and
September 30, 1995 and its Current Reports on Form 8-K filed January 20, 1995,
February 7, 1995, February 22, 1995, March 16, 1995, March 17, 1995, April 10,
1995, April 28, 1995, May 4, 1995, May 18, 1995, June 28, 1995, July 14, 1995,
July 25, 1995, July 28, 1995, August 18, 1995, September 25, 1995 and October 2,
1995.
All other documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of any series of Debt Securities shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified shall not be deemed to constitute a part of this Prospectus except as
so modified, and any statement so superseded shall not be deemed to constitute
part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all documents which
are incorporated herein by reference, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests should be directed to the Company, at its principal
executive offices at 1330 Post Oak Boulevard, Houston, TX 77056, Attention:
Corporate Secretary, telephone (713) 623-6544.
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Quantities of natural gas are expressed in this Prospectus in terms of
thousand cubic feet ("Mcf"), million cubic feet ("MMcf") or billion cubic feet
("Bcf"). Oil is quantified in terms of barrels ("Bbls"). Gas is converted into a
barrel of oil equivalent ("boe") based on 5.8 Mcf of gas to one barrel of oil.
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<PAGE> 38
THE COMPANY
The Company, the successor to a corporation founded in 1896, is an
independent (non-integrated) oil and gas company with worldwide operations. At
December 31, 1994, the Company had net proved oil and gas reserves of 411
million boe. In addition, the Company recorded approximately 45 million boe of
proved reserves as of July 1, 1995 as a result of the Company's acquisition of
an interest in Block 16/26 in the central U.K. North Sea, which includes the
Alba field. The Company's average net daily oil and gas production during the
first nine months of 1995 was approximately 50,000 Bbls and 409 MMcf,
respectively. Substantially all of the Company's oil and gas activities are
currently conducted outside of the United States, primarily in Indonesia, the
U.K. sector of the North Sea and Pakistan. The Company participates worldwide in
new venture exploration for oil and gas. The Company also owns an interest in a
U.S.-based petrochemical business.
As used herein, the "Company" means Union Texas Petroleum Holdings, Inc.
and its subsidiaries unless the context requires otherwise. Two limited
partnerships organized and controlled by an affiliate of Kohlberg Kravis Roberts
& Co. own approximately 25% of the Company's issued and outstanding common
stock. The address and telephone number of the Company's principal executive
offices are 1330 Post Oak Boulevard, Houston, TX 77056, (713) 623-6544.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debt
Securities for general corporate purposes, which may include the repayment of
outstanding indebtedness. Pending application, such proceeds may be invested in
short-term obligations or qualified government or marketable securities. Any
specific allocations of the proceeds to a particular purpose that have been made
at the date of any Prospectus Supplement will be described therein.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges was as follows for the
years and periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
- ---------------------------------------- --------------
1990 1991 1992 1993 1994 1994 1995
- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
3.47 4.94 7.93 1.61 7.31 7.49 5.91
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of pretax income plus fixed charges (excluding interest capitalized
during the period). Fixed charges consist of interest expense, capitalized
interest, amortization of discount and financing costs and the portion of rent
expense which is deemed to be representative of the interest component of rent
expense. During the third quarter of 1993, the Company recorded a non-cash
charge to depreciation, depletion and amortization of $103 million pretax ($48
million after-tax) for the write-down of its investment in the U.K. North Sea's
Piper field. Excluding the effect of the Piper write-down, the ratio of earnings
to fixed charges for 1993 would have been 4.45.
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<PAGE> 39
DESCRIPTION OF THE DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate ("Offered Debt Securities"). The particular terms of the Offered Debt
Securities and the extent to which such general provisions may apply will be
described in a Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities will be general unsecured obligations of the Company
and will constitute either senior debt securities or subordinated debt
securities. In the case of Debt Securities that will be senior debt securities
("Senior Debt Securities"), the Debt Securities will be issued under an
Indenture, as amended (the "Senior Indenture") between the Company and The First
National Bank of Chicago, as trustee under the Senior Indenture. In the case of
Debt Securities that will be subordinated debt securities ("Subordinated Debt
Securities"), the Debt Securities will be issued under an Indenture (the
"Subordinated Indenture") to be entered into between the Company and The First
National Bank of Chicago, as trustee under the Subordinated Indenture. The
Senior Indenture and the Subordinated Indenture are sometimes hereinafter
referred to individually as an "Indenture" and collectively as the "Indentures."
Copies of the Senior Indenture and the form of the Subordinated Indenture have
been filed or incorporated by reference as exhibits to the Registration
Statement. The First National Bank of Chicago, as trustee under each of the
Indentures (and any successor thereto under each Indenture), is referred to
herein as the "Trustee." The statements under this caption relating to the Debt
Securities and the Indentures are summaries only and do not purport to be
complete. Such summaries make use of terms defined in the Indentures. Wherever
such terms are used herein or particular provisions of an Indenture are referred
to, such terms or provisions, as the case may be, are incorporated by reference
as part of the statements made herein, and such statements are qualified in
their entirety by such reference. Certain defined terms in the Indentures are
capitalized herein. The italicized references below apply to the article or
section numbers in the Senior Indenture and Subordinated Indenture,
respectively, or to both Indentures if only one reference is provided, unless
otherwise indicated.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
The Indentures do not limit the aggregate principal amount of Debt
Securities that can be issued thereunder and provide that Debt Securities may be
issued from time to time thereunder in one or more series, each in an aggregate
principal amount authorized by the Company prior to issuance. The Debt
Securities may be issued at various times with different maturity dates and
different principal repayment provisions, may bear interest at different rates,
may be payable in currencies other than United States dollars, in composite
currencies or in amounts determined by reference to the price, rate or value of
one or more specified commodities, currencies or indices, and may otherwise
vary, all as provided in the Indentures. The Company has from time to time
entered into, and will in the future enter into, credit agreements to fund its
operations, herein referred to collectively as the "Credit Facilities." Such
credit agreements may be secured by the assets of the Company, secured by the
assets of subsidiaries of the Company or guaranteed by subsidiaries of the
Company. To the extent that the Credit Facilities are so secured or guaranteed,
the lenders under such Credit Facilities may have priority over the holders of
the Debt Securities with respect to the assets of the Company or its
subsidiaries that secure such Credit Facilities and may have priority over the
holders of the Debt Securities.
General. Unless otherwise indicated in a Prospectus Supplement, the Debt
Securities will not benefit from any covenant or other provision that would
afford holders of such Debt Securities special protection in the event of a
highly leveraged transaction involving the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Offered Debt Securities: (i) the title and aggregate principal
amount of the Offered Debt Securities; (ii) the date or dates on which the
Offered Debt Securities will mature; (iii) the rate or rates (which may be fixed
or variable) per annum, if any, at which the Offered Debt Securities will bear
interest or the method of determining such rate or rates; (iv) the date or dates
from which such interest, if any, will accrue and the date or dates at which
such interest, if any, will be payable; (v) the terms for redemption or early
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<PAGE> 40
payment, if any, including any mandatory or optional sinking fund or analogous
provision; (vi) the terms for conversion or exchange, if any, of the Offered
Debt Securities; (vii) whether, and the extent to which, the Company's
obligations under the Offered Debt Securities will be guaranteed by any of the
Company's subsidiaries; (viii) whether such Offered Debt Securities will be
issued in fully registered form or in bearer form or any combination thereof;
(ix) whether such Offered Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be issuable in
temporary global form or permanent global form; (x) information with respect to
book-entry procedures, if any; (xi) the currency, currencies or currency unit or
units in which such Offered Debt Securities will be denominated and in which the
principal of, and premium and interest, if any, on such Offered Debt Securities
will be payable; (xii) whether, and the terms and conditions on which, the
Company or a holder may elect that, or the other circumstances under which,
payment of principal of, or premium or interest, if any, on such Offered Debt
Securities is to be made in a currency or currencies or currency unit or units
other than that in which such Offered Debt Securities are denominated; (xiii)
any index or formula to be used to determine the amount of payments of principal
of (and premium, if any) and interest on such Offered Debt Securities and any
commodities, currencies, currency units or indices, or value, rate or price,
relevant to such determination; and (xiv) any other specific terms of the
Offered Debt Securities. (Section 301) Reference is also made to the applicable
Prospectus Supplement for information with respect to (x) the classification of
the Offered Debt Securities as Senior Debt Securities or Subordinated Debt
Securities, (y) the price (expressed as a percentage of the aggregate principal
amount of the Offered Debt Securities) at which the Offered Debt Securities will
be issued, if other than 100 percent, and (z) any additional covenants that may
be included in the terms of the Offered Debt Securities.
No service charge will be made for any registration of transfer or exchange
of the Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Section 305)
The Company currently conducts all of its operations through subsidiaries,
and the holders of Debt Securities will generally have a junior position to any
claims of creditors and any preferred stockholders of the Company's
subsidiaries. Claims of creditors of such subsidiaries, including trade
creditors, secured creditors, taxing authorities and creditors holding
guarantees, and claims of holders of any preferred stock will generally have
priority as to the assets of such subsidiaries over the claims and equity
interests of the Company and, thereby, indirectly, the holders of indebtedness
of the Company, including the Debt Securities. See "-- Provisions Applicable
Solely to Senior Debt Securities."
Offered Debt Securities may be sold at a discount (which may be
substantial) below their stated principal amount bearing no interest or interest
at a rate which at the time of issuance is below market rates. Any material
United States federal income tax consequences and other special considerations
applicable thereto will be described in the Prospectus Supplement relating to
any such Offered Debt Securities.
If any of the Offered Debt Securities are sold for any foreign currency or
currency unit or if the principal of, or premium or interest, if any, on any of
the Offered Debt Securities is payable in any foreign currency or currency unit,
the restrictions, elections, tax consequences, specific terms and other
information with respect to such Offered Debt Securities and such foreign
currency or currency unit will be set forth in the Prospectus Supplement
relating thereto.
Covenants. The Indentures require the Company to covenant, among other
things, with respect to each series of Debt Securities: (i) to duly and
punctually pay the principal of (and premium, if any) and interest, if any, on
such series of Debt Securities; (ii) to maintain an office or agency in each
Place of Payment where Debt Securities may be presented or surrendered for
payment, transferred or exchanged and where notices to the Company may be
served; (iii) if the Company shall act as its own Paying Agent for any series of
Debt Securities, to segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest, if any, so becoming due; (iv) to deliver to the Trustee, within 120
days after the end of each fiscal year, a written statement to the effect that
the Company has fulfilled all its obligations under the Indentures throughout
such year; (v) to
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<PAGE> 41
preserve its corporate existence; (vi) to maintain its properties; and (vii) to
pay taxes and other claims, in each case, as required by the Indentures.
(Article Eleven; Article Ten)
Events of Default. Unless otherwise provided with respect to any series of
Debt Securities, the following are Events of Default under each Indenture with
respect to the Debt Securities of such series issued under the Indenture: (a)
failure to pay principal of (or premium, if any, on) any Debt Security of such
series when due; (b) failure to pay any interest on any Debt Security of such
series when due, continued for 30 days; (c) failure to deposit any mandatory
sinking fund payment, when due, in respect of the Debt Securities of such
series; (d) failure to perform any other covenant of the Company in the
applicable Indenture (other than a covenant included in the applicable Indenture
for the benefit of a series of Debt Securities other than such series),
continued for 60 days after written notice as provided in the applicable
Indenture; (e) certain events of bankruptcy, insolvency or reorganization; and
(f) any other Event of Default as may be established with respect to Debt
Securities of such series (including, without limitation, any Event of Default
arising out of a default which results in the acceleration of certain
Indebtedness or a default in the payment of any amounts due on certain
Indebtedness). (Sections 301 and 601; Sections 301 and 501) If an Event of
Default with respect to any outstanding series of Debt Securities occurs and is
continuing, either the Trustee or the holders of at least 25% in principal
amount of the outstanding Debt Securities of such series (subject to the
following sentence, in the case of an Event of Default described in clause (a),
(b), (c) or (f) above) or at least 25% in principal amount of all outstanding
Debt Securities under the Indenture (subject to the following sentence, in the
case of other Events of Default) may declare the principal amount of all the
Debt Securities of the applicable series (or of all outstanding Debt Securities
under the applicable Indenture, as the case may be) to be due and payable
immediately. If an Event of Default described in clause (e) shall occur, the
principal amount of the Debt Securities of all series ipso facto shall become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any holder. At any time after a declaration of
acceleration has been made, but before a judgment has been obtained, the holders
of a majority in principal amount of the outstanding Debt Securities of such
series (or all outstanding Debt Securities under the applicable Indenture, as
the case may be) may, under certain circumstances, rescind and annul such
acceleration. (Section 602; Section 502) Depending on the terms of other
Indebtedness of the Company outstanding from time to time, an Event of Default
under an Indenture may give rise to cross defaults on such other Indebtedness of
the Company.
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, give to the
holders of the Debt Securities of such series notice of all uncured and unwaived
defaults known to it; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or any interest on, or
any sinking fund installment with respect to, any Debt Securities of such
series, the Trustee will be protected in withholding such notice if it in good
faith determines that the withholding of such notice is in the interest of the
holders of the Debt Securities of such series; and provided, further, that such
notice shall not be given until at least 30 days after the occurrence of a
default in the performance, or breach, of any covenant or warranty of the
Company under such Indenture other than for the payment of the principal of (or
premium, if any) or any interest on, or any sinking fund installment with
respect to, any Debt Securities of such series. For the purpose of this
provision, "default" with respect to Debt Securities of any series means any
event which is, or after notice or lapse of time, or both, would become, an
Event of Default with respect to the Debt Securities of such series. (Section
702; Section 602)
The holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) have the right, subject to certain limitations,
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series (or of all
outstanding Debt Securities under the applicable Indenture). (Section 612;
Section 512) Each Indenture provides that in case an Event of Default shall
occur and be continuing with respect to the Debt Securities of any series, the
Trustee shall exercise such of its rights and powers under the applicable
Indenture and use the same degree of care and skill in their exercise as
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<PAGE> 42
a prudent person would exercise or use under the circumstances in the conduct of
his own affairs. (Section 701; Section 601) Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under either Indenture at the request of any of the holders of the Debt
Securities unless they shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request. (Section 703; Section 603)
The holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) may on behalf of the holders of all Debt
Securities of such series (or of all outstanding Debt Securities under the
applicable Indenture) waive any past default under the Indenture, except a
default in the payment of the principal of (or premium, if any) or interest on
any Debt Security or in respect of a provision which under the applicable
Indenture cannot be modified or amended without the consent of the holder of
each outstanding Debt Security affected. (Section 613; Section 513) The holders
of a majority in principal amount of the outstanding Debt Securities affected
thereby may on behalf of the holders of all such Debt Securities waive
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1110; Section 1008)
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under each
Indenture and as to any default in such performance. (Section 1109; Section
1007)
Modification. Modifications and amendments of each Indenture may be made by
the Company and the Trustee with the consent of the holders of a majority in
principal amount of the outstanding Debt Securities under the Indenture affected
thereby, provided, however, that no such modification or amendment may, without
the consent of the holder of each outstanding Debt Security affected thereby,
(a) change the stated maturity date of the principal of, or any installment of
interest on, any Debt Security, (b) reduce the principal amount of, or the
premium (if any) or interest on, any Debt Security, (c) change the Place of
Payment or currency, currencies, or currency unit or units of payment of
principal of, or premium (if any) or interest on, any Debt Security, (d) impair
the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security or (e) reduce the percentage in principal amount of
outstanding Debt Securities the consent of whose holders is required for
modification or amendment of the Indentures or for waiver of compliance with
certain provisions of the Indentures or for waiver of certain defaults. (Section
1002; Section 902)
Each Indenture provides that the Company and the Trustee may, without the
consent of any holders of Debt Securities, enter into supplemental indentures
for the purposes, among other things, of adding to the Company's covenants,
securing the Debt Securities, adding additional Events of Default, establishing
the form or terms of Debt Securities or curing ambiguities or inconsistencies in
the applicable Indenture, provided such action to cure ambiguities or
inconsistencies shall not adversely affect the interests of the holders of the
Debt Securities in any material respect. (Section 1001; Section 901)
Consolidation, Merger and Sale of Assets. The Company, without the consent
of any holders of outstanding Debt Securities, may consolidate with or merge
into, or convey, transfer or lease its assets substantially as an entirety to,
any Person, provided that the Person formed by such consolidation or into which
the Company is merged or which acquires or leases the assets of the Company
substantially as an entirety is a corporation, partnership or trust organized
under the laws of any United States jurisdiction and assumes by supplemental
indenture the Company's obligations on the Debt Securities and under the
Indenture, that after giving effect to the transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, and that certain other
conditions are met. Upon compliance with these provisions by a successor Person,
the Company will (except in the case of a lease) be relieved of its obligations
under the Indenture and the Debt Securities. (Article Nine; Article Eight)
Discharge and Defeasance. The Company may terminate its obligations under
each Indenture with respect to Debt Securities of any series, other than its
obligation to pay the principal of (and premium, if
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<PAGE> 43
any) and interest on such Debt Securities and certain other obligations, if it
(i) irrevocably deposits or causes to be irrevocably deposited with the Trustee
as trust funds money or U.S. Government Obligations maturing as to principal and
interest sufficient to pay the principal of, any interest on, and any mandatory
sinking funds in respect of, all outstanding Debt Securities of such series on
the stated maturity of such payments or on any redemption date, (ii) has
delivered to the Trustee an opinion of counsel to the effect that the holders of
Debt Securities of such series will not recognize income, gain or loss for
United States federal income tax purposes as a result of such discharge and will
be subject to United States federal income tax on the same amount and in the
same manner and at the same time as would have been the case if such discharge
had not occurred, and (iii) complies with any additional conditions specified to
be applicable with respect to the covenant defeasance of Debt Securities of such
series, and no default or Event of Default with respect to the Debt Securities
of such series shall have occurred and be continuing on the date of such deposit
or, insofar as they relate to certain events of bankruptcy or insolvency, at any
time in the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period). (Section 501; Section 401)
The terms of any series of Debt Securities may also provide for legal
defeasance pursuant to each Indenture. In such case, if the Company (i)
irrevocably deposits or causes to be irrevocably deposited money or U.S.
Government Obligations as described above and complies with the other provisions
described above (except that the opinion referred to in clause (ii) above must
be based on a ruling by the Internal Revenue Service or other change under
applicable United States federal income tax law), (ii) makes a request to the
Trustee to be discharged from its obligations on the Debt Securities of such
series and (iii) complies with any additional conditions specified to be
applicable with respect to legal defeasance of Debt Securities of such series,
then the Company shall be deemed to have paid and discharged the entire
indebtedness on all the outstanding Debt Securities of such series, and the
obligations of the Company under the applicable Indenture and the Debt
Securities of such series to pay the principal of (and premium, if any) and
interest on the Debt Securities of such series shall cease, terminate and be
completely discharged and the holders thereof shall thereafter be entitled only
to payment out of the money or U.S. Government Obligations deposited with the
Trustee as aforesaid, unless the Company's obligations are revived and
reinstated because the Trustee is unable to apply such trust fund by reason of
any legal proceeding, order or judgment. (Sections 503 and 504; Sections 403 and
404)
Form, Exchange, Registration and Transfer. Debt Securities are issuable in
definitive form as Registered Debt Securities, as Bearer Debt Securities or
both. Unless otherwise indicated in an applicable Prospectus Supplement, Bearer
Debt Securities will have interest coupons attached. Debt Securities are also
issuable in temporary or permanent global form. (Section 301)
Registered Debt Securities of any series will be exchangeable for other
Registered Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, with
respect to any series of Bearer Debt Securities, at the option of the holder,
subject to the terms of the applicable Indenture, Bearer Debt Securities (with
all unmatured coupons, except as provided below, and all matured coupons in
default) of such series will be exchangeable into Registered Securities of the
same series of any authorized denominations and of a like aggregate principal
amount and tenor. Bearer Debt Securities surrendered in exchange for Registered
Debt Securities between a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest, and interest accrued as of such
date will not be payable in respect of the Registered Debt Security issued in
exchange for such Bearer Debt Security, but will be payable only to the holder
of such coupon when due in accordance with the terms of the applicable
Indenture. (Section 305)
In connection with its sale during the restricted period (as defined
below), no Bearer Debt Security (including a Debt Security in permanent global
form that is either a Bearer Debt Security or exchangeable for Bearer Debt
Securities) shall be mailed or otherwise delivered to any location in the United
States (as defined under "-- Limitations on Issuance of Bearer Debt
Securities"), and a Bearer Debt Security may
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<PAGE> 44
be delivered outside the United States in definitive form in connection with the
original issuance only if prior to delivery the Person entitled to receive such
Bearer Debt Security furnishes written certification, in the form required by
the applicable Indenture, to the effect that such Bearer Debt Security is owned
by: (a) a Person (purchasing for its own account) who is not a United States
Person (as defined under "-- Limitations on Issuance of Bearer Debt
Securities"); (b) a United States Person who (i) is a foreign branch of a United
States financial institution purchasing for its own account or for resale or
(ii) acquired such Bearer Debt Security through the foreign branch of a United
States financial institution and who for purposes of the certification holds
such Bearer Debt Security through such financial institution on the date of
certification and, in either case, such United States financial institution
certifies to the Company or the distributor selling the Bearer Debt Security
within a reasonable time stating that it agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations thereunder; or (c) a
United States or foreign financial institution for purposes of resale within the
"restricted period" as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7). A financial institution described in clause (c) of the
preceding sentence (whether or not also described in clauses (a) and (b)) must
certify that it has not acquired the Bearer Debt Security for the purpose of
resale, directly or indirectly, to a United States Person or to a person within
the United States or its possessions. In the case of a Bearer Debt Security in
permanent global form, such certification must be given in connection with
notation of a beneficial owner's interest therein in connection with the
original issuance of such Debt Security or upon exchange of a portion of a
temporary global Security. (Section 303) See "-- Limitations on Issuance of
Bearer Debt Securities."
Debt Securities may be presented for exchange as provided above, and
Registered Debt Securities may be presented for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without a service charge and
upon payment of any taxes and other governmental charges as described in the
applicable Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the document of title and identity of the Person making the request. The
Company has appointed the Trustee as Security Registrar. (Section 305) If a
Prospectus Supplement refers to any transfer agents (in addition to the Security
Registrar) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
solely as Registered Debt Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt Securities
of a series are issuable as Bearer Debt Securities, the Company will be required
to maintain (in addition to the Security Registrar) a transfer agent in a Place
of Payment located outside the United States for Bearer Debt Securities and
Registered Securities of such series. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 1102; Section 1002)
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on, (A) if Debt Securities of the series are issuable only as
Registered Debt Securities, the day of mailing of the relevant notice of
redemption and, (B) if Debt Securities of the series are issuable as Bearer Debt
Securities, the day of the first publication of the relevant notice of
redemption, except that, if Securities of the series are also issuable as
Registered Debt Securities and there is no publication, the day of mailing of
the relevant notice of redemption; (ii) register the transfer of or exchange any
Registered Debt Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Debt Security being redeemed in part; or
(iii) exchange any Bearer Debt Security called for redemption, except to
exchange such Bearer Debt Security for a Registered Debt Security of that series
and like tenor that is simultaneously surrendered for redemption. (Section 305)
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Payment and Paying Agents. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of principal of and any premium and interest on
Bearer Debt Securities will be payable, subject to any applicable laws and
regulations in the designated currency or currency unit, at the offices of such
Paying Agents outside the United States as the Company may designate from time
to time, at the option of the holder, by check or by transfer to an account
maintained by the payee until a bank located outside the United States;
provided, however, that the written certification described above under
"-- Form, Exchange, Registration and Transfer" has been delivered prior to the
first actual payment of interest. (Section 307) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of interest on Bearer Debt Securities
on any Interest Payment Date will be made only against surrender to the Paying
Agent of the coupon relating to such Interest Payment Date. (Section 1101;
Section 1001) No payment with respect to any Bearer Debt Security will be made
at any office or agency of the Company in the United States or by check mailed
to any address in the United States or by transfer to any account maintained
with a bank located in the United States, nor shall any payments be made in
respect of Bearer Debt Securities upon presentation to the Company or its
designated Paying Agents within the United States. Notwithstanding the
foregoing, payments of principal of and any premium and interest on Bearer Debt
Securities denominated and payable in U.S. dollars will be made at the office of
the Company's Paying Agent in the Borough of Manhattan, The City of New York, if
(but only if) payment of the full amount thereof in United States dollars at all
offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 1102;
Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Debt Securities will
be made in the designated currency or currency unit at the office of such Paying
Agent or Paying Agents as the Company may designate from time to time, except
that at the option of the Company payment of any interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on Registered Debt
Securities will be made to the Person in whose name such Registered Debt
Security is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York will be designated as a Paying Agent for the Company for payments with
respect to Debt Securities which are issuable solely as Registered Debt
Securities, and the Company will maintain a Paying Agent outside the United
States for payments with respect to Debt Securities (subject to limitations
described above in the case of Bearer Debt Securities) which are issuable solely
as Bearer Debt Securities, or as both Registered Debt Securities and Bearer Debt
Securities. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Debt
Securities will be named in an applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that, if Debt Securities of a series are issuable solely as
Registered Debt Securities, the Company will be required to maintain a Paying
Agent in each Place of Payment for such series and, if Debt Securities of a
series are issuable as Bearer Debt Securities, the Company will be required to
maintain (i) a Paying Agent in the Borough of Manhattan, The City of New York
for principal payments with respect to any Registered Debt Securities of the
series (and for payments with respect to Bearer Debt Securities of the series in
the circumstances described above, but not otherwise), and (ii) a Paying Agent
in a Place of Payment located outside the United States where securities of such
series and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Debt Securities of such series are listed on any
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent in a city located outside
the United States, as may be required, for the Debt Securities of such series.
(Section 1102; Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed at the end of three years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
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repaid to the Company, and the holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof. (Section 1103; Section
1003)
Temporary Global Securities. If so specified in an applicable Prospectus
Supplement, all or any portion of the Debt Securities of a series which are
issuable as Bearer Debt Securities will initially be represented by one or more
temporary global Debt Securities, without interest coupons, to be deposited with
a common depositary in London for the Euroclear System ("Euroclear") and CEDEL
S.A ("CEDEL") for credit to the designated accounts. On and after the date
determined as provided in any such temporary global Debt Security and described
in an applicable Prospectus Supplement, each such temporary global Debt Security
will be exchangeable for definitive Bearer Debt Securities, definitive
Registered Debt Securities or all or a portion of a permanent global security,
or any combination thereof, as specified in an applicable Prospectus Supplement,
but, unless otherwise specified in an applicable Prospectus Supplement only upon
written certification in the form and to the effect described under "-- Form,
Exchange, Registration and Transfer." No Bearer Debt Security delivered in
exchange for a portion of a temporary global Debt Security will be mailed or
otherwise delivered to any location in the United States in connection with such
exchange. (Section 304)
Unless otherwise specified in an applicable Prospectus Supplement, interest
in respect of any portion of a temporary global Debt Security payable in respect
of an Interest Payment Date occurring prior to the issuance of definitive Debt
Securities or a permanent global Debt Security will be paid to each of Euroclear
and CEDEL with respect to the portion of the temporary global Debt Security held
for its account. Each of Euroclear and CEDEL will undertake in such
circumstances to credit such interest received by it in respect of a temporary
global Debt Security to the respective accounts for which it holds such
temporary global Debt Security only upon receipt in each case of written
certification in the form and to the effect described above under "-- Form,
Exchange, Registration and Transfer" as of the relevant Interest Payment Date
regarding the portion of such temporary global Debt Security on which interest
is to be so credited. (Section 304)
Permanent Global Securities. If any Debt Securities of a series are
issuable in permanent global form, the applicable Prospectus Supplement will
describe the circumstances, if any, under which beneficial owners of interests
in any such permanent global Debt Securities may exchange such interest for Debt
Securities of such series and of like tenor and principal amount in any
authorized form and denomination. No Bearer Debt Security delivered in exchange
for a portion of a permanent global Debt Security shall be mailed or otherwise
delivered to any location in the United States in connection with such exchange.
(Section 305) A Person having a beneficial interest in a permanent global Debt
Security will, except with respect to payment of principal of and any premium
and interest on such permanent global Debt Security, be treated as a holder of
such principal amount of Outstanding Debt Securities represented by such
permanent global Debt Security as shall be specified in a written statement of
the holder of such permanent global Debt Security or, in the case of a permanent
global Debt Security in bearer form, of the operator of Euroclear or CEDEL which
is provided to the Trustee by such Person. Principal of and any premium and
interest on a permanent global Debt Security will be payable in the manner
described in the applicable Prospectus Supplement. (Section 203)
Book-Entry Debt Securities. The Debt Securities of a series may be issued
in whole or in part, in the form of one or more global Debt Securities that
would be deposited with a depositary or a nominee identified in the applicable
Prospectus Supplement. The specific terms of any depositary arrangement with
respect to any portion of a series of Debt Securities and the rights of, and
limitations on, owners of beneficial interests in any such global Debt Security
representing all or a portion of a series of Debt Securities will be described
in the applicable Prospectus Supplement. (Section 204)
Limitations on Issuance of Bearer Debt Securities. In compliance with
United States federal tax laws and regulations, Bearer Debt Securities
(including securities in permanent global form that are either Bearer Debt
Securities or exchangeable for Bearer Debt Securities) will not be offered or
sold during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)) (generally, the first 40 days after
the closing date, and with respect to unsold allotments, until sold)
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within the United States or to United States Persons (each as defined below)
other than to an office located outside the United States of a United States
financial institution (as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury Regulations), purchasing for its own account or for resale or
for the account of certain customers, that provides a certificate stating that
it agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Code and the United States Treasury Regulations thereunder, or to certain
other Persons described in Section 1.163-5(c)(2)(i)(D)(l)(iii)(B) of the United
States Treasury Regulations. Moreover, such Bearer Debt Securities will not be
delivered in connection with their sale during the restricted period within the
United States. Any underwriters, agents and dealers participating in the
offering of Bearer Debt Securities must covenant that they will not offer or
sell during the restricted period any Bearer Debt Securities within the United
States or to United States Persons (other than the persons described above) or
deliver in connection with the sale of Bearer Debt Securities during the
restricted period any Bearer Debt Securities within the United States and that
they have in effect procedures reasonably designed to ensure that their
employees and agents who are directly engaged in selling the Bearer Debt
Securities are aware of the restrictions described above. No Bearer Debt
Security (other than a temporary global Bearer Debt Security) will be delivered
in connection with its original issuance nor will interest be paid on any Bearer
Debt Security until receipt by the Company of the written certification
described above under "-- Form, Exchange, Registration and Transfer." Each
Bearer Debt Security, other than a temporary global Bearer Debt Security, will
bear a legend to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
As used herein "United States Person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States and any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, and "United States" means the United States of America (including the
states and the District of Columbia) and its possessions.
Meetings. The Indentures contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting may be called at any time by
the Trustee, and also, upon request, by the Company or the holders of at least
25% in principal amount of the Outstanding Debt Securities of such series, in
any such case upon notice given as described under "-- Notices" below. Except
for any consent that must be given by the holder of each Outstanding Debt
Security affected thereby, as described under "-- Modification" above, any
resolution presented at a meeting or adjourned meeting at which a quorum is
present may be adopted by the affirmative vote of the holders of a majority in
principal amount of the Outstanding Debt Securities of that series; provided,
however, that except for any consent that must be given by the holder of each
Outstanding Debt Security affected thereby, as described under "-- Modification"
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
taken by the holders of a specified percentage, which is less than a majority in
principal amount of the Outstanding Debt Securities of a series may be adopted
at a meeting or adjourned meeting duly reconvened at which a quorum is present
by the affirmative vote of the holders of such specified percentage in principal
amount of the Outstanding Debt Securities of that series. Subject to the proviso
set forth above, any resolution passed or action taken at any meeting of holders
of Debt Securities of any series duly held in accordance with the Indenture will
be binding on all holders of Debt Securities of that series and any related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be Persons holding or representing a majority in
principal amount of the Outstanding Debt Securities of a series. (Article
Fourteen)
Notices. Except as otherwise provided in the Indentures, notices to holders
of Bearer Debt Securities will be given by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such Debt Securities. Notices to holders of Registered Debt
Securities will be given by mail to the addresses of such holders as they appear
in the Security Register. (Section 107)
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The Trustee. The Indentures provide that the Trustee shall authenticate and
deliver Debt Securities of a particular series in accordance with a Company
Order. Each Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases and to realize certain property received with respect to any such
claims, as security or otherwise. (Section 713; Section 613) The Trustee is one
of the lenders under certain of the Company's Credit Facilities. The Trustee is
permitted to engage in other transactions, except that, if it acquires any
conflicting interest and there is a default under the Debt Securities, it must
eliminate such conflict or resign. (Section 708; Section 608)
Governing Law. The Indentures are, and the Debt Securities will be,
governed by and construed in accordance with the laws of the State of New York,
but without giving effect to principles of conflicts of law.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
Senior Debt Securities will be issued under the Senior Indenture and will
rank pari passu in right of payment with the Company's obligations under its
Credit Facilities, its 8.25% Senior Notes due 1999, 8 3/8% Senior Notes due 2005
and 8 1/2% Senior Notes due 2007 (collectively, the "Senior Notes") and all
other unsecured and unsubordinated debt of the Company, and will be senior in
right of payment to all existing and future debt of the Company that is, by its
terms, expressly subordinated to the Senior Debt Securities. The Senior Debt
Securities issued under this Prospectus will not be guaranteed by any subsidiary
of the Company and will not rank pari passu with any debt of such subsidiary,
but will be senior in right of payment to all existing and future debt of such
subsidiary that is, by its terms, expressly subordinated to the Senior Debt
Securities.
Under the terms of the Indenture, if any Subsidiary of the Company
guarantees any Funded Indebtedness of the Company at any time in the future,
then the Company will cause the Senior Debt Securities to be equally, ratably
and unconditionally guaranteed by such Subsidiary (a "Guarantor") as an
unsecured obligation (the "Guarantee"). Any Guarantee of a Senior Debt Security
by a Guarantor will rank pari passu with (i) the guarantees provided by such
Guarantor under any Funded Indebtedness of the Company, including the Senior
Notes, and (ii) all existing and future unsecured indebtedness of such Guarantor
that is not, by its terms, expressly subordinated in right of payment to such
Guarantee.
Covenant Providing for Limitation on Liens. Nothing in the Senior Indenture
or the Senior Debt Securities will in any way restrict or prevent the Company or
any Restricted Subsidiary from issuing, assuming, guaranteeing or otherwise
incurring any Indebtedness, provided, however, the Senior Indenture will provide
that the Company will not, and will not permit any Restricted Subsidiary to,
issue, assume or guarantee any Indebtedness for borrowed money secured by any
Lien on any property or asset now owned or hereafter acquired by the Company or
such Restricted Subsidiary without making effective provision whereby any and
all Senior Debt Securities then or thereafter outstanding will be secured by a
Lien equally and ratably with any and all other obligations thereby secured for
so long as any such obligations shall be so secured.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary
may, without so securing the Senior Debt Securities, issue, assume or guarantee
Indebtedness secured by the following Liens:
(a) Liens existing on the date on which the Senior Debt Securities are
originally issued or provided for under the terms of agreements existing on
such date;
(b) Liens on property securing (i) all or any portion of the cost of
exploration, drilling or development of such property, (ii) all or any
portion of the cost of acquiring, constructing, altering, improving or
repairing any property or assets, real or personal, or improvements used or
to be used in connection with such property or (iii) Indebtedness incurred
by the Company or any Restricted Subsidiary to provide funds for the
activities set forth in clauses (i) and (ii) above;
(c) Liens securing Indebtedness owed by a Restricted Subsidiary to the
Company or to any other Restricted Subsidiary;
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(d) Liens on the property of any Person existing at the time such
Person becomes a Subsidiary of the Company and not incurred as a result of
(or in connection with or in anticipation of) such Person becoming a
Subsidiary of the Company, provided that such Liens do not extend to or
cover any property or assets of the Company or any of its Subsidiaries
other than the property so acquired;
(e) Liens on any property securing (i) Indebtedness incurred in
connection with the construction, installation or financing of pollution
control or abatement facilities or other forms of industrial revenue bond
financing or (ii) Indebtedness issued or guaranteed by the United States or
any State thereof or any department, agency or instrumentality of either;
(f) any Lien on any asset securing Non-Recourse Indebtedness of the
Company or any Restricted Subsidiary or on any asset of Union Texas East
Kalimantan Limited securing Joint Venture Indebtedness;
(g) any Lien extending, renewing or replacing (or successive
extensions, renewals or replacements of) any Lien of any type permitted
under clauses (a) through (f) above, provided that such Lien extends to or
covers only the property that is subject to the Lien being extended,
renewed or replaced;
(h) certain Liens arising in the ordinary course of business of the
Company and the Restricted Subsidiaries; or
(i) Liens (exclusive of any Lien of any type otherwise permitted under
clauses (a) through (h) above) securing Indebtedness of the Company or any
Restricted Subsidiary in an aggregate principal amount which, together with
the aggregate amount of Attributable Indebtedness deemed to be outstanding
in respect of all Sale/Leaseback Transactions entered into pursuant to
clause (a) of the covenant described under "Limitation on Sale/Leaseback
Transactions" below (exclusive of any such Sale/Leaseback Transactions
otherwise permitted under clauses (a) through (h) above), does not at the
time such Indebtedness is incurred exceed 10% of the Consolidated Net Worth
of the Company (as shown in the most recent audited consolidated balance
sheet of the Company and its Subsidiaries).
The following types of transactions will not be prohibited or otherwise
limited by the foregoing covenant: (i) the sale, granting of Liens with respect
to, or other transfer of, crude oil, natural gas or other petroleum hydrocarbons
in place for a period of time until, or in an amount such that, the transferee
will realize therefrom a specified amount (however determined) of money or of
such crude oil, natural gas or other petroleum hydrocarbons; (ii) the sale or
other transfer of any other interest in property of the character commonly
referred to as a production payment, overriding royalty, forward sale or similar
interest; and (iii) the granting of Liens required by any contract or statute in
order to permit the Company or any Restricted Subsidiary to perform any contract
or subcontract made by it with or at the request of the United States or any
State thereof or of any foreign government or any department, agency,
organization or instrumentality thereof, or to secure partial, progress, advance
or other payments to the Company or any Restricted Subsidiary by such
governmental unit pursuant to the provisions of any contract or statute.
(Section 1107 of the Senior Indenture)
Covenant Providing for Limitation on Sale/Leaseback Transactions. The
Senior Indenture will provide that the Company will not, and will not permit any
Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with any
Person (other than the Company or a Restricted Subsidiary) unless:
(a) the Company or such Restricted Subsidiary would be entitled to
incur Indebtedness, in a principal amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction, secured by a
Lien on the property subject to such Sale/Leaseback Transaction pursuant to
the covenant described under "Limitation on Liens" above without equally
and ratably securing the Senior Debt Securities pursuant to such covenant;
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(b) after the date on which the Senior Debt Securities are originally
issued and within a period commencing six months prior to the consummation
of such Sale/Leaseback Transaction and ending six months after the
consummation thereof, the Company or such Restricted Subsidiary shall have
expended for property used or to be used in the ordinary course of business
of the Company and the Restricted Subsidiaries (including amounts expended
for the exploration, drilling or development thereof, and for additions,
alterations, repairs and improvements thereto) an amount equal to all or a
portion of the net proceeds of such Sale/Leaseback Transaction and the
Company shall have elected to designate such amount as a credit against
such Sale/Leaseback Transaction (with any such amount not being so
designated to be applied as set forth in clause (c) below); or
(c) the Company, during the 12-month period after the effective date
of such Sale/Leaseback Transaction, shall have applied to the voluntary
defeasance or retirement of any Pari Passu Indebtedness an amount equal to
the greater of the net proceeds of the sale or transfer of the property
leased in such Sale/Leaseback Transaction and the fair value, as determined
by the Board of Directors of the Company, of such property at the time of
entering into such Sale/Leaseback Transaction (in either case adjusted to
reflect the remaining term of the lease and any amount expended by the
Company as set forth in clause (b) above), less an amount equal to the
principal amount of Pari Passu Indebtedness voluntarily defeased or retired
by the Company within such 12-month period and not designated as a credit
against any other Sale/Leaseback Transaction entered into by the Company or
any Restricted Subsidiary during such period. (Section 1106 of the Senior
Indenture)
The term "Attributable Indebtedness," when used with respect to any
Sale/Leaseback Transaction, is defined in the Senior Indenture as at the time of
determination, the present value (discounted at a rate equivalent to the
Company's then current weighted average cost of funds for borrowed money as at
the time of determination, compounded on a semi-annual basis) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
The term "Capitalized Lease Obligation" of any Person is defined in the
Senior Indenture as any obligation of such Person to pay rent or other amounts
under a lease of property, real or personal, that is required to be capitalized
for financial reporting purposes in accordance with generally accepted
accounting principles; and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with generally accepted
accounting principles.
The term "Consolidated Net Worth" of the Company is defined in the Senior
Indenture as the consolidated stockholder's equity of the Company and its
Subsidiaries, as determined in accordance with generally accepted accounting
principles.
The term "Funded Indebtedness" is defined in the Senior Indenture as all
Indebtedness (including Indebtedness incurred under any revolving credit, letter
of credit or working capital facility) that matures by its terms, or that is
renewable at the option of any obligor thereon to a date, more than one year
after the date on which such Indebtedness is originally incurred.
The term "Hedging Obligations" of any Person is defined in the Senior
Indenture as the obligations of such Person pursuant to any interest rate swap
agreement, foreign currency exchange agreement, interest rate collar agreement,
option or future contract or other similar agreement or arrangement relating to
interest rates or foreign exchange rates.
The term "Indebtedness" of any Person at any date is defined in the Senior
Indenture as, without duplication, (i) all indebtedness of such Person for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or other
similar instruments (or reimbursement obligations with respect thereto), other
than standby letters of credit incurred by such Person in the ordinary course of
business, (iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or
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services, except trade payables and accrued expenses incurred in the ordinary
course of business, (v) all Capitalized Lease Obligations of such Person, (vi)
all Indebtedness of others secured by a lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person, (vii) all
Indebtedness of others guaranteed by such Person to the extent of such guarantee
and (viii) all Hedging Obligations of such Person.
The term "Joint Venture Indebtedness" is defined in the Senior Indenture as
obligations secured by a Lien on the interests of the Company or a Restricted
Subsidiary, as the case may be, arising under production sharing contracts or
related supply contracts, if such Lien covers ratably the interests of
Pertamina, the Indonesian national oil company, and all production sharing
contractors thereunder.
The term "Lien" is defined in the Senior Indenture as, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset (including, without limitation, any production
payment, advance payment or similar arrangement with respect to minerals in
place), whether or not filed, recorded or otherwise perfected under applicable
law. For the purposes of this Indenture, the Company or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
Capitalized Lease Obligation (other than any Capitalized Lease Obligation
relating to any building, structure, equipment or other property used or to be
used in the ordinary course of business of the Company and the Restricted
Subsidiaries) or other title retention agreement relating to such asset.
The term "Non-Recourse Indebtedness" is defined in the Senior Indenture as,
at any date, the aggregate amount at such date of Indebtedness of the Company or
a Subsidiary in respect of which the recourse of the holder of such
Indebtedness, whether direct or indirect and whether contingent or otherwise, is
effectively limited to specified assets.
The term "Pari Passu Indebtedness" is defined in the Senior Indenture as
any Indebtedness of the Company, whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall be
subordinated in right of payment to the Securities.
The term "Restricted Subsidiary" is defined in the Senior Indenture as (i)
Union Texas East Kalimantan Limited, Union Texas Petroleum Energy Corporation,
Union Texas International Corporation, Union Texas Products Corporation and
Unistar, Inc., (ii) Union Texas Petroleum Limited so long as it is a Subsidiary
of the Company and (iii) any Subsidiary of the Company that is a successor
corporation of any Subsidiary of the Company referred to in clauses (i) and
(ii).
The term "Sale/Leaseback Transaction" is defined in the Senior Indenture as
any arrangement with any Person providing for the leasing by the Company or any
Restricted Subsidiary, for a period of more than three years, of any real or
tangible personal property, which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person in
contemplation of such leasing.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
General. Subordinated Debt Securities will be issued under the Subordinated
Indenture and will rank pari passu with certain other subordinated debt of the
Company that may be outstanding from time to time and will rank junior to all
Senior Indebtedness (including any Senior Debt Securities) of the Company that
may be outstanding from time to time.
Subordination. The payment of the principal of (and premium, if any) and
interest on the Subordinated Debt Securities is expressly subordinated, to the
extent and in the manner set forth in the Subordinated Indenture, in right of
payment to the prior payment in full of all Senior Indebtedness of the Company.
(Section 1301 of the Subordinated Indenture)
16
<PAGE> 52
In the event of any dissolution or winding up, or total or partial
liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, the holders of
Senior Indebtedness will be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Indebtedness before the
holders of the Subordinated Debt Securities are entitled to receive any payment
on account of principal (or premium, if any) or interest on the Subordinated
Debt Securities. (Section 1302 of the Subordinated Indenture) By reason of
subordination of the Subordinated Debt Securities, in the event of the
insolvency of the Company, holders of the Subordinated Debt Securities may
recover less, ratably, than holders of Senior Indebtedness.
Unless otherwise indicated in the applicable Prospectus Supplement, no
payment in respect of the Subordinated Debt Securities shall be made if, at the
time of such payment, there exists a default in payment of all or any portion of
any Senior Indebtedness, and such default shall not have been cured or waived in
writing or the benefits of such subordination in the Subordinated Indenture
shall not have been waived in writing by or on behalf of the holders of such
Senior Indebtedness. In addition, unless otherwise provided in the applicable
Prospectus Supplement, during the continuance of any event of default (other
than a default referred to in the immediately preceding sentence) with respect
to any Senior Indebtedness permitting the holders to accelerate the maturity
thereof and upon written notice thereof given to the Trustee, with a copy to the
Company (the delivery of which shall not affect the validity of the notice to
the Trustee), by any holder of Senior Indebtedness or its representative, then,
unless and until such an event of default shall have been cured or waived or
shall have ceased to exist, no payment shall be made by the Company with respect
to the principal of or interest on the Subordinated Debt Securities or to
acquire any of the Subordinated Debt Securities or on account of the redemption
provisions of the Subordinated Debt Securities. Only one such payment blockage
period may be commenced within any consecutive 365-day period with respect to
the Subordinated Debt Securities. No event of default which existed or was
continuing on the date of the commencement of any 180-day payment blockage
period with respect to the Senior Indebtedness initiating such payment blockage
period shall be, or be made, the basis for the commencement of a second payment
blockage period by a holder or representative of such Senior Indebtedness,
whether or not within a period of 365 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days (and, in the case of any such waiver, no payment shall be made
by the Company to the holders of Senior Indebtedness in connection with such
waiver other than amounts due pursuant to the terms of the Senior Indebtedness
as in effect at the time of such default). (Section 1302 of the Subordinated
Indenture)
The term "Indebtedness", as applied to any Person, is defined in the
Subordinated Indenture as all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by such Person for the
repayment of money borrowed, and obligations, computed in accordance with
generally accepted accounting principles, as lessee under leases that should be,
in accordance with generally accepted accounting principles, recorded as capital
leases. All Indebtedness of others guaranteed as to payment of principal by such
Person or in effect guaranteed by such Person through a contingent agreement to
purchase such Indebtedness shall for all purposes hereof be deemed to be
Indebtedness of such Person.
The term "Senior Indebtedness" is defined in the Subordinated Indenture as
Indebtedness, either outstanding as of the date of the Subordinated Indenture or
issued subsequent to the date of the Subordinated Indenture, unless such
Indebtedness is either subordinated by its terms in right of payment to any
other Indebtedness of the Company or pari passu with subordinated Indebtedness
of any series, provided that the term "Senior Indebtedness" shall not include
(i) Indebtedness of the Company to any Subsidiary for money borrowed or advanced
from such Subsidiary or (ii) amounts owed (except to banks and other financial
institutions) for goods, materials or services purchased in the ordinary course
of business.
If Subordinated Debt Securities are issued under the Subordinated
Indenture, the aggregate principal amount of Senior Indebtedness outstanding as
of a recent date will be set forth in the applicable Prospectus Supplement. The
Subordinated Indenture does not restrict the amount of Senior Indebtedness that
the Company may incur.
17
<PAGE> 53
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in and/or outside the United
States: (i) through underwriters, (ii) through dealers acting as principal or as
agent, (iii) directly to a limited number of purchasers or to a single
purchaser; or (iv) through agents. The applicable Prospectus Supplement with
respect to the Offered Debt Securities will set forth the terms of the offering
of the Offered Debt Securities, including the name or names of any underwriters,
dealers or agents, the purchase price of the Offered Debt Securities and the
proceeds to the Company from such sale, any delayed delivery arrangements, any
discounts or commissions and other items constituting compensation allowed or
paid to any underwriters, dealers or agents, any aggregate initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers. Any aggregate initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If underwriters are used in the sale, the Offered Debt Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Debt Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering of Offered Debt
Securities will be named in the Prospectus Supplement relating to such offering
and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover of such Prospectus Supplement.
Unless otherwise set forth in the Prospectus Supplement relating thereto, the
obligations of the underwriters to purchase the Offered Debt Securities will be
subject to conditions precedent, and the underwriters will be obligated to
purchase all the Offered Debt Securities if any are purchased.
If dealers are utilized in the sale of Offered Debt Securities in respect
of which this Prospectus is delivered, the Company will sell such Offered
Securities to the dealers acting as principals or agents. The dealers may then
resell such Offered Debt Securities to the public at varying prices to be
determined by such dealers at the time of resale. The terms of the transaction
will be set forth in the Prospectus Supplement relating thereto to the extent
required by the Securities Act.
The Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect to which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement relating thereto to the extent required
by the Securities Act. Unless otherwise indicated in the Prospectus Supplement,
any such agent will be acting on a reasonable best efforts basis for the period
of its appointment.
The Debt Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales, including the terms of any bidding or auction process, will be described
in the Prospectus Supplement relating thereto.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Offered Debt Securities from the Company at the
public offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
applicable Prospectus Supplement, and the Prospectus Supplement will set forth
the commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business or otherwise.
18
<PAGE> 54
The Debt Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be an active trading market
for any of the Debt Securities.
LEGAL MATTERS
The validity of the Debt Securities is being passed upon for the Company by
Andrews & Kurth L.L.P., Houston, Texas, and for the underwriters, dealers or
other agents by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), New York, New York.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K of Union Texas Petroleum Holdings, Inc. for the
year ended December 31, 1994, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The audited historical summary of the Company's interest in the oil and gas
revenues and direct operating expenses of the property acquired from Oryx U.K.
Energy Company incorporated in this Prospectus by reference to the Company's
Amendment No. 1 to Current Report on Form 8-K/A filed October 2, 1995, has been
so incorporated in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
With respect to the unaudited consolidated financial information of Union
Texas Petroleum Holdings, Inc. for the three, six and nine-month periods ended
March 31, 1995 and 1994, June 30, 1995 and 1994 and September 30, 1995 and 1994,
respectively, incorporated by reference in this Prospectus, Price Waterhouse LLP
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
reports dated April 20, 1995, July 25, 1995 and October 24, 1995, incorporated
by reference herein, state that they did not audit and they do not express an
opinion on that unaudited consolidated financial information. Price Waterhouse
LLP has not carried out any significant or additional audit tests beyond those
which would have been necessary if their reports had not been included.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Price Waterhouse LLP is not subject to the liability provisions of section 11 of
the Securities Act of 1933 for their reports on the unaudited consolidated
financial information because those reports are not a "report" or a "part" of
the registration statement prepared or certified by Price Waterhouse LLP within
the meaning of sections 7 and 11 of the Act.
19
<PAGE> 55
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY AGENT. THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS NOT AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN
SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Important Currency Exchange
Information......................... S-2
Description of Medium-Term Notes,
Series A............................ S-2
Certain Investment Considerations..... S-21
Special Provisions and Risks Relating
to Foreign Currency Notes........... S-21
Certain United States Federal Income
Tax Considerations.................. S-23
Plan of Distribution.................. S-32
Validity of Notes..................... S-33
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 3
Description of the Debt Securities.... 4
Plan of Distribution.................. 18
Legal Matters......................... 19
Experts............................... 19
</TABLE>
U.S.$100,000,000
UNION TEXAS
PETROLEUM
HOLDINGS, INC.
MEDIUM-TERM NOTES,
SERIES A
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
SALOMON BROTHERS INC
BA SECURITIES, INC.
NATIONSBANC CAPITAL
MARKETS, INC.
UBS SECURITIES INC.
PROSPECTUS SUPPLEMENT
DATED , 1995
<PAGE> 56
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
An itemized statement of the estimated amount of all expenses in connection
with the distribution of the securities registered hereby, all of which will be
paid by the Company, is as follows:
<TABLE>
<S> <C>
Registration fee................................................. $ 34,483
Blue Sky fees and expenses....................................... 15,000
Printing and engraving expenses.................................. 70,000
Legal fees and expenses.......................................... 75,000
Accounting fees and expenses..................................... 50,000
Rating agencies' fees and expenses............................... 82,500
Trustee's and registrar's fees................................... 20,000
Miscellaneous fees and expenses.................................. 3,017
---------
Total.................................................. $ 350,000
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL"), inter alia,
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Similar indemnity is
authorized for such persons against expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement of
any such threatened, pending or completed action or suit if such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and provided further that (unless a court of
competent jurisdiction otherwise provides) such person shall not have been
adjudged liable to the corporation. Any such indemnification may be made only as
authorized in each specific case upon a determination by the stockholders or
disinterested directors or by independent legal counsel in a written opinion
that indemnification is proper because the indemnitee has met the applicable
standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145. The Company
maintains policies insuring its and its subsidiaries officers and directors
against certain liabilities for actions taken in such capacities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
Article VI of the Bylaws of the Company provides for indemnification of the
directors and officers of the Company to the full extent permitted by law, as
now in effect or later amended. In addition, the Bylaws provide for
indemnification against expenses incurred by a director or officer to be paid by
the Company at reasonable intervals in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount if it shall be
II-1
<PAGE> 57
ultimately determined that he is not entitled to be indemnified by the Company.
The Bylaws further provide for a contractual cause of action on the part of
directors and officers of the Company for indemnification claims that have not
been paid by the Company.
The Company also has provided liability insurance for each director and
officer for certain losses arising from claims or charges made against them
while acting in their capacities as directors or officers of the Company.
Article VII of the Company's Restated Certificate of Incorporation, as
amended, limits under certain circumstances the liability of the Company's
directors for a breach of their fiduciary duty as directors. These provisions do
not eliminate the liability of a director (i) for a breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or that involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL (relating to the declaration of
dividends and purchase or redemption of shares in violation of the DGCL) or (iv)
for any transaction from which the director derived an improper personal
benefit.
ITEM 16. EXHIBITS
<TABLE>
<S> <C> <C>
*1.1 -- Form of Selling Agency Agreement.
4.1 -- Indenture dated as of March 15, 1995, among the Company, certain
subsidiaries named therein and The First National Bank of Chicago, as
trustee, with respect to Senior Debt Securities (Filed as Exhibit 10.1
to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995 (Commission File No. 1-9019) and incorporated herein by
reference).
*4.2 -- Form of Indenture between the Company and The First National Bank of
Chicago, as trustee, with respect to Subordinated Debt Securities.
*4.3 -- Form of Senior Note.
*4.4 -- Form of Fixed-Rate Medium-Term Note.
*4.5 -- Form of Floating-Rate Medium-Term Note.
*5.1 -- Opinion of legal counsel regarding legality of securities being
registered.
*12.1 -- Computation of Ratio of Earnings to Fixed Charges.
*15.1 -- Independent Accountants' Awareness Letter.
*23.1 -- Consent of Price Waterhouse LLP.
*23.2 -- Consent of Coopers & Lybrand L.L.P.
23.3 -- Consent of legal counsel (included in Exhibit 5.1).
24.1 -- Power of Attorney (included in Part II of the registration statement).
*25.1 -- Statement of Eligibility of Trustee on Form T-1 for Debt Securities.
</TABLE>
- ---------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 58
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in the periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that:
(1) For purpose of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions in Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 59
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED IN THE CITY OF HOUSTON, STATE OF TEXAS, ON NOVEMBER 7, 1995.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By: /s/ LARRY D. KALMBACH
----------------------------------------
Larry D. Kalmbach
Vice President and Chief Financial
Officer
POWER OF ATTORNEY
We the undersigned, directors and officers of Union Texas Petroleum
Holdings, Inc. (the "Company"), do hereby severally constitute and appoint A.
Clark Johnson, Newton W. Wilson, II, Larry D. Kalmbach and Donald M. McMullan
and each or any of them, our true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments or
post-effective amendments to this Registration Statement, and to file the same
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys and agents,
and each or any of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, and each of them, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- -----------------
<S> <C> <C>
/s/ A. CLARK JOHNSON Chairman of the Board and November 7, 1995
- --------------------------------------------- Chief Executive Officer
(A. Clark Johnson) (Principal Executive
Officer)
/s/ LARRY D. KALMBACH Vice President and Chief November 7, 1995
- --------------------------------------------- Financial Officer (Principal
(Larry D. Kalmbach) Financial Officer)
/s/ DONALD M. MCMULLAN Vice President and November 7, 1995
- --------------------------------------------- Controller (Principal
(Donald M. McMullan) Accounting Officer)
/s/ GLENN A. COX Director November 7, 1995
- ---------------------------------------------
(Glenn A. Cox)
/s/ SAUL A. FOX Director November 7, 1995
- ---------------------------------------------
(Saul A. Fox)
/s/ EDWARD A. GILHULY Director November 7, 1995
- ---------------------------------------------
(Edward A. Gilhuly)
</TABLE>
II-4
<PAGE> 60
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- -----------------
<S> <C> <C>
/s/ JAMES H. GREENE, JR. Director November 7, 1995
- ---------------------------------------------
(James H. Greene, Jr.)
/s/ HENRY R. KRAVIS Director November 7, 1995
- ---------------------------------------------
(Henry R. Kravis)
/s/ MICHAEL W. MICHELSON Director November 7, 1995
- ---------------------------------------------
(Michael W. Michelson)
/s/ STANLEY P. PORTER Director November 7, 1995
- ---------------------------------------------
(Stanley P. Porter)
/s/ GEORGE R. ROBERTS Director November 7, 1995
- ---------------------------------------------
(George R. Roberts)
/s/ RICHARD R. SHINN Director November 7, 1995
- ---------------------------------------------
(Richard R. Shinn)
/s/ SELLERS STOUGH Director November 7, 1995
- ---------------------------------------------
(Sellers Stough)
</TABLE>
II-5
<PAGE> 61
INDEX TO EXHIBITS
<TABLE>
<S> <C> <C>
*1.1 -- Form of Selling Agency Agreement.
4.1 -- Indenture dated as of March 15, 1995, among the Company, certain
subsidiaries named therein and The First National Bank of Chicago, as
trustee, with respect to Senior Debt Securities (Filed as Exhibit 10.1
to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995 (Commission File No. 1-9019) and incorporated herein by
reference).
*4.2 -- Form of Indenture between the Company and The First National Bank of
Chicago, as trustee, with respect to Subordinated Debt Securities.
*4.3 -- Form of Senior Note.
*4.4 -- Form of Fixed-Rate Medium-Term Note.
*4.5 -- Form of Floating-Rate Medium-Term Note.
*5.1 -- Opinion of legal counsel regarding legality of securities being
registered.
*12.1 -- Computation of Ratio of Earnings to Fixed Charges.
*15.1 -- Independent Accountants' Awareness Letter.
*23.1 -- Consent of Price Waterhouse LLP.
*23.2 -- Consent of Coopers & Lybrand L.L.P.
23.3 -- Consent of legal counsel (included in Exhibit 5.1).
24.1 -- Power of Attorney (included in Part II of the registration statement).
*25.1 -- Statement of Eligibility of Trustee on Form T-1 for Debt Securities.
</TABLE>
- ---------------
* Filed herewith.
II-6
<PAGE> 1
EXHIBIT 1.1
UNION TEXAS PETROLEUM HOLDINGS, INC.
$100,000,000 MEDIUM-TERM NOTES, SERIES A
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
_______________
Selling Agency Agreement
, 1995
Salomon Brothers Inc
BA Securities, Inc.
NationsBank Capital Markets, Inc.
UBS Securities Inc.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Union Texas Petroleum Holdings, Inc., a Delaware corporation
(the "Company"), confirms its agreement with each of you with respect to the
issue and sale by the Company of up to $100,000,000 aggregate principal amount
of its Medium-Term Notes, Series A Due Nine Months or More From Date of Issue
(the "Notes"). The Notes which will constitute senior notes will be issued
under an Indenture, as amended (the "Senior Indenture"), between the Company
and The First National Bank of Chicago, and the Notes which will constitute
subordinated notes will be issued under an Indenture (the "Subordinated
Indenture"), to be entered into between the Company and The First National Bank
of Chicago. The Senior Indenture and the Subordinated Indenture are referred
to herein collectively as the "Indentures" and individually as an "Indenture".
The First National Bank of Chicago, as trustee, is herein referred to as the
"Trustee". Unless otherwise specifically provided for and set forth in a
Pricing Supplement (as defined below), the Notes will be issued in minimum
denominations of $1,000 and in denominations exceeding such amount by integral
multiples of $1,000, will be issued only in fully registered form and will have
the interest rates, maturities and, if applicable, other terms set forth in
such Pricing Supplement. The Notes will be issued, and the terms thereof
established, in accordance with the applicable Indenture and the Medium-Term
Notes Administrative Procedures attached hereto as Exhibit A (the "Procedures")
(unless a Terms Agreement (as defined in Section 2(b)) modifies or otherwise
supersedes such Procedures with respect to the Notes issued pursuant to such
Terms Agreement). The Procedures may be amended only by written agreement of
the Company and you after notice to, and with the approval of, the Trustee.
For the purposes of this Agreement, the term "Agent" shall refer to any of you
acting solely in the capacity as agent for the Company pursuant to Section 2(a)
and not as principal (collectively, the "Agents"), the term "Purchaser" shall
refer to one of you acting solely as principal pursuant to Section 2(b) and not
as agent, and the term "you" shall refer to you collectively whether at any
time any of you is acting in both such capacities or in either such capacity.
In acting under this Agreement, in whatever capacity, each of you is acting
individually and not jointly.
1. The Company represents and warrants to, and agrees with,
each of the Agents that:
<PAGE> 2
(a) A registration statement in respect of the Notes
has been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, have
been declared effective by the Commission in such form; the Company
has included in such registration statement, or has filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) under
the Securities Act of 1933, as amended (the "Act"), a supplement to
the form of prospectus included in such registration statement
relating to the Notes and the plan of distribution thereof (the
"Prospectus Supplement"); in connection with the sale of Notes the
Company proposes to file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act further supplements
to the Prospectus Supplement (each a "Pricing Supplement") specifying
the interest rates, maturity dates and, if appropriate, other similar
terms of the Notes sold pursuant hereto or the offering thereof; and
no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission; the various parts of such
registration statement, including all exhibits thereto (other than the
Statement of Eligibility and Qualification on Form T-1 of the
Trustee) and including the documents incorporated by reference
therein, as amended as of the date hereof, being hereinafter called
the "Registration Statement"; the form of basic prospectus contained
in the Registration Statement being hereinafter called the "Basic
Prospectus"; the Basic Prospectus as supplemented by the Prospectus
Supplement being hereinafter referred to as the "Prospectus"; each
date that the Registration Statement and any post-effective amendment
thereto became or becomes effective and each date after the date
hereof on which a document incorporated by reference in the
Registration Statement is filed being hereinafter referred to as the
"Effective Date"; any reference herein to the Registration Statement,
the Basic Prospectus, the Prospectus or the Prospectus Supplement
being deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration
Statement or the date of the Basic Prospectus, the Prospectus or the
Prospectus Supplement, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, the Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Effective Date
of the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus or the Prospectus Supplement, as the case
may be, deemed to be incorporated by reference therein.
(b) As of the date hereof, on the Effective Date, when
any supplement to the Prospectus is filed with the Commission, as of
the date of a Terms Agreement and at the date of delivery by the
Company of any Notes sold hereunder (a "Closing Date"), the
Registration Statement, as amended as of any such time, and the
Prospectus, as supplemented as of any such time, will conform, in all
material respects to the requirements of the Act, the Exchange Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the published rules and regulations of the Commission
thereunder and did not or 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;
provided, however, that this representation and warranty shall not
apply to (i) that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1)
under the Trust Indenture Act of the Trustee or (ii) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by you expressly for use therein;
(c) None of the Company or any of its subsidiaries or,
to the best of the Company's knowledge, Unimar Company, a Texas
general partnership ("Unimar"), has sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus, as amended or supplemented, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus which loss or
interference is material to the Company and its subsidiaries taken as
2
<PAGE> 3
a whole; and, since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
as amended or supplemented, there has not been any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(d) 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 power and authority (corporate and other)
to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; each subsidiary
of the Company identified in Annex III hereto (collectively, the
"Material Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; Unimar has been duly formed and is
validly existing as a partnership under the laws of the State of
Texas; and the Company does not have any subsidiary that is a
"significant subsidiary" (within the meaning of the published rules
and regulations of the Commission under the Act) that is not
identified in Annex III hereto;
(e) The Company has an authorized capitalization as set
forth in the Prospectus; and all of the issued shares of capital stock
of each Material Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable, and all of such shares
of capital stock and 50% of the equity interests in Unimar (except for
directors' qualifying shares and shares held by third parties solely
to satisfy local law requirements and except as set forth in the
Prospectus) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(f) The Notes have been duly authorized by the Company
and, when issued and delivered pursuant to this Agreement, will have
been duly executed, authenticated, issued and delivered by the Company
and will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the applicable Indenture,
which will be substantially in the form filed as an exhibit to the
Registration Statement; each Indenture has been duly authorized by the
Company and duly qualified under the Trust Indenture Act and, as of
the time any Notes are issued and sold hereunder, will constitute a
valid and legally binding instrument of the Company, enforceable
against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles; and the Notes and each Indenture
will conform to the descriptions thereof in the Prospectus;
(g) The issue and sale of the Notes and the compliance
by the Company with all of the provisions of the Notes, each Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries or, to the best of the Company's knowledge, Unimar is a
party or by which the Company or any of its subsidiaries or, to the
best of the Company's knowledge, Unimar is bound or to which any of
the property or assets of the Company or any of its subsidiaries or,
to the best of the Company's knowledge, Unimar is subject, or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, any of its
subsidiaries or, to the best of the Company's knowledge, Unimar or any
of their properties (excluding conflicts, breaches, violations and
defaults that, individually or in the aggregate, will not have any
material adverse effect on the general affairs, management, financial
position, stockholders' equity, results of operations or prospects of
the Company and its subsidiaries taken
3
<PAGE> 4
as a whole), nor will any such action result in any violation of
the provisions of the Restated Certificate of Incorporation or By-laws
of the Company; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement or either
Indenture, except the registration under the Act of the Notes, the
qualification under the Trust Indenture Act of the Indentures and such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the
Agents;
(h) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries or, to the best of the Company's knowledge,
Unimar is a party or of which any property of the Company or any of
its subsidiaries or, to the best of the Company's knowledge, Unimar is
the subject which, if determined adversely to the Company or any of
its subsidiaries or Unimar, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(i) Price Waterhouse LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder;
(j) The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the published rules and regulations of
the Commission thereunder, and the offer and sale of the Notes will
not subject the Company to registration under, or result in a
violation of, the Investment Company Act; and
(k) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes.
2. (a) Subject to the terms and conditions set forth herein,
the Company hereby authorizes each of the Agents to act as its agent to solicit
offers for the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the Agents
agrees, as agent of the Company, to use its reasonable best efforts to solicit
offers to purchase the Notes from the Company upon the terms and conditions set
forth in the Prospectus (and any supplement thereto) and in the Procedures.
Each Agent shall make reasonable best efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company, but such Agent shall not,
except as otherwise provided in this Agreement, be obligated to disclose the
identity of any purchaser or have any liability to the Company in the event any
such purchase is not consummated for any reason. Except as provided in Section
2(b), under no circumstances will any Agent be obligated to purchase any Notes
for its own account. Notwithstanding anything herein to the contrary, no Agent
shall have any obligation to solicit offers to purchase Notes which constitute
subordinated notes until such time as the Subordinated Indenture shall have
been executed and delivered by the Company and the Trustee and the Agents have
received in connection therewith such opinions of Simpson Thacher & Bartlett,
counsel for the Agents (which counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters), and Andrews & Kurth L.L.P., counsel for the Company, as the Agents
may reasonably request. It is understood and agreed, however, that any Agent
may purchase Notes as principal pursuant to Section 2(b).
4
<PAGE> 5
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. Upon receipt of
instructions from the Company, the Agents will forthwith suspend solicitation
of offers to purchase Notes from the Company until such time as the Company has
advised them that such solicitation may be resumed or is terminated.
The Company agrees to pay each Agent a commission, on the
Closing Date with respect to each sale of Notes by the Company as a result of a
solicitation made by such Agent, in an amount equal to that percentage
specified in Annex I hereto of the aggregate principal amount of the Notes sold
by the Company. Such commission shall be payable as specified in the
Procedures.
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by an Agent as
agent for the Company at such time and in such amounts as such Agent deems
advisable. The Company may from time to time offer Notes for sale otherwise
than through an Agent; provided, however, that so long as this Agreement is in
effect the Company shall not solicit or accept offers to purchase Notes through
any agent other than an Agent.
If the Company shall default in its obligations to deliver
Notes to a purchaser whose offer it has accepted, the Company shall indemnify
and hold each of you harmless against any loss, claim or damage arising from or
as a result of such default by the Company.
(b) Subject to the terms and conditions stated herein,
whenever the Company and any of you determines that the Company shall sell
Notes directly to any of you as principal, each such sale of Notes shall be
made in accordance with the terms of this Agreement and a supplemental
agreement relating to such sale. Each such supplemental agreement (which may
be either an oral or written agreement; provided, that any oral terms agreement
shall promptly be confirmed in writing) is herein referred to as a "Terms
Agreement". Each Terms Agreement shall describe the Notes to be purchased by
the Purchaser pursuant thereto and shall specify the aggregate principal amount
of such Notes, the price to be paid to the Company for such Notes, the maturity
date of such Notes, the rate at which interest will be paid on such Notes, the
dates on which interest will be paid on such Notes and the record date with
respect to each such payment of interest, the Closing Date for the purchase of
such Notes, the place of delivery of the Notes and payment therefor, the method
of payment and any requirements for the delivery of opinions of counsel,
certificates from the Company or its officers or a letter from the Company's
independent public accountants as described in Section 7(b). Any such Terms
Agreement may also specify the period of time referred to in Section 4(e). Any
written Terms Agreement may be in the form attached hereto as Exhibit B. The
Purchaser's commitment to purchase Notes shall be deemed to have been made on
the basis of the representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser
pursuant to a Terms Agreement shall be made not later than the Closing Date
agreed to in such Terms Agreement, against payment of funds to the Company in
the net amount due to the Company for such Notes by the method and in the form
set forth in the Procedures unless otherwise agreed to between the Company and
the Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the
Purchaser in a Terms Agreement, any Note sold to a Purchaser (i) shall be
purchased by such Purchaser at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity and (ii) may be resold by such Purchaser at
varying prices from time to time or, if set forth in the applicable Terms
Agreement and Pricing Supplement, at a fixed public offering price. In
connection with any resale of Notes purchased, a Purchaser may use a selling
or dealer group and may reallow to any broker or dealer any portion of the
discount or commission payable pursuant hereto.
5
<PAGE> 6
Each Agent agrees that it will not, as agent or principal, as
the case may be, directly or indirectly, solicit offers to purchase any Notes
or offer, sell or deliver any Notes, in any foreign country, except in
accordance with all applicable laws, rules and regulations.
3. Each Agent and the Company agree to perform the respective
duties and obligations specifically provided to be performed by them in the
Procedures.
4. The Company agrees with each of you:
(a) To make no further amendment or any supplement to the
Registration Statement, Basic Prospectus or Prospectus Supplement
(except for (i) periodic or current reports filed under the Exchange
Act, (ii) a supplement relating to any offering of Notes providing
solely for the specification of or a change in the maturity dates,
interest rates, issuance prices or other similar terms of any Notes or
(iii) a supplement relating to an offering of securities registered
under the Registration Statement (the "Securities") other than the
Notes) after the date of this Agreement and prior to the termination
of the offering of the Notes (including by way of resale by a
Purchaser of Notes) unless the Company shall have furnished to each of
you a copy of any such proposed amendment or supplement for your
review prior to the filing thereof and shall have given to each of you
a reasonable opportunity to comment on any such proposed amendment or
supplement; provided, that, subsequent to the execution of any Terms
Agreement or the agreement of any person to purchase and pay for Notes
pursuant to a solicitation by any of the Agents, as the case may be,
and prior to the subsequent sale of the Notes pursuant to such Terms
Agreement or agreement, as the case may be, the Company will make no
amendment or supplement to the Registration Statement, Basic
Prospectus or Prospectus Supplement, except as described in clauses
(i), (ii) and (iii) above, without the prior approval of the Purchaser
or the soliciting Agent, as the case may be; subject to the foregoing
provisions of this Section 4(a), to cause each supplement to the
Prospectus and each amended Prospectus to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) under the Act; to
advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or when the Prospectus, any supplement to the
Prospectus or any amended Prospectus has been filed, and to furnish
you copies thereof; to file timely all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act during the period when a prospectus relating to the
Notes is required to be delivered; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
prospectus, of the suspension of the qualification of the Notes for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Notes for offering and sale under
the securities laws of such jurisdictions in the U.S. and Canada as
you may reasonably request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes,provided, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(c) To furnish you with copies of the Prospectus and any
supplements thereto in such quantities as you may from time to time
reasonably request, and, if, at any time when a prospectus relating to
the Notes is required to be delivered under the Act in the judgment of
counsel for the Agents, any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state
6
<PAGE> 7
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend the
Registration Statement or amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify you to suspend solicitation of
offers to purchase Notes (and, if so notified, each of you shall
forthwith suspend such solicitation and cease using the Prospectus as
then supplemented) and upon your reasonable request to file such
document and to prepare and furnish without charge to you as many
copies as you may from time to time reasonably request of an amended
Registration Statement or an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect
such compliance (if such amendment or supplement, and any documents,
certificates and opinions furnished to each of you pursuant to Section
4(l) in connection with the preparation or filing of such amendment or
supplement, are reasonably satisfactory in all respects to you, you
will, upon the filing of such amendment or supplement with the
Commission and upon the effectiveness of an amendment to the
Registration Statement, if required, resume your obligation to solicit
offers to purchase Notes hereunder);
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including at the option of the Company Rule 158);
(e) During the period, if any, specified in any Terms
Agreement, not to offer, sell, contract to sell or otherwise dispose
of debt securities of the Company which are substantially similar to
the Notes to which such Terms Agreement relates, except (x) with your
prior written consent, (y) as described in the Prospectus, as amended
or supplemented prior to the date of the applicable Terms Agreement or
(z) pursuant to borrowings under the Company's credit facilities or
other lines of credit established by the Company prior to the date of
the applicable Terms Agreement;
(f) To furnish to the holders of the Notes as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) Prior to the termination of the offering of the Notes
(including by way of resale by a Purchaser of Notes), to furnish to
you copies of all reports or other communications (financial or other)
furnished to stockholders, and deliver to you (i) as soon as they are
available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed;
(h) Each acceptance by the Company of an offer to purchase
Notes will be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the
time of such acceptance, as though made at and as of such time, and a
covenant that such representations and warranties will be true and
correct at the time of delivery to the purchaser of the Notes relating
to such acceptance, as though made at and as of such time (it being
understood that for purposes of the foregoing affirmation and covenant
such representations and warranties shall relate to the Registration
Statement and Prospectus, as amended or supplemented at each such
time). Each such acceptance by the Company of an offer for the
purchase of Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that, as of the
settlement date for the sale of such Notes, after giving
7
<PAGE> 8
effect to the issuance of such Notes, of any other Notes to be issued
on or prior to such settlement date and of any other Securities to be
issued and sold by the Company on or prior to such settlement date,
the aggregate amount of Securities (including the Notes) which have
been issued and sold by the Company will not exceed the amount of
Securities registered pursuant to the Registration Statement. The
Company will inform you promptly upon your request of the aggregate
amount of Securities registered under the Registration Statement which
remain unsold;
(i) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment or
supplement (i) relating to any offering of Securities other than the
Notes, (ii) providing solely for the specification of or a change in
the maturity dates, the interest rates, the issuance prices or other
similar terms of any Notes sold pursuant hereto or (iii) resulting
from the filing by the Company of a Current Report on Form 8-K which,
in the judgment of the Company in consultation with its outside
counsel, is not material, the Company will deliver or cause to be
delivered promptly to each of you a certificate of the Company
(executed by any two officers of the Company), dated the date of the
effectiveness of such amendment or the date of the filing of such
supplement, in form reasonably satisfactory to you, of the same tenor
as the certificate delivered to you in connection with the execution
of this Agreement pursuant to Section 6(e) but modified to relate to
the Registration Statement and the Prospectus, as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement, or, in lieu of such certificate, a
certificate to the effect that the statements contained in the
certificate delivered to you in connection with the execution of this
Agreement pursuant to Section 6(e) are true and correct at such date
as though made at and as of such date (except that such statements
shall be deemed to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement;
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment or
supplement (i) relating to any offering of Securities other than the
Notes, (ii) providing solely for the specification of or a change in
the maturity dates, the interest rates, the issuance prices or other
similar terms of any Notes sold pursuant hereto, (iii) setting forth
or incorporating by reference financial statements or other
information as of and for a fiscal quarter or (iv) resulting from the
filing by the Company of a Current Report on Form 8-K which, in the
judgment of the Company, in consultation with its outside counsel, is
not material, unless, in the case of clause (iii) above, in the
reasonable judgment of Salomon Brothers Inc, such financial statements
or other information is of such a nature that an opinion of counsel
should be furnished), the Company shall furnish or cause to be
furnished promptly to each of you a written opinion of counsel of the
Company satisfactory to each of you, dated the date of the
effectiveness of such amendment or the date of the filing of such
supplement, in form reasonably satisfactory to each of you, of the
same tenor as the opinion referred to in Section 6(c) but modified to
relate to the Registration Statement and the Prospectus, as amended
and supplemented to the time of the effectiveness of such amendment or
the filing of such supplement, or, in lieu of such opinion, counsel
last furnishing such an opinion to you may furnish each of you with a
letter to the effect that you may rely on such last opinion to the
same extent as though it were dated the date of such letter
authorizing reliance (except that statements in such last opinion will
be deemed to relate to the Registration Statement and the Prospectus,
as amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement);
(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented to include or incorporate
amended or supplemental financial information, the Company shall cause
its independent public accountants promptly to furnish each of you a
letter, dated the date of the effectiveness of such amendment or the
date of the filing of such supplement, in form satisfactory to each of
you, of the same tenor as the letter referred to in Section 6(e) with
such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by
reference in the Registration Statement and the Prospectus, as amended
or supplemented to the date of such letter; provided, however, that, if
8
<PAGE> 9
the Registration Statement or the Prospectus is amended or
supplemented solely to include or incorporate by reference financial
information as of and for a fiscal quarter, the Company's independent
public accountants may limit the scope of such letter, which shall be
reasonably satisfactory in form to each of you, to the unaudited
financial statements, the related "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and any
other information of an accounting, financial or statistical nature
included in such amendment or supplement, unless, in the reasonable
judgment of any of you, such letter should cover other information or
changes in specified financial statement line items; and
(l) The Company shall furnish to each of you such
information, documents, certificates of any two officers of the
Company and opinions of counsel for the Company relating to the
business, operations and affairs of the Company, the Registration
Statement and any amendments thereof, the Prospectus and any
amendments thereof or supplements thereto the Indentures, the Notes,
this Agreement, the Procedures and the performance by the Company and
you of its and your respective obligations hereunder and thereunder as
any of you may from time to time and at any time prior to the
termination of this Agreement reasonably request.
5. The Company covenants and agrees with you that it will pay
or cause to be paid the following, whether or not any sale of Notes is
consummated: (i) the fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Notes under the Act
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement, the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to you; (ii) the cost
of printing or producing this Agreement, any Terms Agreement, the Indentures,
the Blue Sky Memorandum and any other documents in connection with the
offering, purchase, sale and delivery of the Notes; (iii) all expenses in
connection with the qualification of the Notes for offering and sale under
state securities laws as provided in Section 4(b) hereof, including the fees
and disbursements of counsel for the Agents in connection with such
qualification and in connection with the Blue Sky survey; (iv) any fees charged
by securities rating services for rating the Notes; (v) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Notes; (vi) the costs
of preparing and delivering the Notes to each Purchaser, including any capital,
stamp or other tax or duty payable upon the issuance of the Notes; (vii) the
fees and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indentures and
the Notes; (viii) all expenses and listing fees, if any, in connection with the
listing of the Notes on the New York Stock Exchange; (ix) all out-of-pocket
expenses (including without limitation advertising expenses approved in advance
by the Company), if any, incurred by you in connection with this Agreement; (x)
the fees and expenses of your one counsel on behalf of all of you incurred in
connection with this Agreement and (xi) all other costs and expenses incident
to the performance of its obligations hereunder and under any Terms Agreement
which are not otherwise specifically provided for in this Section. It is
understood, however, that except as provided in this Section, Section 2(a),
Section 9 and Section 10 hereof, you will pay all of your own additional costs
and expenses, including transfer taxes on resale of any of the Notes by you.
6. The obligations of the Agents hereunder shall be subject,
in their discretion, to the condition that all representations and warranties
and other statements of the Company herein are, at and as of the date hereof,
the Effective Date, the date on which any supplement to the Prospectus is filed
with the Commission, and each Closing Date, true and correct, the condition
that the statements of the Company made in any certificate pursuant to the
provisions hereof are true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section
4(a) hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been
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<PAGE> 10
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) Simpson Thacher & Bartlett, counsel for the Agents, shall
have furnished to you such opinion or opinions, dated the date hereof,
with respect to the incorporation of the Company, this Agreement, the
Indentures, the validity of the Notes, the Registration Statement, the
Prospectus (together with any supplement thereto), and other related
matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Andrews & Kurth L.L.P., counsel for the Company, shall
have furnished to you their written opinion, dated the date hereof, in
form and substance satisfactory to you, 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, with requisite corporate
power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized
capitalization as set forth in the Prospectus;
(iii) The Company has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in
which it owns or leases a material amount of properties, or
conducts any material business, so as to require such
qualification, or is subject to no material liability or
disability by reason of failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect
of matters of fact upon certificates of public officials or
officers of the Company, provided, that such counsel shall
state that they believe that both you and they are justified
in relying upon such certificates);
(iv) Each Material Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
to the best of such counsel's knowledge after reasonable
investigation, Unimar has been duly formed and is validly
existing as a partnership under the laws of the State of
Texas; and all of the issued shares of capital stock of each
Material Subsidiary have been duly and validly authorized and
issued and are fully paid and non- assessable, and (except for
directors' qualifying shares and shares held by third parties
solely to satisfy local law requirements and except as
otherwise set forth in the Prospectus), to the best of such
counsel's knowledge after reasonable investigation and except
as set forth in a schedule to such counsel's opinion, all of
such shares of capital stock and 50% of the equity interests
in Unimar are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or
claims within the meaning of the Uniform Commercial Code (such
counsel being entitled to (A) state that the opinion in this
clause relating to the ownership of capital stock and equity
interests is based solely on a review of the corporate records
of the Company and its subsidiaries and the records of Unimar,
the certificate or certificates representing such shares of
capital stock and evidence of such equity interests in Unimar
and a certificate or certificates in respect of matters of
fact as to ownership of and liens, encumbrances, equities or
claims on such shares of capital stock and equity interests,
provided, that such counsel shall state that they believe that
both you and they are justified in relying upon such
certificate or certificates and (B) rely in respect of matters
of fact upon certificates of public officials or officers of
the Company or its subsidiaries furnished to you at the time
of delivery of such opinion, provided, that such counsel shall
state that they believe that both you and they are justified
in relying upon such certificates);
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<PAGE> 11
(v) To the best of such counsel's knowledge
after reasonable investigation, other than as set forth in the
Prospectus, there is no pending or threatened action, suit or
proceeding before any court or any governmental agency or body
or any arbitrator involving the Company, any Material
Subsidiary or Unimar required to be disclosed in the
Registration Statement that is not adequately disclosed
therein;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company;
(vii) The Notes have been duly authorized and,
when executed, issued and delivered by the Company and,
assuming the due authentication thereof by the Trustee, will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the applicable
Indenture; and the Notes (subject to the insertion in the
Notes of the maturity dates, the interest rates, and other
similar terms thereof which will be described in supplements
to the Prospectus as contemplated by Section 1(a) hereof) and
the Indentures conform to the descriptions thereof in the
Prospectus;
(viii) The Senior Indenture has been duly
authorized, executed and delivered by the Company and,
assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing; and each
Indenture has been duly qualified under the Trust Indenture
Act;
(ix) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, each Indenture and this Agreement and the consummation
of the transactions herein and therein contemplated will not
result in any violation of the Restated Certificate of
Incorporation or By-laws of the Company and, to the best of
such counsel's knowledge after reasonable investigation, such
actions will not result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
Material Subsidiaries or, to the best of such counsel's
knowledge, Unimar is a party or by which the Company or any of
its Material Subsidiaries or, to the best of such counsel's
knowledge, Unimar is bound or to which any of the property or
assets of the Company or any of its Material Subsidiaries
or, to the best of such counsel's knowledge, Unimar is
subject, or any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body
having jurisdiction over the Company, any of its Material
Subsidiaries or, to the best of such counsel's knowledge,
Unimar or any of their properties (excluding breaches,
violations and defaults that, individually or in the
aggregate, will not have any material adverse effect on the
general affairs, management, financial position, stockholders'
equity, results of operations or prospects of the Company and
its subsidiaries taken as a whole);
(x) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body having jurisdiction over the
Company is required for the consummation by the Company of the
transactions contemplated by this Agreement or either
Indenture, except such as have been obtained under the Act and
the Trust Indenture Act, and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Notes by the Agents;
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<PAGE> 12
(xi) The statements made in the Prospectus under
the captions "Description of the Debt Securities" and
"Description of Medium-Term Notes, Series A" insofar as they
purport to constitute summaries of the legal matters and
documents referred to therein, fairly present the information
called for with respect to such legal matters and documents
and fairly summarize such legal matters and documents;
(xii) The Company is not an "investment company"
within the meaning of the Investment Company Act and the
published rules and regulations of the Commission thereunder,
and no registration of the Company under the Investment
Company Act is required for, or will be required as a
consequence of, the issuance, offer and sale of the Notes
pursuant to this Agreement;
(xiii) The documents incorporated by reference in
the Prospectus or any further amendment or supplement thereto
made by the Company prior to the date of such opinion (other
than the financial statements and related schedules and
engineering and statistical data therein, as to which such
counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the published rules and regulations of the Commission
thereunder; and
(xiv) The Registration Statement and the
Prospectus and any further amendments and supplements thereto
made by the Company prior to the date of such opinion (other
than the financial statements and related schedules and
engineering and statistical data therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Trust Indenture Act and the published rules and regulations of
the Commission thereunder.
Such counsel shall state that, although they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in any of the documents referred to in subclause
(xiii) of this Clause (c) or in the Registration Statement or the
Prospectus (except as and to the extent described in subclause (xi) of
this Clause (c)), they have no reason to believe that (i) any of the
documents referred to in subclause (xiii) of this Clause (c) when such
documents became effective or were so filed, as the case may be,
contained, in the case of the Registration Statement, an untrue
statement of a material fact, or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Exchange Act with the Commission, 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, in the light of the circumstances under which they were made
when such documents were so filed, not misleading; or (ii) as of its
effective date, the Registration Statement or any further amendment
thereto made by the Company prior to the date of such opinion (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion or belief) contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to
the date of such opinion (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion or belief) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading or that, as of the date of such opinion, either the
Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion or belief)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration
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<PAGE> 13
Statement required to be filed or of any contracts or other documents
of a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement
or the Prospectus which are not filed or incorporated by reference or
described as required.
In rendering the opinions referred to in subclauses (ii)
(other than with respect to authorized capitalization), (iii), (iv),
(v), (ix) and (x) of this Clause (c), such counsel may rely upon an
opinion of Newton W. Wilson, III, Esq., General Counsel, Vice
President-Administration and Secretary of the Company, furnished to
you at the time of delivery of such opinion,provided, that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinion.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States, the laws of the State of New York
and the State of Texas, and the General Corporation Law of the State
of Delaware.
(d) Price Waterhouse LLP shall have furnished to you a letter
or letters, dated the date hereof, in form and substance satisfactory
to you, to the effect set forth in Annex II hereto; and
(e) The Company shall have furnished or caused to be
furnished to you on the date hereof and at any time prior to the
termination of this Agreement certificates of the Company (executed
by any two officers of the Company) and opinions of in-house counsel
for the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of the
date thereof (provided, that with respect to any certificate delivered
as of any initial Closing date as to the accuracy of the
representations and warranties contained in subsections 1(c), (d),
(e) and (h), the references in such subsections to the Prospectus
shall be deemed to be references to the Prospectus as amended and
supplemented as of the time of the applicable Terms Agreement or the
agreement of the purchaser to purchase and pay for the Notes, as the
case may be), as to the matters set forth in subsection (a) of this
Section, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the date
thereof and as to such other matters as you may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in
this Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be in all material
respects reasonably satisfactory in form and substance to such Agents
and counsel for the Agents, this Agreement and all obligations of any
Agent hereunder may be canceled at any time by the Agents. Notice of
such cancellation shall be given to the Company in writing or by
telephone confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Simpson Thacher & Bartlett, counsel for
the Agents, at 425 Lexington Avenue, New York, New York, on the date
hereof.
7. The obligations of a Purchaser to purchase any Notes shall
be subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of the
date of the related Terms Agreement and as of the Closing Date for such Notes,
true and correct in all material respects, the condition that the Company shall
have performed in all material respects all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been instituted or
threatened by the Commission;
(b) To the extent agreed to between the Company and the
Purchaser in a Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as of
the Closing Date, of the same tenor as the certificate delivered to
the
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<PAGE> 14
Agents in connection with the execution of this Agreement pursuant
to Section 6(e), (ii) the opinion of Andrews & Kurth L.L.P., counsel
for the Company, dated as of the Closing Date, to the effect set forth
in Section 6(c), (iii) the opinion of Simpson Thacher & Bartlett,
counsel for the Purchaser, dated as of the Closing Date, to the effect
set forth in Section 6(b), and (iv) letter of Price Waterhouse LLP,
dated as of the Closing Date, to the effect set forth in Section 6(d);
and
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request.
If any of the conditions specified in this Section 7 shall not
have been fulfilled in all material respects when and as provided in this
Agreement and the applicable Terms Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement or such Terms
Agreement and required to be delivered to the Purchaser pursuant to the terms
hereof and thereof shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser and its counsel, such Terms
Agreement and all obligations of the Purchaser thereunder and with respect to
the Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancellation shall be
given to the Company in writing or by telephone confirmed in writing.
8. (a) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any of the Agents
shall have the right to refuse to purchase such Note if, at the Closing Date
therefor, any condition set forth in Section 6 or 7, as applicable, shall not
be satisfied.
(b) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any of the Agents
shall have the right to refuse to purchase such Note if, subsequent to the
agreement to purchase such Note, any change, condition or development specified
in any of Sections 10(b)(i) through (v) shall have occurred (with the judgment
of the Agent which presented the offer to purchase such Note being substituted
for any judgment of a purchaser required therein) (it being understood that
under no circumstance shall any such Agent have any duty or obligation to the
Company or to any such person to exercise the judgment permitted to be
exercised under this Section 8(b) and Section 10(b)).
9. (a) The Company will indemnify and hold harmless each
Agent against any losses, claims, damages or liabilities, joint or several, to
which such Agent may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Notes as originally filed or in any amendment thereto or the Prospectus
or any preliminary prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Agent for any legal or other
expenses reasonably incurred by such Agent in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in the registration statement for the registration of the Notes as
originally filed or in any amendment thereto or the Prospectus or any
preliminary prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such Agent
expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities
as originally filed or in any amendment thereto or the
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<PAGE> 15
Prospectus or any preliminary prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the registration statement for the
registration of the Notes as originally filed or in any amendment thereto or
the Prospectus or any preliminary prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by a party entitled to
indemnification under subsection (a) or (b) above (the "indemnified party") of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against a party required to provide
indemnification to such indemnified party under such subsection (the
"indemnifying party"), notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (which shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. In no event shall an
indemnifying party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel), apart from counsel to such indemnifying
party, for all indemnified parties in connection with any one action or
separate but similar or related actions arising out of the same general
allegations or circumstances. No indemnifying party shall be liable for any
settlement of any such action effected without its consent, provided, that such
consent is not unreasonably withheld or delayed.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Agents on
the other from the offering of the Notes. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Agents on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Agents on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes (before
deducting expenses) from which such losses, claims, damages or liabilities (or
actions in respect thereof) arise received by Company bear to the total
commissions received by such of the Agents in connection with the sale of Notes
from which such losses, claims, damages or liabilities (or actions in respect
thereof) arise (or, in the case of Notes sold pursuant to any Terms Agreement,
the aggregate commissions that would have been received by such of the Agents
if such commissions had been payable). The relative fault 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 on the one hand or
the Agents on the other and the parties' relative intent, knowledge, access to
information and opportunity to
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<PAGE> 16
correct or prevent such statement or omission. The Company and each Agent agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Agents were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Agent shall be
required to contribute any amount in excess of the commissions received by such
Agent in connection with the sale of Notes from which such losses, claims,
damages or liabilities (or actions in respect thereof) arise (or, in the case
of Notes sold pursuant to any Terms Agreement, the aggregate commissions that
would have been received by such of the Agents if such commissions had been
payable). No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 9 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Agent within the meaning of the Act; and the obligations of each
Agent under this Section 9 shall be in addition to any liability which such
Agent may otherwise have and shall extend, upon the same terms and conditions,
to each officer and director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
10. (a) This Agreement will continue in effect until
terminated as provided in this Section 10. This Agreement may be terminated
either by the Company as to any Agent or by any of you insofar as this
Agreement relates to any Agent, by giving written notice of such termination to
such Agent or the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day following the
receipt of such notice by the party to whom such notice is given. In the event
of such termination, no party shall have any liability to the other party
hereto, except as provided in the fourth paragraph of Section 2(a), Section 5,
Section 9 and Section 10 and Section 11.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the Company prior
to delivery of any payment for any Note to be purchased thereunder, if prior to
such time (i) any downgrading shall have occurred subsequent to the agreement
to purchase such Note in the rating accorded the Company's debt securities by
any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, (ii)
any such organization shall have publicly announced subsequent to the agreement
to purchase such Note that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities,
(iii) there shall have been imposed a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, (iv) a general
moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (v) there shall
have been an outbreak or escalation of hostilities involving the United States
or the declaration by the United States of a national emergency or war if the
effect of any such event specified in this clause (v) in your judgment makes it
impracticable or inadvisable to proceed with the offering or delivery of such
Notes or the terms and in the manner contemplated in the Prospectus (exclusive
of any supplement thereto).
11. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Agents, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Notes. The provisions of Sections 5 and 9
hereof shall survive the termination or cancellation of this Agreement. The
provisions of this Agreement (including without limitation Section 8 hereof)
applicable to any purchase of a Note for which an agreement to purchase exists
prior to the termination hereof shall survive any termination of this
Agreement. If at the
16
<PAGE> 17
time of termination of this Agreement any Purchaser shall own any Notes with
the intention of selling them, the provisions of Section 4 shall remain in
effect until such Notes are sold by the Purchaser.
12. All statements, requests, notices and agreements
hereunder shall be in writing, and if to any of the Agents shall be delivered
or sent by mail, telex or facsimile transmission to Solomon Brothers Inc at
Seven World Trade Center, New York, N.Y. 10048, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Agents, the Company and, to the extent provided in Sections
9 and 11 hereof, the officers and directors of the Company and each person who
controls the Company or any Agent, and their respective heirs, executors,
administrators, successors and assigns, and, to the extent provided in Section
8, any person who has agreed to purchase Notes, and no other person shall
acquire or have any right under or by virtue of this Agreement.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
17
<PAGE> 18
If the foregoing is in accordance with your understanding,
please sign and return to us nine counterparts hereof, and upon the acceptance
hereof by you this letter and such acceptance hereof shall constitute a binding
agreement between you and the Company.
Very truly yours,
UNION TEXAS PETROLEUM HOLDINGS, INC.
By:____________________________________
Name:
Title:
Accepted as of the date hereof:
SALOMON BROTHERS INC
By:_____________________________________
Name:
Title:
BA SECURITIES, INC.
By:_____________________________________
Name:
Title:
NATIONSBANK CAPITAL MARKETS, INC.
By:_____________________________________
Name:
Title:
UBS SECURITIES INC.
By:_____________________________________
Name:
Title:
18
<PAGE> 19
ANNEX I
<TABLE>
<CAPTION>
MATURITY RANGE OF NOTES PERCENTAGE OF PRINCIPAL AMOUNT
----------------------- ------------------------------
<S> <C>
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 5 years .350%
From 5 years to less than 7 years .500%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to less than 30 years .750%
Greater than 30 years Negotiated at the time of sale
</TABLE>
19
<PAGE> 20
ANNEX II
Pursuant to Section 6(e) of the Selling Agency Agreement, the
accountants shall furnish letters to the Agents to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and financial
statement schedules provided pursuant to Article 12 of Regulation S-X audited
by them and incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and the
applicable related published rules and regulations thereunder with respect to
Registration Statements on Form S-3; and they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the Agents;
(iii) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements referred to below, a reading of
the latest available interim financial data of the Company and its
subsidiaries, a reading of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
regarding the specified items for which representations are requested below,
nothing came to their attention as a result of the foregoing procedures that
caused them to believe that:
(A) the unaudited condensed consolidated statements of
operations, consolidated balance sheets and consolidated statements of
cash flows included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related published rules
and regulations thereunder or are not in conformity with generally
accepted accounting principles, when read in conjunction with the audited
financial statements and notes thereto incorporated by reference in the
Registration Statement, applied on a basis substantially consistent with
the basis for the audited consolidated statements of operations,
consolidated balance sheets and consolidated statements of cash flows
included in the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(B) at the date of the latest available interim financial data
and at a specified date not more than five days prior to the date of such
letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated short-term or long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets
(working capital) or stockholders' equity or other items heretofore
determined with the Agents, or any increases in any items heretofore
determined with the Agents, in each case as compared with amounts shown
in the latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter;
(C) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (B) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of
<PAGE> 21
consolidated net income or other items heretofore determined with the
Agents, or any increases in any items heretofore determined with
the Agents, in each case as compared with the comparable period of the
preceding year, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and
(iv) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Agents which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference) or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Agents or in documents incorporated by reference in the Prospectus specified by
the Agents, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
2
<PAGE> 22
ANNEX III
MATERIAL SUBSIDIARIES
Union Texas Petroleum Energy Corporation
Union Texas International Corporation
Union Texas East Kalimantan Limited
Union Texas Pakistan, Inc.
Union Texas Petroleum Limited
Unistar, Inc.
Union Texas Britannia Limited
Union Texas Finance, Inc.
<PAGE> 1
================================================================================
EXHIBIT 4.2
FORM OF INDENTURE
UNION TEXAS PETROLEUM HOLDINGS, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
______________________
INDENTURE
DATED AS OF NOVEMBER ________, 1995
_______________________
SUBORDINATED DEBT SECURITIES
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Book-Entry Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CEDEL or CEDEL S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certification Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request and Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dollar or $ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Issue Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Non-Recourse Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Required Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
United States Alien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Wholly Owned Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 102. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 103. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 104. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 105. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 106. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 107. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 108. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 109. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 110. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 111. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 112. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 113. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 114. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 115. Corporate Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 116. Counterpart Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 203. Securities in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 204. Book-Entry Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 311. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 403. Discharge of Liability on Securities of Any Series . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 404. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . . . 40
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . . . . 43
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C> <C>
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . 53
SECTION 613. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . . 55
SECTION 702. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . . . . 56
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 802. Successor Person Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 902. Supplemental Indentures With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 905. Conformity With Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 61
</TABLE>
-v-
<PAGE> 7
<TABLE>
<S> <C> <C>
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1003. Money for Securities Payments to be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1004. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1005. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1006. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1007. Statement by Officers as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1008. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1009. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1103. Selection by Trustee of Securities to be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1108. Purchase of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C> <C>
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 1301. Securities Subordinate to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1302. Circumstances Requiring Prior Payment of Senior Indebtedness . . . . . . . . . . . . . . . . . . 72
SECTION 1303. Subrogation of Rights to Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1304. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1305. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1306. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1308. Reliance on Certificate of Liquidating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1309. Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 76
SECTION 1310. Rights of Trustee as Holder of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 1311. Article Applicable to Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 1402. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1403. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1404. Quorum Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1405. Determination of Voting Rights; Conduct
and Adjournment of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1406. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 79
</TABLE>
-vii-
<PAGE> 9
UNION TEXAS PETROLEUM HOLDINGS, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF NOVEMBER ___, 1995
<TABLE>
<CAPTION>
Section of
Trust
Indenture Section(s) of
Act of 1939 Indenture
----------- ---------
<S> <C> <C>
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(c)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(d)
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704, 1007
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602, 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)(1)
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(2)
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(3)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
- ----------------
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be part of the Indenture.
-viii-
<PAGE> 10
INDENTURE, dated as of November ___, 1995, between UNION TEXAS
PETROLEUM HOLDINGS, INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), having its
principal office at 1330 Post Oak Boulevard, Houston, Texas 77056, and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking association as Trustee
(herein called the "Trustee"), the office of the Trustee at which at the date
hereof its corporate trust business is principally administered being One First
National Plaza, Suite 0126, Chicago, IL 60670-0126.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
This Indenture is subject to the provisions of the Trust Indenture Act
and the rules and regulations of the Commission promulgated thereunder that are
required to be part of this Indenture and, to the extent applicable, shall be
governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101.Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United
1
<PAGE> 11
States, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States at the date
of such computation; and
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in Section
102.
"Act," when used with respect to any Holder, has the meaning specified
in Section 105.
"Additional Amounts" means any additional amounts that are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein or pursuant thereto, to be paid by the Company with respect
to certain taxes, assessments or other governmental charges imposed on certain
Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. The Trustee may request and may conclusively rely upon an Officers'
Certificate to determine whether any Person is an Affiliate of any specified
Person.
"Authenticating Agent" means any Person, which may include the
Company, authorized by the Trustee to act on behalf of the Trustee pursuant to
Section 614 to authenticate Securities of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be, made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form established pursuant
to Section 201 which is payable to bearer, including, without limitation,
unless the context otherwise indicates, a Security in temporary or permanent
global bearer form.
2
<PAGE> 12
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" has the meaning specified in Section 204.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or obligated
by law or executive order to close.
"CEDEL" or "CEDEL S.A." means Centrale de Livraison de Valeurs
Mobilieres S.A., or, if any time after the execution of this instrument,
Centrale de Livraison de Valeurs Mobilieres S.A. is not existing and performing
the duties now being performed by it, then the successor Person performing such
duties.
"Certification Date" means with respect to Securities of any series
(i) if Bearer Securities of such series are not to be initially represented by
a temporary global Security, the date of delivery of the definitive Bearer
Security and (ii), if Bearer Securities of such series are initially
represented by a temporary global Security, the earlier of (A) the Exchange
Date with respect to Securities of such series and (B), if the first Interest
Payment Date with respect to Securities of such series is prior to such
Exchange Date, such Interest Payment Date.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the
Board, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Controller, an Assistant Controller, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Conversion Event" has the meaning specified in Section 501.
3
<PAGE> 13
"Corporate Trust Office" means the principal office of the Trustee in
the City of Chicago, Illinois, at which at any particular time its corporate
trust business shall be principally administered, which office at the date
hereof is that indicated in the introductory paragraph of this Indenture.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a global Security, the Person designated as
Depositary by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person,
"Depositary" as used with respect to the Securities of any series shall mean
the Depositary with respect to the Securities of that series.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Euroclear" means the operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Exchange Rate" has the meaning specified in Section 501.
"Holder", when used with respect to any Security, means in the case of
a Registered Security the Person in whose name the Security is registered in
the Security Register and in the case of a Bearer Security the bearer thereof
and, when used with respect to any coupon, means the bearer thereof.
"Indebtedness", as applied to any Person, means all indebtedness,
whether or not represented by bonds, debentures, notes or other securities,
created or assumed by such Person for the repayment of money borrowed, and
obligations, computed in accordance with generally accepted accounting
principles, as lessee under leases that should be, in accordance with generally
accepted accounting principles, recorded as capital leases. All Indebtedness
of others guaranteed as to payment of principal by such Person or in effect
guaranteed by such Person through a contingent agreement to purchase such
Indebtedness shall for all purposes hereof by deemed to be Indebtedness of such
Person.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities
4
<PAGE> 14
established as contemplated by Section 301 and the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this instrument.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Issue Date" means the date on which the Securities are originally
issued under this Indenture.
"Judgment Currency" has the meaning specified in Section 506.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Non-Recourse Indebtedness" means, at any date, the aggregate amount
at such date of Indebtedness of the Company or a Subsidiary in respect of which
the recourse of the holder of such Indebtedness, whether direct or indirect and
whether contingent or otherwise, is effectively limited to specified assets.
"Officer" means the Chairman, the President, the Treasurer, any
Assistant Treasurer, Controller, Secretary, Assistant Secretary or any Vice
President of a Person.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, the
Controller, the Secretary or an Assistant Treasurer, Assistant Controller or
Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company, rendered, if applicable, in
accordance with Section 314(d) of the Trust Indenture Act.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
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(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there
shall have been presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether a
quorum is present at a meeting of Holders of Securities, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the principal amount thereof that would
be due and payable as of the date of such determination upon acceleration of
the Maturity thereof pursuant to Section 502, (b) the principal amount of a
Security denominated in a foreign currency shall be the U.S. dollar equivalent,
determined by the Company on the date of original issuance of such Security, of
the principal amount (or, in the case of an Original Issue Discount Security,
the U.S. dollar equivalent, determined on the date of original issuance of such
Security, of the amount determined as provided in (a) above), of such Security
and (c) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver or upon any such
determination as to the presence of a quorum, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person, which may include the Company,
authorized by the Company to pay the principal of (and premium, if any) or
interest on any one or more series of Securities on behalf of the Company.
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"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof or other entity
of any kind.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified in
accordance with Section 301 subject to the provisions of Section 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains, shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen coupon appertains,
as the case may be.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security in the form established
pursuant to Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 301, or, if not so specified, the last
day of the calendar month preceding such Interest Payment Date if such Interest
Payment Date is the fifteenth day of the calendar month or the fifteenth day of
the calendar month preceding such Interest Payment Date if such Interest
Payment Date is the first date of a calendar month, whether or not such day
shall be a Business Day.
"Required Currency" has the meaning specified in Section 506.
"Responsible Officer", when used with respect to the Trustee, means
the Chairman or any Vice Chairman of the Board of Directors, the Chairman or
any Vice Chairman of the Executive Committee of the Board of Directors, the
Chairman of the Trust Committee, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the
Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer,
the Controller or any Assistant Controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
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"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means Indebtedness of the Company, whether
currently outstanding or hereafter issued, which is not subordinated by its
terms in right of payment to any other unsecured Indebtedness of the Company or
ranks pari passu with subordinated Indebtedness of any series of the Company;
provided that "Senior Indebtedness" shall not include (i) Indebtedness of the
Company to any Subsidiary for money borrowed or advanced from such Subsidiary
or (ii) amounts owed (except to banks and other financial institutions) for
goods, materials or services purchased in the ordinary course of business.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 905.
"United States" means the United States of America (including the
States and the District of Columbia) and its "possessions", which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
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"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
"U.S. Government Obligations" has the meaning specified in Section 401.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Wholly Owned Subsidiary" means a corporation all the outstanding
voting stock (other than any directors' qualifying shares) of which is owned,
directly or indirectly, by the Company or by one or more other Wholly Owned
Subsidiaries, or by the Company and one or more other Wholly Owned
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Yield to Maturity", when used with respect to any Original Issue
Discount Security, means the yield to maturity, if any, set forth on the face
thereof.
SECTION 102. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms used in this Indenture have
the following meanings:
"Bankruptcy Act" means the Bankruptcy Act or Title 11 of the United
States Code.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All the other Trust Indenture Act terms used in this Indenture that
are defined by the Trust Indenture Act, defined by Trust Indenture Act
reference to another statute or defined by Commission
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rule under the Trust Indenture Act and not otherwise defined herein have the
meanings assigned to them therein.
SECTION 103. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any (including
any covenants the compliance with which constitutes a condition precedent),
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any (including any covenants the
compliance with which constitutes a condition precedent), have been complied
with, except that in the case of any such application or request as to which
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
Person, such Person has made such examination or investigation as is
necessary to enable such Person to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 105. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given by Holders of such
series may, alternatively, be embodied in and evidenced by the record of Holders
of Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at a meeting of Holders of Securities of such
series duly called and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such records. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are deliverable to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
the holding of any Person of a Security, shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 1306.
The Company may set in advance a record date for purposes of
determining the identity of Holders of Registered Securities entitled to vote
or consent to any action by vote or consent authorized or permitted under this
Indenture, which record date shall be the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation. If a record date is fixed,
those Persons who were Holders of Outstanding Registered Securities at such
record date (or their duly designated proxies), and only those Persons, shall
be entitled with respect to such Securities to take such action by vote or
consent
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or to revoke any vote or consent previously given, whether or not such Persons
continue to be Holders after such record date. Promptly after any record date
is set pursuant to this paragraph, the Company, at its own expense, shall cause
notice thereof to be given to the Trustee in writing in the manner provided in
Section 106 and to the relevant Holders as set forth in Section 107.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Registered Securities
held by any Person, and the date of holding the same, shall be proved by the
Security Register.
(d) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate bearing a later date issued in respect
of the same Bearer Security is produced, (2) such Bearer Security is produced to
the Trustee by some other Person, (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may also be proved in any other
manner which the Trustee deems sufficient.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security. Any Holder or subsequent Holder may revoke the request, demand,
authorization, direction, notice, consent or other Act as to his Security or
portion of his Security; provided, however, that such revocation shall be
effective only if the Trustee receives the notice of revocation before the date
the Act becomes effective.
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SECTION 106. Notices, Etc., to Trustee and Company
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Services Division or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it (a) in the case of
Registered Securities, at the address of its principal office specified
in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company,
Attention: General Counsel; and (b) in the case of Bearer Securities,
at the address of an office or agency located outside the United States
maintained by the Company in accordance with Section 1002.
SECTION 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of Securities of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) (i) to Holders of Registered Securities if in writing and
mailed, first-class postage prepaid, to each Holder affected by such event, at
the address of such Holder as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice and (ii) to Holders of Bearer Securities if published
in an Authorized Newspaper in the City of New York and London or other capital
city in Western Europe and in such other city or cities as may be specified in
such Bearer Securities on a Business Day at least twice, the first such
publication to be not earlier than the earliest date, and not later than the
latest date, prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service, or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Securities by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder. In any case in which notice to
Holders of Registered Securities is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular holder
of a Registered Security, shall affect the sufficiency of such notice with
respect to other Holders of Registered Securities or the sufficiency of any
notice to Holders of Bearer Securities given as provided herein.
In case by reason of the suspension of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice to Holders of Bearer Securities as provided above, then
such notification to Holders of Bearer Securities as shall be made
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with the approval of the Trustee for such Securities shall constitute sufficient
notice to such Holders for every purpose hereunder. Neither the failure to give
notice by publication to Holders of Bearer Securities as provided above, nor any
defect in any notice so published, shall affect the sufficiency of any notice to
Holders of Registered Securities given as provided herein.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision hereof which is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision of the Trust Indenture Act shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the former provision shall
be deemed to apply to this Indenture as so modified or to be excluded.
SECTION 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or in the Securities (or any
coupon appertaining thereto) shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities (or any coupon
appertaining thereto), express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any Authenticating Agent,
Paying Agent and Security Registrar, and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
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SECTION 113. Governing Law.
THIS INDENTURE AND THE SECURITIES (OR ANY COUPON APPERTAINING THERETO)
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities or coupons appertaining thereto) payment of principal and interest
(and premium and Additional Amounts, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
SECTION 115. Corporate Obligation.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director
or employee of the Company or the Trustee or of any predecessor or successor of
the Company or the Trustee with respect to the Company's obligations on the
Securities or any coupons appertaining thereto or the obligations of the
Company or the Trustee under this Indenture or any certificate or other writing
delivered in connection herewith. Each Holder by accepting a Security waives
all such recourse.
SECTION 116. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons appertaining thereto
shall be in substantially such form or forms (including temporary or permanent
global form) as shall be established by or pursuant to a Board
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<PAGE> 25
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities or coupons appertaining thereto, as evidenced by their execution of
the Securities or coupons appertaining thereto. If temporary Securities of any
series are issued in global form as permitted by Section 304, the form thereof
shall be established as provided in the preceding sentence. A copy of the Board
Resolution establishing the form or forms of Securities or coupons appertaining
thereto of any series (or any such temporary global Security) shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities (or any such temporary global Security) or coupons appertaining
thereto.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons appertaining thereto attached.
The definitive Securities and coupons appertaining thereto, if any,
shall be printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Securities or coupons appertaining thereto, as evidenced by their execution
thereof.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
"This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
AS TRUSTEE
By _____________________________________
Authorized Signatory".
SECTION 203. Securities in Global Form.
If Securities of a series are issuable in global form, as contemplated
by Section 301, then, notwithstanding clause (10) of Section 301 and the
provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may
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from time to time be reduced to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the Trustee in
such manner and upon instructions given by such Person or Persons as shall be
specified in such Security or in a Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304. Subject to the provisions of Section
303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified in such Security or in the applicable Company
Order. If a Company Order pursuant to Section 303 or 304 has been, or
simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 103 and need not be accompanied by an
Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 103 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of
(and premium, if any) and interest on any Security in permanent global form
shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company or of the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a global Security as shall be
specified in a written statement, if any, of the Holder of such global Security
or, in the case of a global Bearer Security, of Euroclear or CEDEL S.A., which
is produced to the Security Registrar by such Holder, Euroclear or CEDEL S.A.,
as the case may be.
Global Securities may be issued in either registered or bearer form
and in either temporary or permanent form. Permanent global Securities will be
issued in definitive form.
SECTION 204. Book-Entry Securities.
Notwithstanding any provision of this Indenture to the contrary:
(a) At the discretion of the Company, any Registered Security may be
issued from time to time, in whole or in part, in permanent global form
registered in the name of a Depositary, or its nominee. Each such Registered
Security in permanent global form is hereafter referred to as a "Book-Entry
Security". Upon such election, the Company shall execute, and the Trustee or an
Authenticating Agent shall authenticate and deliver, one or more Book-Entry
Securities that (i) are denominated in an amount equal to the aggregate
principal amount of the Outstanding Securities of
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such series, (ii) are registered in the name of the Depositary or its nominee,
(iii) are delivered by the Trustee or an Authenticating Agent to the Depositary
or pursuant to the Depositary's instructions and (iv) bear a legend in
substantially the following form (or such other form as the Depositary and the
Company may agree upon):
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
[THE DEPOSITARY], TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF [NOMINEE OF THE DEPOSITARY] OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF [THE
DEPOSITARY] (AND ANY PAYMENT IS MADE TO [NOMINEE OF THE DEPOSITARY] OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF [THE DEPOSITARY]), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, [NOMINEE OF THE DEPOSITARY], HAS AN INTEREST
HEREIN.
(b) Any Book-Entry Security shall be initially executed and delivered
as provided in Section 303. Notwithstanding any other provision of this
Indenture, unless and until it is exchanged in whole or in part for Registered
Securities not issued in global form, a Book-Entry Security may not be
transferred except as a whole by the Depositary to a nominee of such Depositary,
by a nominee of such Depositary to such Depositary or another nominee of such
Depositary, or by such Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company or the Trustee
that it is unwilling or unable to continue as Depositary for any Book-Entry
Securities, the Company shall appoint a successor Depositary, whereupon the
retiring Depositary shall surrender or cause the surrender of its Book-Entry
Security or Securities to the Trustee. The Trustee shall promptly notify the
Company upon receipt of such notice. If a successor Depositary has not been so
appointed by the effective date of the resignation of the Depositary, the
Book-Entry Securities will be issued as Registered Securities not issued in
global form, in an aggregate principal amount equal to the principal amount of
the Book-Entry Security or Securities theretofore held by the Depositary.
The Company may at any time and in its sole discretion determine that
the Securities shall no longer be Book-Entry Securities represented by a global
certificate or certificates, and will so notify the Depositary. Upon receipt of
such notice, the Depositary shall promptly surrender or cause the surrender of
its Book-Entry Security or Securities to the Trustee. Concurrently therewith,
Registered Securities not issued in global form will be issued in an aggregate
principal amount equal to the principal amount of the Book-Entry Security or
Securities theretofore held by the Depositary.
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Upon any exchange of Book-Entry Securities for Registered Securities
not issued in global form as set forth in this Section 204(c), such Book-Entry
Securities shall be cancelled by the Trustee, and Securities issued in exchange
for such Book-Entry Securities pursuant to this Section shall be registered in
such names and in such authorized denominations as the Depositary for such
Book-Entry Securities, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee or any
Authenticating Agent shall deliver such Securities to the persons in whose
names such Securities are so registered.
(d) The Company and the Trustee shall be entitled to treat the Person
in whose name any Book-Entry Security is registered as the Holder thereof for
all purposes of the Indenture and any applicable laws, notwithstanding any
notice to the contrary received by the Trustee or the Company; and the Trustee
and the Company shall have no responsibility for transmitting payments to,
communication with, notifying, or otherwise dealing with any beneficial owners
of any Book-Entry Security. Neither the Company nor the Trustee shall have any
responsibility or obligations, legal or otherwise, to the beneficial owners or
to any other party including the Depositary, except for the Holder of any
Book-Entry Security, provided, however, notwithstanding anything herein to the
contrary, (i) for the purposes of determining whether the requisite principal
amount of Outstanding Securities have given, made or taken any request, demand,
authorization, direction, notice, consent, waiver, instruction or other action
hereunder as of any date, the Trustee shall treat any Person specified in a
written statement of the Depositary with respect to any Book-Entry Securities as
the Holder of the principal amount of such Securities set forth therein and (ii)
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or Trustee, from giving effect to any written certification, proxy or
other authorization furnished by a Depositary with respect to any Book-Entry
Securities, or impair, as between a Depositary and holders of beneficial
interests in such Securities, the operation of customary practices governing the
exercise of the rights of the Depositary as Holder of such Securities.
(e) So long as any Book-Entry Security is registered in the name of a
Depositary or its nominee, all payments of the principal of (and premium, if
any) and interest on such Book-Entry Security and redemption thereof and all
notices with respect to such Book Entry Security shall be made and given,
respectively, in the manner provided in the arrangements of the Company with
such Depositary.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
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The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or
1107);
(3) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities or both, whether any
Securities of the series are to be issuable initially in temporary
global form and whether any Securities of the series are to be issuable
in permanent global form, as Book-Entry Securities or otherwise, with
or without coupons appertaining thereto and, if so, whether beneficial
owners of interests in any such permanent global Security may exchange
such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in
Section 305, and the Depositary for any global Security or Securities;
(4) the manner in which, or the Person to whom, any interest
on any Bearer Security of the series shall be payable, if otherwise
than upon presentation and surrender of the coupons appertaining
thereto as they severally mature and the extent to which, or the manner
in which, any interest payable on a temporary global Security on any
Interest Payment Date will be paid if other than in the manner provided
in Section 304;
(5) the date or dates on which the principal of (and premium,
if any, on) the Securities of the series is payable or the method of
determination thereof;
(6) the rate or rates, or the method of determination thereof,
at which the Securities of the series shall bear interest, if any,
whether and under what circumstances Additional Amounts with respect to
such Securities shall be payable, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such
interest shall be payable and, if other than as set forth in Section
101, the Regular Record Date for the interest payable on any Registered
Securities on any Interest Payment Date;
(7) the place or places where, subject to the provisions of
Section 1002, the principal of (and premium, if any), any interest on
and any Additional Amounts with respect to the Securities of the
series shall be payable;
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(8) the period or periods within which, the price or prices
(whether denominated in cash, securities or otherwise) at which and the
terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company, if the
Company is to have that option, and the manner in which the Company
must exercise any such option;
(9) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms
and conditions upon which, Securities of the series shall be redeemed
or purchased in whole or in part pursuant to such obligation;
(10) the denomination in which any Registered Securities of
that series shall be issuable, if other than denominations of $1,000
and any integral multiple thereof, and the denomination in which any
Bearer Securities of that series shall be issuable, if other than the
denomination of $5,000;
(11) the currency or currencies (including composite
currencies) in which payment of the principal of (and premium, if any),
any interest on and any Additional Amounts with respect to the
Securities of the series shall be payable if other than the currency of
the United States of America;
(12) if the principal of (and premium, if any) or interest on
the Securities of the series are to be payable, at the election of the
Company or a Holder thereof, in a currency or currencies (including
composite currencies) other than that in which the Securities are
stated to be payable, the currency or currencies (including composite
currencies) in which payment of the principal of (and premium, if any)
and interest on, and any Additional Amounts with respect to, Securities
of such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(13) if the amount of payments of principal of (and premium, if
any), any interest on and any Additional Amounts with respect to the
Securities of the series may be determined with reference to any
commodities, currencies or indices, or values, rates or prices, the
manner in which such amounts shall be determined;
(14) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
(15) any additional means of satisfaction and discharge of this
Indenture with respect to Securities of the series pursuant to Section
401, any additional conditions to discharge pursuant to Section 401 or
403 and the application, if any, of Section 403;
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(16) any deletions or modifications of or additions to the
Events of Default set forth in Section 501 or covenants of the Company
set forth in Article Ten pertaining to the Securities of the series;
and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except in the
case of Registered Securities, as to denomination and except as may otherwise
be provided in or pursuant to the Board Resolution referred to above and
(subject to Section 303) set forth, or determined in the manner provided, in
the Officers' Certificate referred to above or in any such indenture
supplemental hereto.
At the option of the Company, interest on the Registered Securities of
any series that bears interest may be paid by mailing a check to the address of
any Holder as such address shall appear in the Security Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the
series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 301. In the absence of any
such provisions with respect to the Securities of any series, the Registered
Securities of such series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Securities of such series denominated in Dollars shall be issuable in the
denominations of $5,000 and any integral multiple thereof. Unless otherwise
provided as contemplated by Section 301 with respect to any series of
Securities, any Securities of a series denominated in a currency other than
Dollars shall be issuable in denominations that are the equivalent, as
determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for such currency, as such rate is reported or
otherwise made available by the Federal Reserve Bank of New York, on the
applicable issue date for such Securities, of $1,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman or one of its Vice Presidents, under its corporate seal, which may be
in facsimile form, reproduced thereon or affixed thereto and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
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officers on the Securities may be manual or facsimile. Coupons shall bear the
facsimile signature of the Chairman or any Vice President of the Company.
Securities and coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities as in this Indenture
provided and not otherwise; provided, however, that, in connection with its
sale, during the "restricted period" (as defined in Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations), no Bearer
Security shall be mailed or otherwise delivered to any location in the United
States; and provided, further, that a Bearer Security may (other than a
temporary global security in bearer form delivered as provided in Section 304)
be delivered outside the United States in connection with its original issuance
and only if the Person entitled to receive such Bearer Security shall have
furnished a certificate in the form set forth in Exhibit A to this Indenture,
or in such other form of certificate as shall contain information then required
by federal income tax laws and, if applicable, federal securities laws, dated
no earlier than the Certification Date. If any Security shall be represented by
a permanent global Bearer Security, then, for purposes of this Section and
Section 304, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange of a portion of a temporary
global Security shall be deemed to be delivery in connection with sale, during
the "restricted period" (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the
United States Treasury Regulations) of such beneficial owner's interest in such
permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and cancelled.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
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(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms have
been established in conformity with the provisions of this Indenture; and
(c) that such Securities, together with any coupons appertaining
thereto, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, except as such enforcement is
subject to the effect of (i) bankruptcy, insolvency, reorganization or other
laws relating to or affecting creditors' rights and (ii) general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law).
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication; and each Bearer Security shall be dated as of the date of
issuance of the first Bearer Security of such series to be issued.
No Security or coupon or coupons appertaining thereto shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Security, or the Security to which such
coupon appertains, a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309 together with a written statement (which need not
comply with Section 103 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more coupons appertaining thereto or without coupons, and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution
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of such Securities. In the case of any series issuable as Bearer Securities,
such temporary Securities may be in global form. A temporary Bearer Security
shall be delivered only in compliance with the conditions set forth in Section
303.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations. Until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series; provided, however that no Bearer Security shall be issued in
exchange for a temporary Registered Security; and provided, further, that a
definitive Bearer Security (including interests in a permanent Global Security)
shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 303.
Any temporary global Bearer Security and any permanent global Bearer
Security shall, unless otherwise provided therein, be delivered to the London
office of a depositary or common depositary (the "Common Depositary") for the
benefit of Euroclear and CEDEL S.A. for credit to the respective accounts of
the beneficial owners of such Securities (or to such other accounts as they may
direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Bearer Security of a series (the "Exchange Date"), the Company shall deliver to
the Trustee definitive Securities of that series in aggregate principal amount
equal to the principal amount of such temporary global Bearer Security,
executed by the Company. On or after the Exchange Date such temporary global
Bearer Security shall be surrendered by the Common Depositary to the Trustee,
as the Company's agent for such purpose, to be exchanged, in whole or from time
to time in part, for definitive Securities of that series without charge and
the Trustee shall authenticate and deliver, in exchange for each portion of
such temporary global Bearer Security, a like aggregate principal amount of
definitive Securities of the same series of authorized denominations and of
like tenor as the portion of such temporary global Bearer Security to be
exchanged; provided, however, that unless otherwise specified in such temporary
global Bearer Security, no such definitive Securities shall be delivered
unless, upon such presentation by the Common Depositary, such temporary global
Bearer Security is accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of such temporary
global Bearer Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL
S.A. as to the portion of such temporary global Bearer Security held for its
account then to be exchanged, each in the form set forth
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in Exhibit B to this Indenture. The definitive Securities to be delivered in
exchange for any such temporary global Bearer Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 301,
and if any combination thereof is so specified, as requested by the beneficial
owner thereof.
Unless otherwise specified in the temporary global Bearer Security,
the interest of a beneficial owner of Securities of a series in a temporary
global Bearer Security shall be exchanged on or after the Exchange Date for
definitive Securities (and where the form of the definitive Securities is not
specified by the Holder for an interest in a permanent global Security) of the
same series and of like tenor upon delivery by such beneficial owner to
Euroclear or CEDEL S.A., as the case may be, of a certificate in the form set
forth in Exhibit A to this Indenture dated no earlier than the Certification
Date, copies of which certificate shall be available from the offices of
Euroclear and CEDEL S.A., the Trustee, any Authenticating Agent appointed for
such series of Securities and each Paying Agent. Unless otherwise specified in
such temporary global Bearer Security, any exchange shall be made free of
charge to the beneficial owners of such temporary global Bearer Security,
except that a Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like in the event that such Person
does not take delivery of such definitive Securities in person at the offices
of Euroclear or CEDEL S.A. Definitive Securities in bearer form to be delivered
in exchange for any portion of a temporary global Bearer Security shall be
delivered only outside the United States.
All Outstanding temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of the same series and of like tenor authenticated and delivered
hereunder, except that, unless otherwise specified as contemplated by Section
301, interest payable on a temporary global Bearer Security on an Interest
Payment Date for Securities of such series shall be payable to Euroclear and
CEDEL S.A. on such Interest Payment Date upon delivery by Euroclear and CEDEL
S.A. to the Trustee of a certificate or certificates in the form set forth in
Exhibit B to this Indenture, for credit without further interest on or after
such Interest Payment Date to the respective accounts of the Persons who are
the beneficial owners of such temporary global Bearer Security on such Interest
Payment Date and who have each delivered to Euroclear or CEDEL S.A., as the
case may be, a certificate in the form set forth in Exhibit A to this
Indenture. Any interest so received by Euroclear or CEDEL S.A. and not paid as
herein provided shall be returned to the Trustee immediately prior to the
expiration of two years after such Interest Payment Date in order to be repaid
to the Company in accordance with Section 1003.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept for each series of Securities at
one of the offices or agencies maintained pursuant to Section 1002 a register
(the register maintained in such office and in any other office or agency of
the Company in a Place of Payment being herein sometimes collectively referred
to as the "Security Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of
Registered Securities and of
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transfers of Registered Securities of such series. The Trustee is hereby
initially appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency in a Place of Payment for that series,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Registered Securities of the same series and of like tenor, of any authorized
denominations and of a like aggregate principal amount.
At the option of the Holder, Registered Securities of any series may
be exchanged for other Registered Securities of the same series and of like
tenor, of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. A Holder of
Registered Securities cannot have Bearer Securities issued in exchange for such
Registered Securities.
At the option of the Holder of Bearer Securities of any series, such
Bearer Securities may be exchanged for Registered Securities of the same series
of any authorized denominations and of a like aggregate principal amount and
tenor, upon surrender of the Bearer Securities to be exchanged at any such
office or agency, with all unmatured coupons and all matured coupons in default
thereto appertaining. If the Holder of a Bearer Security is unable to produce
any such unmatured coupon or coupons or matured coupon or coupons in default,
such exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there is
furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to any Paying Agent any such missing coupon in respect
of which such a payment shall have been made, such Holder shall be entitled to
receive from the Company the amount of such payment; provided, however, that,
except as otherwise provided in Section 1002, interest represented by coupons
shall be payable only upon presentation and surrender of those coupons at an
office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this
Indenture.
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Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Security are entitled to exchange such interest
for Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301,
then without unnecessary delay but in any event not later than the earliest
date on which such interests may be so exchanged, the Company shall deliver to
the Trustee definitive Securities of that series in an aggregate principal
amount equal to the principal amount of such permanent global Security,
executed by the Company. On or after the earliest date on which such interests
may be so exchanged, such permanent global Security shall be surrendered from
time to time in accordance with instructions given to the Trustee and the
Common Depositary (which instructions shall be in writing but need not comply
with Section 103 or be accompanied by an Opinion of Counsel) by the Common
Depositary or such other depositary or Common Depositary as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or in part, for definitive
Securities of the same series without charge and the Trustee shall authenticate
and deliver, in exchange for each portion of such permanent global Security, a
like aggregate principal amount of other definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
permanent global Security to be exchanged which, unless the Securities of the
series are not issuable both as Bearer Securities and as Registered Securities,
as specified as contemplated by Section 301, shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities of that series is to be redeemed and
ending on the relevant Redemption Date; and provided, further, that no Bearer
Security delivered in exchange for a portion of a permanent global Security
shall be mailed or otherwise delivered to any location in the United States.
Promptly following any such exchange in part, such permanent global Security
shall be returned by the Trustee to the Common Depositary or such other
depositary or Common Depositary referred to above in accordance with the
instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a permanent global Security after the
close of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment, interest or Defaulted Interest, as the case may be, will not
be payable on such Interest Payment Date; or proposed date for payment, as the
case may be, in respect of such Registered Security, but will be payable on
such Interest Payment Date or proposed for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchange pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption and ending at
the close of business on (A) if Securities of the series are issuable only as
Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption, except that if Securities of the series are also issuable as
Registered Securities and there is no publication, the mailing of the relevant
notice of redemption or (ii) to register the transfer of or exchange any
Registered Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part or (iii) to exchange
any Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding, with coupons corresponding to the coupons,
if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon appertaining thereto and (ii) such security or indemnity as
may be required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security or coupon has been acquired by a bona fide purchaser, the Company
shall execute and upon its request the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Security or in exchange for the
Security to which a destroyed, lost or stolen coupon appertains (with all
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appurtenant coupons not destroyed, lost or stolen), a new Security of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security; provided,
however, that the principal of and any premium and interest on Bearer
Securities shall, except as otherwise provided in Section 1002, be payable only
at an office or agency located outside the United States.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee connected therewith).
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupons shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. Interest on any Bearer Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the bearer of the applicable coupon appertaining to such Bearer
Security. Unless otherwise provided with respect to the Securities of any
series, payment of interest may be made at the option of the Company (i) in the
case of Registered Securities, by check mailed or delivered to the address of
any Person entitled thereto as such address shall appear in the Security
Register, or (ii) in the case of Bearer Securities, except as otherwise
provided in Section 1002, upon presentation and surrender of the appropriate
coupon appertaining thereto at an office or agency of the Company in a Place of
Payment located outside the United States or by transfer to an account
maintained by the payee with a bank located outside the United States.
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Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Registered Securities of such series
at his address as it appears in the Security Register, not less than 10
days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a
similar notice to be published at least once in an Authorized
Newspaper, but such publication shall not be a condition precedent to
the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture, upon registration of transfer of, in exchange
for or in lieu of, any other Security, shall
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carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as
the owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307)
interest on such Registered Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Security and the bearer of
any coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Registered Securities and matured coupons so
delivered shall be promptly cancelled by the Trustee. All Bearer Securities
and unmatured coupons so delivered shall be held by the Trustee and, upon
instruction by a Company Order, shall be cancelled or held for reissuance.
Bearer Securities and unmatured coupons held for reissuance may be reissued
only in replacement of mutilated, lost, stolen or destroyed Bearer Securities
of the same series and like tenor or the related coupons pursuant to Section
306. All Bearer Securities and unmatured coupons held by the Trustee pending
such cancellation or reissuance shall be deemed to be delivered to the Trustee
for all purposes of this Indenture and the Securities. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of as directed by a Company Order; provided that the
Trustee shall not be required to destroy such Securities.
In the case of any temporary global Bearer Security, which shall be
disposed of if the entire aggregate principal amount of the Securities
represented thereby has been exchanged, the certificate of disposition shall
state that all certificates required pursuant to Section 304 hereof,
substantially
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in the form of Exhibit B hereto, to be given by Euroclear or CEDEL S.A., have
been duly presented to the Trustee for such Securities by Euroclear or CEDEL
S.A., as the case may be. Permanent global Securities shall not be disposed of
until exchanged in full for definitive Securities or until payment thereon is
made in full.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year of twelve 30-day months.
SECTION 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities of a series, and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to Securities of such series, when
(1) either
(a) all Securities of such series theretofore
authenticated and delivered and all coupons, if any, appertaining
thereto (other than (i) coupons appertaining to Bearer Securities
surrendered for exchange for Registered Securities and maturing after
such exchange, whose surrender is not required or has been waived as
provided in Section 305, (ii) Securities and coupons which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, (iii) coupons appertaining to Bearer
Securities called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons for whose payment money
has theretofore been deposited in trust or segregated and held in
trust by the
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Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(b) with respect to all Outstanding Securities
of such series and any coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation, the Company has deposited
or caused to be deposited with the Trustee as trust funds, under the
terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, for the purpose money or U.S. Government
Obligations maturing as to principal and interest in such amounts and
at such times as will, together with the income to accrue thereon,
without consideration of any reinvestment thereof, be sufficient to
pay and discharge the entire indebtedness on all Outstanding
Securities of such series and coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation for principal
(and premium and Additional Amounts, if any) and interest to the
Stated Maturity or any Redemption Date contemplated by the penultimate
paragraph of this Section, as the case may be; or
(c) the Company has properly fulfilled such
other means of satisfaction and discharge as is specified, as
contemplated by Section 301, to be applicable to the Securities of
such series;
(2) the Company has paid or caused the be paid all other
sums payable hereunder by the Company with respect to the Outstanding
Securities of such series;
(3) the Company has complied with any other conditions
specified pursuant to Section 301 to be applicable to the discharge of
Securities of such series pursuant to this Section 401;
(4) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture with respect to the Outstanding
Securities of such series have been complied with;
(5) if the conditions set forth in Section 401(1)(a)
have not been satisfied, and unless otherwise specified pursuant to
Section 301 for the Securities of such series, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of Securities of such series will not recognize income, gain
or loss for United States federal income tax purposes as a result of
such deposit, satisfaction and discharge and will be subject to United
States federal income tax on the same amount and in the same manner
and at the same time as would have been the case if such deposit,
satisfaction and discharge had not occurred; and
(6) no Default or Event of Default with respect to the
Securities of such issue shall have occurred and be continuing on the
date of such deposit or, in so far as clause (5) or (6) of Section 501
is concerned, at any time in the period ending on the 91st day after
the
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date of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period).
For the purposes of this Indenture, "U.S. Government Obligations"
means direct non-callable obligations of, or non-callable obligations the
payment of principal of and interest on which is guaranteed by, the United
States of America, or to the payment of which obligations or guarantees the
full faith and credit of the United States of America is pledged, or beneficial
interests in a trust the corpus of which consists exclusively of money or such
obligations or a combination thereof.
If any Outstanding Securities of such series are to be redeemed prior
to their Stated Maturity, whether pursuant to any optional redemption
provisions or in accordance with any mandatory sinking fund requirement, the
trust agreement referred to in subclause (b) of clause (1) of this Section
shall provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to the Outstanding Securities of such series pursuant to this Section
401, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and,
except for a discharge pursuant to subclause (A) of clause (1) of this Section,
the obligations of the Company under Sections 305, 306, 404, 610(e), 701, 1001
and 1002 and the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest and Additional Amounts for the payment of which
such money has been deposited with the Trustee.
SECTION 403. Discharge of Liability on Securities of Any Series.
If this Section is specified, as contemplated by Section 301, to be
applicable to Securities of any series, the Company shall be deemed to have
paid and discharged the entire indebtedness on all the Outstanding Securities
of such series, the obligation of the Company under this Indenture and the
Securities of such series to pay the principal of (and premium, if any) and
interest on Securities of such series, and any coupon appertaining thereto,
shall cease, terminate and be completely discharged and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging such
satisfaction and discharge, when
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(1) the Company has complied with the provisions of
Section 401 of this Indenture (other than any additional conditions
specified pursuant to Sections 301 and 401(3) and except that the
opinion referred to in Section 401(5) shall state that it is based on
a ruling by the Internal Revenue Service or other change since the
date hereof under applicable Federal income tax law) with respect to
all Outstanding Securities of such series,
(2) the Company has delivered to the Trustee a Company
Request requesting such satisfaction and discharge,
(3) the Company has complied with any other conditions
specified pursuant to Section 301 to be applicable to the discharge of
Securities of such series pursuant to this Section 403, and
(4) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the discharge of
the indebtedness on the Outstanding Securities of such series have
been complied with.
Upon the satisfaction of the conditions set forth in this Section with
respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided that, the Company shall not be discharged
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law or pursuant to Section 305 or 306.
SECTION 404. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations deposited with respect to Securities of any series in
accordance with Section 401 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture with respect to the Securities of such series
and the Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 401 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 401; provided, however, that if the
Company has made any payment of principal of (or premium, if any), or interest
on and any Additional Amounts with respect to any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body), unless it is either inapplicable to a particular series or
it is specifically deleted or modified in or pursuant to the supplemental
indenture or Board Resolution establishing such series of Securities, or in the
form of Security for such series:
(1) default in the payment of any interest or any
Additional Amounts upon any Security of that series when such interest
or Additional Amounts become due and payable, and continuance of such
default for a period of 30 days (whether or not such payment shall be
prohibited by the provisions of Article Thirteen); or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series at its Maturity
(whether or not such payment shall be prohibited by the provisions of
Article Thirteen); or
(3) default in the deposit of any sinking fund payment,
when and as due by the terms of a Security of that series (whether or
not such payment shall be prohibited by the provisions of Article
Thirteen); or
(4) default in the performance or breach of any covenant
or warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of one or more
series of Securities other than that series), and continuance of such
default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in
principal amount of all Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
in an involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law or
(B) a decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in
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respect of the Company under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it, of a
petition or answer or consent seeking reorganization or relief under
any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(7) any default shall occur which results in the
acceleration of the maturity of any Indebtedness of the Company (other
than the Securities or any Non-Recourse Indebtedness) having an
outstanding principal amount of $20 million or more individually or,
taken together with all other such Indebtedness that has been so
accelerated, in the aggregate and such default shall be continuing for
a period of 30 days without the Company or such Restricted Subsidiary,
as the case may be, effecting a cure of such default.
Notwithstanding the foregoing provisions of this Section 501, if the
principal of (and premium, if any) or any interest on, or Additional Amounts
with respect to, any Security is payable in a currency or currencies (including
a composite currency) other than Dollars and such currency (or currencies) is
(or are) not available to the Company for making payment thereof due to the
imposition of exchange controls or other circumstances beyond the control of
the Company (a "Conversion Event"), the Company will be entitled to satisfy its
obligations to Holders of the Securities by making such payment in Dollars in
an amount equal to the Dollar equivalent of the amount payable in such other
currency, as determined by the Company by reference to the noon buying rate in
The City of New York for cable transfers for such currency ("Exchange Rate"),
as such Exchange Rate is certified for customs purposes by the Federal Reserve
Bank of New York on the date of such payment, or, if such rate is not then
available, on the basis of the most recently available Exchange Rate.
Notwithstanding the foregoing provisions of this Section 501, any payment made
under such circumstances in Dollars where the required payment is in a currency
other than Dollars will not constitute an Event of Default under this
Indenture.
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Promptly after the occurrence of a Conversion Event, the Company shall
give written notice thereof to the Trustee; and the Trustee, promptly after
receipt of such notice, shall give notice thereof in the manner provided in
Section 106 to the Holders. Promptly after the making of any payment in Dollars
as a result of a Conversion Event, the Company shall give notice in the manner
provided in Section 106 to the Holders, setting forth the applicable Exchange
Rate and describing the calculation of such payments.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to any Securities of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of (i) the series affected by such default (in the case
of an Event of Default described in clause (1), (2), (3) or (7) of Section 501)
or (ii) all series of Securities (subject to the immediately following
sentence, in the case of other Events of Default) may declare the principal
amount (or, if any such Securities are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that
series) of all of the Securities of the series affected by such default or all
series, as the case may be, to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default described in clause (5) or
(6) of Section 501 shall occur, the principal amount of the Outstanding
Securities of all series ipso facto shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
At any time after such a declaration of acceleration with respect to
Securities of any series (or of all series, as the case may be) has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities of that series (or
of all series, as the case may be), by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(a) all overdue interest on, and any Additional
Amounts with respect to, all Securities of that series (or of
all series, as the case may be) and any coupons appertaining
thereto,
(b) the principal of (and premium, if any, on)
any Securities of that series (or of all series, as the case
may be) which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities (in the case
of Original Issue Discount Securities, the Securities' Yield
to Maturity),
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(c) to the extent that payment of such interest
is lawful, interest upon overdue interest and any Additional
Amounts at the rate or rates prescribed therefor in such
Securities (in the case of Original Issue Discount
Securities, the Securities' Yield to Maturity), and
(d) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default with respect to Securities of
that series (or of all series, as the case may be), other than the
non-payment of the principal of Securities of that series (or of all
series, as the case may be) which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of
interest on, or any Additional Amounts with respect to, any Security
of any series and any coupons appertaining thereto when such interest
or Additional Amounts shall have become due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the principal of
(or premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and coupons, the whole amount then due and payable
on such Securities and coupons for principal (and premium, if any) and interest
and Additional Amounts and, to the extent that payment of such interest shall
be legally enforceable, interest on any overdue principal (and premium, if any)
and on any overdue interest and Additional Amounts, at the rate or rates
prescribed therefor in such Securities (or in the case of Original Issue
Discount Securities, the Securities' Yield to Maturity), and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may
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enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal (or lesser amount
in the case of Original Issue Discount Securities) of the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal (premium, if any), interest or Additional
Amounts) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal (or lesser amount in the case of Original Issue Discount
Securities) (and premium, if any) and interest and any Additional
Amounts owing and unpaid in respect of the Securities or any coupons
appertaining thereto and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any monies, or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment
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or composition affecting the Securities or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceedings; provided, however, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar official.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons.
All rights of action and claim under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without possession of
any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any), interest or any Additional Amounts, upon presentation of the
Securities, or coupons, or both as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest and any Additional
Amounts on the Securities and coupons in respect of which or for the
benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities; and coupons for principal (and premium, if
any), interest and Additional Amounts, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) an Event of Default with respect to Securities of
such series shall have occurred and be continuing and such Holder has
previously given written notice to the Trustee of such continuing
Event of Default;
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(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on and any Additional Amounts with respect to
such Security or payment of such coupon on the Stated Maturity or Maturities
expressed in such Security or coupon (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding has been instituted.
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SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
or coupons to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 512. Control by Holders.
With respect to Securities of any series, the holders of a majority in
principal amount of the Outstanding Securities of such series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, relating to or arising under an Event of Default described in
clause (1), (2), (3) or (7) of Section 501, and with respect to all Securities
the Holders of a majority in principal amount of all Outstanding Securities
shall have the right to direct the time, method and place of conducting any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, not relating to or arising under such an Event of Default,
provided that in each such case
(1) such direction shall not be in conflict with any
rule of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all the Securities of
such series waive any past default hereunder with respect to such series and
its consequences, and the Holders of a majority in principal amount
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of all Outstanding Securities may on behalf of the Holders of all Securities
waive any other past default hereunder and its consequences, except in each case
a default
(1) in the payment of the principal of (or premium, if
any) or interest on, or any Additional Amounts with respect to, any
Security, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
or coupon by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on, or any Additional Amounts
with respect to, any Security or the payment of any coupon on or after the
Stated Maturity or Maturities expressed in such Security or coupon (or, in the
case of redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default
with respect to the Securities of any series,
(1) the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing with respect to the Securities of any series, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except
that
(1) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a
majority in principal amount of the Outstanding Securities of
any series or of all series, determined as provided in
Section 512, relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or
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exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such
series; and
(4) no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights
or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject
to the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall give notice of such
default hereunder known to the Trustee to all Holders of Securities of such
series in the manner provided in Section 106, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or interest on, or any
Additional Amounts with respect to, any Security of such series or in the
payment of any sinking fund installment with respect to Securities of such
series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders of Securities
of such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such
series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other
evidence of indebtedness or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and,
subject to Sections 608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
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SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
completion shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the reasonable expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of, premium, if any, or interest, if
any, on, or any Additional Amounts with respect to, particular Securities.
Any expenses and compensation for any services rendered by the Trustee
after the occurrence of an Event of Default specified in clause (5) or (6) of
Section 501 shall constitute expenses and compensation for services of
administration under all applicable federal or state bankruptcy, insolvency,
reorganization or other similar laws.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest,
as defined in this Section, with respect to the Securities of any series, it
shall, within 90 days after ascertaining that it has such
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conflicting interest, either eliminate such conflicting interest or resign with
respect to the Securities of that series in the manner and with the effect
hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit by mail to all Holders of Securities of that series, as
their names and addresses appear in the Security Register, notice of such
failure.
(c) For the purposes of this Section, the term "conflicting
interest" shall have the meaning specified in Section 310(b) of the Trust
Indenture Act and the Trustee shall comply with Section 310(b) of the Trust
Indenture Act; provided, that there shall be excluded from the operation of
Section 310(b)(1) of the Trust Indenture Act with respect to the Securities of
any series the Indenture dated as of March 15, 1995 between the Company and the
Trustee relating to the Company's senior debt securities, this Indenture with
respect to the Securities of any series other than that series and any other
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding,
if the requirements for such exclusion set forth in Section 310(b)(1) of the
Trust Indenture Act are met. For purposes of the preceding sentence, the
optional provision permitted by the second sentence of Section 310(b)(9) of the
Trust Indenture Act shall be applicable.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the resigning Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any
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court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a)
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder of Securities, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and such successor
Trustee or Trustees shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide
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Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid,
to all Holders of Securities of such series as their names and addresses appear
in the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Services Division.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor.
Trustee all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring
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Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent indicated
therein.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or partial
redemption or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Wherever
reference is made in this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of
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the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, or in the case of an Authenticating Agent with
respect to Securities issuable as Bearer Securities, under the laws of any
country in which such Bearer Securities may be offered, authorized under such
laws to act as Authenticating Agent, having a combined capital and surplus of
not less than $50,000,000 or equivalent amount expressed in a foreign currency
and subject to supervision or examination by federal or state authority or
authority of such country. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
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"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
AS TRUSTEE
By ______________________________
as Authenticating Agent
By ______________________________
Authorized Signatory"
Notwithstanding any provision of this Section 614 to the contrary, if
at any time any Authenticating Agent appointed hereunder with respect to any
series of Securities shall not also be acting as the Security Registrar
hereunder with respect to any series of Securities, then, in addition to all
other duties of an Authenticating Agent hereunder, such Authenticating Agent
shall also be obligated: (i) to furnish to the Security Registrar promptly all
information necessary to enable the Security Registrar to maintain at all times
an accurate and current Security Register; and (ii) prior to authenticating any
Security denominated in a foreign currency, to ascertain from the Company the
units of such foreign currency that are required to be determined by the
Company pursuant to Section 302.
ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
With respect to each series of Securities, the Company will furnish or
cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after each Regular
Record Date relating to that series (or, if there is no Regular Record Date
relating to that series, on January 1 and July 1), a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
that series as of such dates, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content, such list to be dated
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as of a date not more than 15 days prior to the time such list is furnished;
provided, that so long as the Trustee is the Security Registrar, the Company
shall not be required to furnish or cause to be furnished such a list to the
Trustee.
SECTION 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of each series
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of each series received by
the Trustee in its capacity as Security Registrar. The Trustee may destroy any
list furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) Holders of Securities may communicate pursuant to the Trust
Indenture Act with other Holders with respect to their rights under this
Indenture or under the Securities.
(c) Every Holder of Securities or coupons, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 702(b), regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after January 31 of each year commencing with
the year 1996, the Trustee shall transmit by mail to Holders a brief report
dated as of such reporting date that complies with Section 313(a) of the Trust
Indenture Act.
(b) The Trustee shall comply with Section 313 (b) of the Trust
Indenture Act.
(c) Reports pursuant to this Section shall be transmitted by
mail:
(1) to all Holders of Registered Securities, as the
names and addresses of such Holders appear in the Security Register;
(2) to such Holders of Securities as have, within the
two years preceding such transmissions, filed their names and
addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to
Subsection (b) of this Section, to each Holder of a Security whose
name and address is preserved at the time by the Trustee, as provided
in Section 702(a).
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(d) A copy of each report pursuant to Subsection (a) or (b) of
this Section 703 shall, at the time of its transmission to Holders, be filed by
the Trustee with each stock exchange upon which any Securities are listed, with
the Commission and with the Company. The Company will notify the Trustee when
any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, and shall otherwise comply with Section
314(a) of the Trust Indenture Act.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or
trust, shall be organized and existing under the laws of the United
States or any state thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if any) and
interest (including all Additional Amounts, if any) on all the
Securities and the performance of every covenant of this Indenture on
the part of the Company to be performed or observed;
(2) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
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SECTION 802. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of such lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities and coupons.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities and any
coupons appertaining thereto (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series), to convey, transfer, assign, mortgage or pledge any property
to or with the Trustee or otherwise secure any series of the
Securities or to surrender any right or power herein conferred upon
the Company; or
(3) to add any additional Events of Default with
respect to all or any series of the Securities (and, if such Event of
Default is applicable to less than all series of Securities,
specifying the series to which such Event of Default is applicable);
or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium or interest on Bearer Securities, to
permit Bearer Securities to be issued in exchange for Registered
Securities, to permit Bearer Securities to be issued in exchange for
Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided
that any
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such action shall not adversely affect the interests of the
Holders of Securities of any series or any related coupons in any
material respect; or
(5) to change or eliminate any of the provisions of
this Indenture, provided that any such change or elimination shall
become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture
which is adversely affected by such change in or elimination of such
provision; or
(6) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301 and to provide for
uncertificated Securities in addition to or in place of certificated
Securities, or to provide for certificated Securities in addition to
or in place of uncertificated Securities; or
(7) to supplement any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the defeasance and discharge of any series of Securities pursuant to
Section 401; provided, however, that any such action shall not
adversely affect the interest of the Holders of Securities of such
series or any other series of Securities in any material respect; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided such other
provisions as may be made shall not adversely affect the interests of
the Holders of Securities of any series or any related coupons in any
material respect; or
(10) to comply with any requirement in order to effect
or maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of a majority in principal amount of
the Outstanding Securities of all series affected by such supplemental
indenture (acting as one class), by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Securities of such series
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and any related coupons under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the rate of interest thereon,
any Additional Amounts with respect thereto or any premium payable
upon the redemption thereof, or change any obligation of the Company
to pay Additional Amounts (except as contemplated by Section 801(1)
and permitted by Section 901(1)), or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency or currencies (including composite currencies) in
which, any Security or any premium or any interest thereon or
Additional Amounts with respect thereto is payable, or impair the
right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date), or
(2) reduce the percentage in principal amount of
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section,
Section 513 or Section 1008, except to increase any such percentage or
to provide with respect to any particular series the right to
condition the effectiveness of any supplemental indenture as to that
series on the consent of the Holders of a specified percentage of the
aggregate principal amount of Outstanding Securities of such series
(which provision may be made pursuant to Section 301 without the
consent of any Holder) or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby, provided,
however, that this clause shall not be deemed to require the comment
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1008, or
the deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(7).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series and any coupons appertaining
thereto so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series and any coupons appertaining thereto.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any), interest on and any Additional Amounts with respect to the Securities
of that series in accordance with the terms of the Securities, any coupons
appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 301 with respect to any series of Securities, on any
interest due on and Additional
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Amounts payable with respect to Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments, as are evidenced thereby as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities,
the Company will maintain in each Place of Payment for any series of Securities
an office or agency where Securities of that series may be presented or
surrendered for payment, where Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. Unless otherwise designated by the Company by written notice to the
Trustee, such office or agency shall be the principal office of The First
National Bank of Chicago, in The City of New York, which, on the date hereof,
is located at 14 Wall Street, 8th Floor, New York, New York 10005. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain (A) in The Borough of Manhattan, The City of New York, an office or
agency where any Registered Securities of that series may be presented or
surrendered for payment, where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may
be surrendered for exchange for Registered Securities, where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served and where Bearer Securities of that series and
related coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise), (B)
subject to any laws or regulations applicable thereto, in a Place of Payment
for that series which is located outside the United States, an office or agency
where Bearer Securities of that series and related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts with
respect to Bearer Securities of that series); provided however, that if the
Securities of that series are listed on the International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited, the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company will maintain a Paying Agent for
the Securities of that series in London, Luxembourg or any other required city
located outside the United States, as the case may be, so long as the
Securities of that series are listed on such exchange, and (C) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
located outside the United States an office or agency where any Registered
Securities of that series may be surrendered for registration of transfer,
where Securities of that series may be surrendered for exchange and where
notices and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Services Division of the Trustee, except that
Bearer Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts with
respect to Bearer Securities of that series) at the office of any Paying
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Agent for such series located outside the United States, and the Company hereby
appoints the Trustee as its office or agency to receive such presentations,
surrenders, notices and demands.
No payment of principal, premium or interest on, or Additional Amounts
with respect to, Bearer Securities shall be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the
United States, nor shall any payments be made in respect of Bearer Securities
or coupons appertaining thereto pursuant to the presentation to the Company or
its designated Paying Agents within the United States; provided, however, that,
if the Securities of a series are denominated and payable in Dollars, payment
of principal of and any premium and interest on any Bearer Security (including
any Additional Amounts payable on Securities of such series) shall be made at
the office of the Company's Paying Agent in The Borough of Manhattan, The City
of New York, if (but only if) payment in Dollars of the full amount of such
principal, premium, interest or Additional Amounts, as the case may be, at all
offices or agencies outside the United States maintained for the purpose by the
Company in accordance with this Indenture is illegal or effectively precluded
by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency. The Company hereby designates the Corporate Trust
Services Division of the Trustee as one such office or agency of the Company in
accordance with Section 305.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities and any coupons appertaining thereto, it
will, on or before each due date of the principal of (and premium, if any) or
interest on or any Additional Amounts with respect to any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons appertaining thereto, the Company
will, on or before each due date of the principal of (and premium, if any) or
interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest,
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and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of (and premium, if any), interest on or any Additional
Amounts with respect to Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities of that series) in
the making of any payment of principal (and premium, if any), interest
on or any Additional Amounts with respect to the Securities of that
series; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which sums were held by the Company
or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for
three years after such principal (and premium, if any) or interest has become
due and payable shall, unless otherwise required by mandatory provisions of
applicable escheat, or abandoned or unclaimed property law, be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security and coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in an Authorized
Newspaper in The Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified herein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will, unless otherwise
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required by mandatory provisions of applicable escheat, or abandoned or
unclaimed property law, be repaid to the Company.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 1005. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent that Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, and
(2) all material lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
SECTION 1007. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof so long as any
Security is outstanding hereunder, an Officers' Certificate, stating that a
review of the activities of the Company during such year and of performance
under this Indenture has been made under the supervision of the signers thereof
and whether or not to the best of their knowledge, based upon such review, the
Company is in default in the performance, observance or fulfillment of any of
its covenants and other obligations under this Indenture, and if the Company
shall be in default, specifying each such default known to them and the nature
and status thereof. One of the officers signing the Officers' Certificate
delivered pursuant to this Section 1007 shall be the principal executive,
financial or accounting officer of the Company.
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For purposes of this Section, such compliance shall be determined
without regard to any period of grace or requirement of notice provided under
this Indenture.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1004 to 1006, inclusive, or any
covenant added for the benefit of any series of Securities as contemplated by
Section 301 (unless otherwise specified pursuant to Section 301) if before or
after the time for such compliance the Holders of a majority in principal
amount of the Outstanding Securities of all series affected by such omission
(acting as one class) shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant, or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the duties of the
Trustee in respect of any such covenant or condition shall remain in full force
and effect.
SECTION 1009. Additional Amounts.
If the Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto Additional Amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Security
of any series or payment of any related coupon or the net proceeds received on
the sale or exchange of any Security of any series, such mention shall be
deemed to include mention of the payment of Additional Amounts provided for in
this Section to the extent that, in such context, Additional Amounts are, were
or would be payable in respect thereof pursuant to the provisions of this
Section and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company shall furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be
withheld on such payments to such Holders of securities
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or coupons and the Company will pay to such Paying Agent the Additional Amounts
required by this Section. The Company covenants to indemnify the Trustee and
any Paying Agent for, and to hold them harmless against any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such series
to be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, pro rata or by lot or by such
other method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series
or of the principal amount of global Securities of such series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
107 to each Holder of Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, including each component
thereof,
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price
will become due and payable upon each such Security to be redeemed
and, if applicable, that interest thereon will cease to accrue on and
after said date,
(5) the place or places where such Securities, together
in the case of Bearer Securities with all coupons appertaining
thereto, are to be surrendered for payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such
is the case,
(7) that, unless otherwise specified in such notice,
Bearer Securities of any series, if any, surrendered for redemption
must be accompanied by all coupons appertaining thereto maturing
subsequent to the date fixed for redemption or the amount of any such
missing coupon or coupons will be deducted from the Redemption Price
or security or indemnity satisfactory to the Company, the Trustee and
any Paying Agent is furnished,
(8) if Bearer Securities of any series are to be
redeemed and any Registered Securities of such series are not to be
redeemed, and if such Bearer Securities may be exchanged for
Registered Securities not subject to redemption on such Redemption
Date pursuant to Section 305 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
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(9) the aggregate principal amount of Securities being
redeemed, and
(10) the "CUSIP" number of the Securities, if applicable.
A notice of redemption as contemplated by Section 107 need not
identify particular Registered Securities to be redeemed. Notice of redemption
of Securities to be redeemed at the election of the Company shall be given by
the Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or before any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, and any Additional
Amounts with respect to, all the Securities which are to be redeemed on that
date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be redeemed. Upon surrender of any such Security
for redemption in accordance with said notice, together with all coupons
appertaining thereto, if any, appertaining thereto maturing after the
Redemption Date, such Security shall be paid by the Company at the Redemption
Price, together with accrued interest (and any Additional Amounts) to the
Redemption Date; provided, however, that all payments on Bearer Securities
shall be made only in the manner provided in Section 1002 for payments on
Bearer Securities; and provided further, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons appertaining thereto maturing after the
Redemption Date, such Security may be paid after deducting from the Redemption
Price an amount equal to the face amount of all such missing coupons
appertaining thereto, or the surrender of such missing coupon or coupons
appertaining thereto may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest (and
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any Additional Amounts with respect thereto) represented by coupons appertaining
thereto shall be payable only at an office or agency located outside the United
States (except as otherwise provided in Section 1002) and, unless otherwise
specified as contemplated by Section 301, only upon presentation and surrender
of those coupons appertaining thereto.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security or, in the case of Original Issue Discount Securities,
the Securities' Yield to Maturity.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series and Stated Maturity, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
SECTION 1108. Purchase of Securities.
Unless otherwise specified as contemplated by Section 301, the Company
and any Affiliate of the Company may at any time purchase or otherwise acquire
Securities or coupons appertaining thereto in the open market or by private
agreement; provided that purchases or other acquisitions of Bearer Securities
or coupons appertaining thereto by the Company or any Affiliate of the Company
may be made only outside the United States, and payments therefor may be made
only upon surrender of such Bearer Securities or coupons appertaining thereto
at a location outside the United States and only in the manner provided for
payments on Bearer Securities in Section 1002. Such acquisition shall not
operate as or be deemed for any purpose to be a redemption of the indebtedness
represented by such Securities or coupons appertaining thereto. Any Securities
or coupons appertaining thereto purchased or acquired by the Company may be
delivered to the Trustee and, upon such delivery, the indebtedness represented
thereby shall be deemed to be satisfied. Section 309 shall apply to all
Securities and coupons so delivered.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed
either at the election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of all or any
part of any sinking fund payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivery of or by crediting Securities of that
series pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in
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Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 1301. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security or
coupon, by his acceptance thereof, whether upon original issue or upon transfer
or assignment, likewise covenants and agrees, that, to the extent and in the
manner hereinafter set forth, the payment of the principal of (and premium, if
any) and interest on each and all of the Securities and the payment of any
coupon is hereby expressly made subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1302. Circumstances Requiring Prior Payment of Senior
Indebtedness.
In the event of any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, then the
holders of Senior Indebtedness shall be entitled to receive payment in full of
all amounts due or to become due on or in respect of all Senior Indebtedness
before the Holders of the Securities or coupons appertaining thereto are
entitled to receive any payment on account of principal of (or premium, if any)
or interest on the Securities or the payment of the coupons appertaining
thereto.
Unless otherwise provided in Section 301, no payment in respect of
Securities shall be made if, at the time of such payment, there exists a
default in payment of all or any portion of any Senior Indebtedness, and such
default shall not have been cured or waived in writing or the benefits of this
sentence waived in writing by or on behalf of the holders of such Senior
Indebtedness. In addition, unless otherwise provided in Section 301, during the
continuance of any event of default (other than a default referred to in the
immediately preceding sentence) with respect to any Senior Indebtedness
permitting the holders to accelerate the maturity thereof and upon written
notice thereof given to the Trustee, with a copy to the Company (the delivery
of which shall not affect the validity of the notice to the Trustee), by any
holder of such Senior Indebtedness or its representative, then, unless and
until such an event of default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Company with respect to the
principal of or interest on the Securities or to acquire any of the Securities
or on account of the redemption provisions for the Securities; provided,
however, that if the holders of the Senior Indebtedness to which the default
relates have not declared
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such Senior Indebtedness to be immediately due and payable and within 180 days
after the occurrence of such default (or have declared such Senior Indebtedness
to be immediately due and payable and within such period have rescinded such
declaration of acceleration), then the Company shall resume making any and all
required payments in respect of the Securities (including any missed payments).
Only one payment blockage period under the immediately preceding sentence may be
commenced within any consecutive 365-day period with respect to the Securities.
No event of default which existed or was continuing on the date of the
commencement of any 180-day payment blockage period with respect to the Senior
Indebtedness initiating such payment blockage period shall be, or be made, the
basis for the commencement of a second payment blockage period by a Holder or
representative of such Senior Indebtedness whether or not within a period of 365
consecutive days unless such event of default shall have been cured or waived
for a period of not less than 90 consecutive days (and, in the case of any such
waiver, no payment shall be made by the Company to the holders of Senior
Indebtedness in connection with such waiver other than amounts due pursuant to
the terms of the Senior Indebtedness as in effect at the time of such default).
In the event that, notwithstanding the foregoing, the Trustee or the
Holder of any Security shall have received any payment or distribution of any
kind or character, whether in cash, property or securities, before all Senior
Indebtedness is paid in full or payment thereof provided for, and if such fact
shall then have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, agent or other Person making payment or distribution of
assets or securities of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
In addition, nothing in this Section shall prevent the Company from
making or the Trustee from receiving or applying any payment in connection with
the redemption of Securities if the first publication of notice of such
redemption (whether by mail or otherwise in accordance with this Indenture) has
been made, and the Trustee has received such payment from the Company, prior to
the occurrence of any of the contingencies specified in the first two
paragraphs of this Section.
SECTION 1303. Subrogation of Rights to Holders of Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities or coupons appertaining thereto shall be subrogated (to the
extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article) to the rights of the
holders of such Senior Indebtedness to receive payments or distributions from
the Company applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities, or the coupons appertaining
thereto, shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness to which the Holders
of the Securities or coupons appertaining thereto or the Trustee would be
entitled except for the provisions of this Article, and no payments pursuant to
the provisions of this Article to the holders of Senior Indebtedness by Holders
of the Securities or coupons appertaining thereto or the
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Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness, and the Holders of the Securities or coupons appertaining
thereto, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION 1304. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities or
coupons appertaining thereto, on the one hand, and the holders of Senior
Indebtedness, on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities or coupons appertaining thereto is
intended to or shall impair, as between the Company and the Holders of the
Securities or coupons appertaining thereto, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Securities or
coupons appertaining thereto the principal of (and premium, if any) and
interest on the Securities or coupons appertaining thereto as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights against the Company of the Holders of the
Securities or coupons appertaining thereto and creditors of the Company other
than the holders of Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the Holder of any Security or coupon from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness to receive cash, property or securities of the Company
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1305. Trustee to Effectuate Subordination.
Each Holder of a Security or coupon by his acceptance thereof, whether
upon original issue or upon transfer or assignment, authorizes, and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes.
SECTION 1306. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Holders of the Securities, without
incurring responsibility to the Holders of the Securities or coupons
appertaining thereto and without impairing or releasing the subordination
provided in this Article or the obligations of the Holders of the Securities or
coupons appertaining thereto to the holders of Senior Indebtedness, do any one
or more of the following: (i) change the manner, place or terms of
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payment of, or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 1307. Notice to Trustee.
The Company shall give prompt written notice to the Trustee in the
form of an Officers' Certificate of any fact known to the Company which would
prohibit the making of any payment of money to or by the Trustee in respect of
the Securities or coupons appertaining thereto pursuant to the provisions of
this Article. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities or coupons appertaining thereto
pursuant to the provisions of this Article, unless and until the Trustee shall
have received at its Corporate Trust Office written notice thereof from the
Company or a holder or holders of Senior Indebtedness or from any trustee
therefor at least two Business Days prior to such payment date; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 601, shall be entitled in all respects to assume that no such facts
exist.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder. In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 1308. Reliance on Certificate of Liquidating Agent.
Upon any payment or distribution referred to in this Article, the
Trustee, subject to the provisions of Section 601, and the Holders of the
Securities or coupons appertaining thereto shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which a
dissolution, winding up or total or partial liquidation or reorganization of
the Company is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders of the Securities or coupons appertaining
thereto, for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior
75
<PAGE> 85
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 1309. Trustee Not Fiduciary for Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall in good faith mistakenly pay over or distribute to Holders of the
Securities or coupons appertaining thereto or to the Company or to any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.
SECTION 1310. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
SECTION 1311. Article Applicable to Paying Agent.
In case at any time any Payment Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Payment
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that this Section shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any or all series may be called
at any time and from time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or taken by Holders
of Securities of such series.
76
<PAGE> 86
SECTION 1402. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1301, to be held
at such time and at such place in Houston, Texas, in The Borough of Manhattan,
The City of New York, in London or in any other location, as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 107, not less than 20 nor more than 180 days prior to the
date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in aggregate principal amount of the
Outstanding Securities of any series, shall have requested the Trustee for any
such series to call a meeting of the Holders of Securities of such series for
any purpose specified in Section 1301, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 30 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the
Holders of Securities of such series in the amount above specified, as the case
may be, may determine the time and the place in Houston, Texas, in The Borough
of Manhattan, The City of New York, or in London, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
Subsection (a) of this Section.
SECTION 1403. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by
such Holder or Holders. The only Persons who shall be entitled to be present
or to speak at any meeting of Holders of Securities of any series shall be the
Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 1404. Quorum Action.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Subject to Section 1305(d), notice of
the reconvening of any adjourned meeting
77
<PAGE> 87
shall be given as provided in Section 1302(a), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly that Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in aggregate principal amount of the Outstanding Securities of
that series; provided, however, that, except as limited by the proviso to
Section 902, any resolution with respect to any request, demand, authorization,
direction, notice, consent or waiver which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage that is
less than a majority in aggregate principal amount of the Outstanding
Securities of a series may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative
vote of the Holders of such specified percentage in aggregate principal amount
of the Outstanding Securities of that series.
Except as limited by the proviso to Section 902, any resolution passed
or decision taken at any meeting of Holders of Securities of any series duly
held in accordance with this Section shall be binding on all the Holders of
Securities of such series and the coupons appertaining thereto, whether or not
present or represented at the meeting.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) The holding of Securities shall be proved in the manner
specified in Section 105 and the appointment of any proxy shall be proved in
the manner specified in Section 105 or by having the signature of the person
executing the proxy witnessed or guaranteed by any trust company, bank or
banker authorized by Section 105 to certify to the holding of Bearer
Securities. Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine without the
proof specified in Section 105 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1302(b), in
which case the Company or the Holders of Securities of the series calling the
meeting, as the case may be, shall appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series and
each proxy shall be entitled to one vote for each $1,000 principal amount of
the Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
78
<PAGE> 88
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or as a proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1302 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of such series represented at the meeting;
and the meeting may be held as so adjourned without further notice.
SECTION 1406. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to such record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that such notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
* * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE> 89
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By: /s/ LARRY D. KALMBACH
---------------------------------
Name: Larry D. Kalmbach
Title: Vice President and Chief
Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By: /s/ STEVEN M. WAGNER
---------------------------------
Name: Steven M. Wagner
Title: Vice President
80
<PAGE> 90
EXHIBIT A
FORM OF CERTIFICATE TO BE
GIVEN BY OWNER OF SECURITY OR BENEFICIAL OWNER OF
INTEREST IN A GLOBAL SECURITY
UNION TEXAS PETROLEUM HOLDINGS, INC.
[TITLE OF SECURITIES]
(THE "SECURITIES")
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities that are held by the undersigned or held
by you for the account of the undersigned (i) are owned by person(s) that are
not citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States Federal income taxation regardless of its source ("United States
persons"), (ii) are owned by United States person(s) that (A) are foreign
branches of United States financial institutions (as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing
for their own account or for resale, or (B) acquired Securities through foreign
branches of United States financial institutions and who hold the Securities
through such United States financial institutions on the date hereof (and in
either case (A) or (B), each such United States financial institution hereby
certifies, on its own behalf or through its agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
of 1986 as amended, and the regulations thereunder), or (iii) are owned by
United States or foreign financial institution(s) for purposes of resale during
the restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)) and in addition if the owner of the Securities is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)) this is to further
certify that such financial institution has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
If the Securities are of the category contemplated in Section
230.903(c)(3) of Regulation S under the Securities Act of 1933, as amended (the
"Act"), then this is also to certify that, except as set forth below, (i) in
the case of debt securities, the Securities are beneficially owned by (a)
non-U.S. person(s) or (b) U.S. person(s) who purchased the Securities in
transactions which did not require registration under the Act; or (ii) in the
case of equity securities, the Securities are owned by (x) non-U.S. person(s)
(and such person(s) are not acquiring the Securities for the account or benefit
of U.S. person(s)) or (y) U.S. person(s) who purchased the Securities in a
transaction which did not require registration under the Act. If this
certification is being delivered in connection with the exercise of warrants
pursuant to Section 230.902(m) of Regulation S under the Act, then this is
further to certify that, except as set forth below, the Securities are being
exercised by and on behalf of non-U.S. person(s). As used in this paragraph
the term "U.S. person" has the meaning given to it by Regulation S under the
Act.
A-1
<PAGE> 91
As used herein, "United States" means the United States of America
(including the States and District of Columbia); and its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
Securities held by you for our account in accordance with your operating
procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certification excepts and does not relate to $_____________ of
such interest in the above Securities in respect of which we are not able to
certify and as to which we understand exchange and delivery of definitive
Securities (or, if relevant, exercise of any rights or collection of any
interest) cannot be made until we do so certify.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
(1) Dated:
NAME OF PERSON MAKING CERTIFICATION
By: __________________________________________________________
As, or as Agent for, the beneficial owner(s) of the
Securities to which this Certificate relates
By: __________________________________________________________
As, or as Agent for, the financial institution (if any)
through which a United States Person acquired the
Securities to which this Certificate relates
_________________
(1) To be dated no earlier than the Certification Date.
A-2
<PAGE> 92
EXHIBIT B
FORM OF CERTIFICATION TO BE GIVEN
BY EUROCLEAR OR CEDEL S.A.
UNION TEXAS PETROLEUM HOLDINGS, INC.
[TITLE OF SECURITIES]
(THE "SECURITIES")
This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion
of the principal amount set forth below (our "Member Organizations")
substantially to the effect set forth in the Indenture, dated as of
_________________________, between Union Texas Petroleum Holdings, Inc. and The
First National Bank of Chicago, as of the date hereof, [ ] principal amount of
the above captioned Securities (i) is owned by persons that are not citizens or
residents of the United States, domestic partnerships, domestic corporations or
any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States persons"), (ii) is
owned by United States persons that (A) are foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section
1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account
or for resale, or (B) acquired the Securities through foreign branches of
United States financial institutions and who hold the Securities through such
United States financial institutions on the date hereof (and in either case (A)
or (B), each such United States financial institution has certified, on its own
behalf or through its agent, that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by United States or
foreign financial institutions for purposes of resale during the restricted
period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and to the further effect that the United States or
foreign financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its
possessions.
If the Securities are of the category contemplated in Section
230.903(c)(3) of Regulation S under the Securities Act of 1933, as amended (the
"Act"), then this is also to certify with respect to the principal amount of
Securities set forth above that, except as set forth below, we have received in
writing, by tested telex or by electronic transmission, from our Member
Organizations entitled to a portion of such principal amount, certifications
with respect to such portion, substantially to the effect set forth in the
Indenture.
B-1
<PAGE> 93
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the temporary global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification or a
copy hereof to any interested party in such proceedings.
Dated:
(dated the Exchange Date or the
Interest Payment Date)
________________________________________
as operator of the Euroclear System
[Morgan Guaranty Trust Company of
New York, Brussels Office]
or
[CEDEL S.A.]
By __________________________________
B-2
<PAGE> 1
EXHIBIT 4.3
FORM OF SENIOR NOTE
[FACE OF SECURITY]
UNION TEXAS PETROLEUM HOLDINGS, INC.
% SENIOR NOTE DUE
CUSIP
No. $
Union Texas Petroleum Holdings, Inc., a Delaware corporation (the
"Company"), for value received promises to pay to or
registered assigns, the principal sum of Dollars on
.
Interest Payment Dates:
Record Dates:
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated:
[SEAL] UNION TEXAS PETROLEUM HOLDINGS, INC.
By:
------------------------------------------
By:
------------------------------------------
Certificate of Authentication:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:
------------------------------------------
Authorized Signatory
<PAGE> 2
FORM OF SENIOR NOTE
[REVERSE OF SECURITY]
UNION TEXAS PETROLEUM HOLDINGS, INC.
% SENIOR NOTE DUE
1. Interest. Union Texas Petroleum Holdings, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at % per annum from until maturity. The Company
will pay interest semiannually on and of each year
(each an "Interest Payment Date"), or if any such day is not a Business Day, on
the next succeeding Business Day. Interest on the Securities will accrue from
the most recent Interest Payment Date on which interest has been paid or, if no
interest has been paid, from ; provided, that if there is no
existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be . The Company shall pay interest on
overdue principal and premium, if any, from time to time on demand at a rate
equal to the interest rate then in effect; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are canceled after such record
date and on or before such Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect principal payments. The Company will pay
the principal of, premium, if any, and interest on the Securities in money of
the United States of America that at the time of payment is legal tender for
payment of public and private debts. The Company, however, may pay such amounts
by check payable in such money. It may mail an interest check to a Holder's
registered address.
3. Ranking. The Securities will be senior unsecured obligations of the
Company.
4. Paying Agent and Registrar. Initially, The First National Bank of
Chicago, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder. The Company may act in any such capacity.
5. Indenture. The Company issued the Securities under an Indenture dated as
of March 15, 1995, as amended (the "Indenture"), among the Company, certain
subsidiaries of the Company named therein and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code sec.sec. 77aaa-77bbbb), as in effect on the date of execution of the
Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Securities are unsecured general obligations of the Company limited to
$ in aggregate principal amount.
6. Optional Redemption. The Securities may be redeemed at any time, at the
option of the Company, in whole or from time to time in part, at a price equal
to 100% of their principal amount plus accrued and unpaid interest, if any, to
the Redemption Date plus the Make-Whole Premium, if any (the "Redemption
Price"). The amount of the Make-Whole Premium with respect to any Security (or
portion thereof) to be redeemed will be equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the Redemption
Date, of:
(A) each interest payment that, but for such redemption, would have
been payable on the Security (or portion thereof) being redeemed on each
Interest Payment Date occurring after the Redemption Date (excluding any
accrued interest for the period prior to the Redemption Date); and
<PAGE> 3
FORM OF SENIOR NOTE
(B) the principal amount that, but for such redemption, would have
been payable at the final maturity of the Security (or portion thereof)
being redeemed;
over
(ii) the principal amount of the Security (or portion thereof) being
redeemed.
The present values of interest and principal payments referred to in clause (i)
above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a discount rate equal to the Treasury Yield. The Make-Whole Premium will be
calculated by an independent investment banking institution of national standing
appointed by the Company; provided, that if the Company fails to make such
appointment at least 10 business days prior to the Redemption Date, or if the
institution so appointed is unwilling or unable to make such calculation, such
calculation will be made by Salomon Brothers, Inc or, if such firm is unwilling
or unable to make such calculation, by an independent investment banking
institution of national standing appointed by the Trustee (in any such case, an
"Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means
a rate of interest per annum equal to the weekly average yield to maturity of
United States Treasury Notes that have a constant maturity that corresponds to
the remaining term to maturity of the Securities, calculated to the nearest
1/12 of a year (the "Remaining Term"). The Treasury Yield will be determined as
of the third business day immediately preceding the applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be determined by
reference to the most recent statistical release published by the Federal
Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or
any successor release (the "H.15 Statistical Release"). If the H.15 Statistical
Release sets forth a weekly average yield for United States Treasury Notes
having a constant maturity that is the same as the Remaining Term, then the
Treasury Yield will be equal to such weekly average yield. In all other cases,
the Treasury Yield will be calculated by interpolation, on a straight-line
basis, between the weekly average yields on the United States Treasury Notes
that have a constant maturity closest to and greater than the Remaining Term and
the United States Treasury Notes that have a constant maturity closest to and
less than the Remaining Term (in each case as set forth in the H.15 Statistical
Release). Any weekly average yields so calculated by interpolation will be
rounded to the nearest 1/100 of 1%, with any figure of 1/200% or above being
rounded upward. If weekly average yields for United States Treasury Notes are
not available in the H.15 Statistical Release or otherwise, then the Treasury
Yield will be calculated by interpolation of comparable rates selected by the
Independent Investment Banker.
Periodic interest installments with respect to which the Interest Payment
Date is on or prior to any Redemption Date will be payable to the Holders of
record at the close of business on the relevant record dates referred to herein,
all as provided in the Indenture.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, provided that if all the
Securities of a Holder are to be redeemed, the entire outstanding amount of
Securities held by such Holder, even if not a whole multiple of $1,000, will be
redeemed. On and after the Redemption Date, interest will cease to accrue on
Securities or on the portions thereof called for redemption, as the case may be.
7. Denominations, Transfer, Exchange. The Securities are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar and the Trustee may
<PAGE> 4
FORM OF SENIOR NOTE
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Security or portion of a Security selected for redemption. Also, it need not
exchange or register the transfer of any Securities for a period of 15 days
before a selection of Securities to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
8. Persons Deemed Owners. The registered Holder of a Security shall be
treated as its owner for all purposes.
9. Amendments and Waivers. Subject to certain exceptions and limitations,
the Indenture or the Securities may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Securities, and any existing Default under, or compliance with any
provision of, the Indenture may be waived (other than any continuing Default or
Event of Default in the payment of the principal of or premium, if any, or
interest on the Securities) by the Holders of at least a majority in principal
amount of the Securities then outstanding in accordance with the terms of the
Indenture. Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Securities to evidence the assumption
by any successor to the Company of the covenants in the Indenture and the
Securities; to add to the covenants of the Company for the benefit of the
Holders; to add any additional Events of Default with respect to the Securities;
to provide for uncertificated Securities in addition to or in place of
certificated Securities and to provide for certificated Securities in addition
to or in place of uncertificated Securities; to make any change that does not
adversely affect any Security; to establish the form or terms of Securities; to
permit or facilitate the defeasance or discharge of any series of Securities; to
provide for the acceptance of appointment by a successor Trustee and the
administration of the trusts by more than one Trustee; to provide for guarantees
of the Securities or to reflect the release of any guarantor from its guarantee,
or the addition of any Subsidiary of the Company as a guarantor; to cure any
ambiguity, omission, defect or inconsistency; or to comply with the
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of the Indenture.
Without the consent of each Holder affected, the Company may not (i) reduce
the percentage in principal amount of Securities whose Holders must consent to
an amendment, supplement or waiver, (ii) reduce the rate of or change the time
for payment of interest, including default interest, on any Security, (iii)
reduce the principal of or change the fixed maturity of any Security or alter
the premium or other provisions with respect to redemption, (iv) make any
Security payable in money other than that stated in the Security, (v) impair the
right to institute suit for the enforcement of any payment of principal of, or
premium, if any, or interest on any Security, (vi) reduce the percentage in
principal amount of Securities necessary to waive compliance with certain
provisions of the Indenture or (vii) waive a continuing Default or Event of
Default in the payment of principal of or premium, if any, or interest on the
Securities.
10. Defaults and Remedies. Events of Default include: default in payment of
interest on the Securities for 30 days; default in payment of principal of or
premium, if any, on the Securities; failure by the Company for 60 days after
written notice by the Trustee or by the Holders of at least 25% of the aggregate
principal amount of the Securities then outstanding to it to comply with any of
its other covenants or agreements in the Indenture or the Securities; the
acceleration of the maturity of any Indebtedness of the Company or any
Restricted Subsidiary (other than the Securities or any Non-Recourse
Indebtedness) that has an outstanding principal amount of $20 million or more
individually or in
<PAGE> 5
FORM OF SENIOR NOTE
the aggregate; a default in the payment of principal or interest in respect of
any Indebtedness of the Company or any Restricted Subsidiary (other than the
Securities or any Non-Recourse Indebtedness) having an outstanding principal
amount of $20 million or more individually or in the aggregate, and such default
shall be continuing for a period of 30 days without the Company or such
Restricted Subsidiary, as the case may be, effecting a cure of such default; or
certain events involving bankruptcy, insolvency or reorganization of the Company
or any Restricted Subsidiary. If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities may declare the principal of, and premium, if any, and
interest on all the Securities to be immediately due and payable, except that in
the case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization of the Company or any Restricted Subsidiary, all
outstanding Securities become due and payable immediately without further action
or notice. The amount due and payable upon the acceleration of any Security is
equal to 100% of the principal amount thereof plus accrued interest to the date
of payment. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity reasonably
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
11. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
12. No Recourse against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.
13. Authentication. This Security shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77056
Attention: General Counsel
<PAGE> 6
FORM OF SENIOR NOTE
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
as agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
-------------------------- --------------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
-----------------------------------------------------------
(Participant in a Recognized Signature Guaranty
Medallion Program)
<PAGE> 1
EXHIBIT 4.4
FORM OF FIXED-RATE MEDIUM-TERM NOTE
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(1)
<TABLE>
<S> <C> <C>
REGISTERED CUSIP No. PRINCIPAL AMOUNT
No. FXR-
------------------ ----------------- ----------------
UNION TEXAS PETROLEUM HOLDINGS, INC.
SENIOR MEDIUM-TERM NOTE, SERIES A
(Fixed Rate)
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE:
EXTENSION OF MATURITY
[ ] Yes [ ] No
EXTENSION PERIOD: FINAL MATURITY:
INTEREST PAYMENT DATE(S) RECORD DATE(S): DEFAULT RATE:
[ ] [ ]
---------- and ---------- ---------- and ----------
[ ] Other: [ ] Other:
REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
COMMENCEMENT PERCENTAGE: PERCENTAGE
DATE: REDUCTION:
REDEMPTION WITH
MAKE-WHOLE PREMIUM
</TABLE>
__________________________________
(1) This paragraph applies to Global Securities only.
<PAGE> 2
[ ] Yes [ ] No
OPTIONAL REPAYMENT
DATE(S):
[ ] Check if an Original Issue
Discount Note Issue Price: %
SPECIFIED CURRENCY:
[ ] U.S. dollars
[ ] Other
EXCHANGE RATE AGENT:
AUTHORIZED DENOMINATION:
[ ] $1,000 and integral multiples
thereof
[ ] Other:
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
-2-
<PAGE> 3
UNION TEXAS PETROLEUM HOLDINGS, INC. (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to __________________________
______________________________________________, or registered assigns, the
principal sum of _____________________________________________, on the Stated
Maturity Date specified above (or any Redemption Date or Repayment Date, each as
defined on the reverse hereof) (each such Stated Maturity Date, Redemption Date
or Repayment Date being hereinafter referred to as the "Maturity Date") with
respect to the principal repayable on such date) and to pay interest thereon, at
the Interest Rate per annum specified above, until the principal hereof is paid
or duly made available for payment, and (to the extent that the payment of such
interest shall be legally enforceable) at the Default Rate per annum specified
above on any overdue principal, premium and/or interest. The Company will pay
interest in arrears on each Interest Payment Date, if any, specified above
(each, an "Interest Payment Date"), commencing with the first Interest Payment
Date next succeeding the Original Issue Date specified above, and on the
Maturity Date; provided, however, that if the Original Issue Date occurs between
a Regular Record Date (as defined below) and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date next succeeding the Original Issue Date to the Holder of this Note on the
Regular Record Date with respect to such second Interest Payment Date. Unless
otherwise specified on the face hereof, interest on this Note will be computed
on the basis of a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly
provided for (or from, and including, the Original Issue Date if no interest
has been paid or duly provided for with respect to this Note) to, but
excluding, the applicable Interest Payment Date or the Maturity Date, as the
case may be (each, an "Interest Period"). The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions described herein, be paid to the person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the Record Date specified above (whether or not a Business Day, as
defined below) that is next preceding the June 15 and December 15 or other
specified Interest Payment Dates (the "Regular Record Date"); provided,
however, that interest payable on the Maturity Date will be payable to the
person to whom the principal hereof and premium, if any, hereon shall be
payable. Any such interest not so punctually paid or duly provided for on any
Interest Payment Date with respect to this Note ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the Regular Record Date, and
shall be paid to the person in whose name this Note is registered at the close
of business on a special record date (the "Special Record Date") for the
payment of such Defaulted Interest to be fixed by the Trustee hereinafter
referred to, notice whereof shall be given to the Holder of this Note by the
Trustee not less than 10 calendar days prior to such Special Record Date, or
shall be paid at any time in any other lawful manner, all as more completely
described in the Indenture applicable to this Note.
"Business Day", as used herein, means each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking institutions are
authorized or obligated by law, regulation or executive order to close in The
City of New York or any other place or places where the principal of (and
premium, if any) and interest on the Notes is payable and with respect to Notes
denominated in a Specified Currency other than U.S. dollars, in the Principal
Financial Center (as defined below) of the country issuing the Specified
Currency.
Payment of principal of (and premium, if any) and any interest in
respect of this Note due on the Maturity Date to be made in U.S. dollars will
be made in immediately available funds upon presentation and surrender of this
Note (and, with respect to any applicable repayment of this Note, a duly
completed election form as contemplated on the reverse hereof) at the office of
the Paying Agent as the Company may determine; provided, however, that if such
payment is to be made in a Specified Currency other than U.S. dollars as set
forth below, such payment will be made
-3-
<PAGE> 4
by wire transfer of immediately available funds to an account with a bank
located in the Principal Financial Center of the country issuing the Specified
Currency (or, for Notes denominated in European Currency Units ("ECUs"), to an
ECU account) or other jurisdiction acceptable to the Company and the Paying
Agent as shall have been designated by the Holder hereof at least five Business
Days prior to the Maturity Date, provided that such bank has appropriate
facilities therefor and that this Note (and, if applicable, a duly completed
election form) is presented and surrendered at the aforementioned office of the
Paying Agent in time for the Paying Agent to make such payments in such funds in
accordance with its normal procedures. Such designation shall be made by filing
the appropriate information with the Paying Agent at the office of the Paying
Agent in The City of New York, and, unless revoked, any such designation made
with respect to this Note by its registered Holder will remain in effect with
respect to any further payments with respect to this Note payable to its
Holder. If a payment with respect to this Note cannot be made by wire
transfer because the required designation has not been received by the Paying
Agent on or before the requisite date or for any other reason, a notice will
be mailed to the Holder of this Note at its registered address requesting a
designation pursuant to which such wire transfer can be made and, upon the
Paying Agent's receipt of such a designation, such payment will be made within
five Business Days of such receipt. The Company will pay any administrative
costs imposed by banks in connection with making payments by wire transfer,
but any tax, assessment or governmental charge imposed upon payments will be
borne by the Holder of this Note.
Payments of interest due on any Interest Payment Date other than the
Maturity Date to be made in U.S. dollars will be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Security Register maintained at the Payment Agent Office; provided, however,
that a Holder of U.S. $10,000,000 (or, if the Specified Currency specified above
is other than U.S. dollars, the equivalent thereof in the Specified Currency) or
more in aggregate principal amount of Notes (whether having identical or
different terms and provisions) will be entitled to receive interest payments on
such Interest Payment Date by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Paying Agent not less than five calendar days prior to such Interest Payment
Date. Any such wire transfer instructions received by the Paying Agent shall
remain in effect until revoked by such Holder.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date
such payment was due, and no interest shall accrue with respect to such payment
for the period from and after such Interest Payment Date or the Maturity Date,
as the case may be, to the date of such payment on the next succeeding Business
Day.
"Principal Financial Center" means the capital city of the country
issuing the Specified Currency in respect of which payment on the Notes is to
be made, except that with respect to U.S. dollars, Australian dollars, German
Marks, Dutch Guilders, Italian Lire, Swiss Francs and ECUs, the Principal
Financial Center shall be The City of New York, Sydney, Frankfurt, Amsterdam,
Milan, Zurich and Luxembourg, respectively.
The Company is obligated to make payment of principal, premium, if
any, and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is
other than U.S. dollars, any such amounts so payable by the Company will be
converted by the Exchange Rate Agent specified above into U.S. dollars for
payment to the Holder of this Note; provided, however, that the Holder of this
Note may elect to receive such amounts in the Specified Currency pursuant to
the provisions set forth below.
Payments of principal of (and premium, if any) and interest on any
Note denominated in a Specified Currency other than U.S. dollars (a "Foreign
Currency Note") will be made in U.S. dollars if the registered Holder of such
Note
-4-
<PAGE> 5
on the relevant Regular Record Date, or at maturity, as the case may be, has
transmitted a written request for such payment in U.S. dollars to the Paying
Agent at the office of the Paying Agent in The City of New York on or before
such Regular Record Date, or the date 15 days before maturity, as the case may
be. Such request may be in writing (mailed or hand delivered) or sent by cable,
telex, or other form of facsimile transmission. Any such request made for any
Note by a registered Holder will remain in effect for any further payments of
principal of (and premium, if any) and interest on such Note payable to such
Holder, unless such request is revoked on or before the relevant Regular Record
Date or the date 15 days before maturity, as the case may be. Holders of Notes
denominated in a Specified Currency other than U.S. dollars that are
registered in the name of a broker or nominee should contact such broker or
nominee to determine whether and how to elect to receive payments in U.S.
dollars.
The U.S. dollar amount to be received by a Holder of a Foreign
Currency Note who elects to receive payment in U.S. dollars will be based on
the highest bid quotation in The City of New York received by the Exchange Rate
Agent as of 11:00 a.m., New York City time, on the second Business Day next
preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent) for the purchase by the
quoting dealer of the Specified Currency for U.S. dollars for settlement on
such payment date in the aggregate amount of the Specified Currency payable to
all Holders of Notes electing to receive U.S. dollar payments and at which the
applicable dealer commits to execute a contract. If three such bid quotations
are not available on the second Business Day preceding the date of payment of
principal (and premium, if any) or interest for any Note, such payment will be
made in the Specified Currency. All currency exchange costs associated with any
payment in U.S. dollars on any such Note will be borne by the Holder thereof by
deductions from such payment.
A Holder of a Foreign Currency Note may elect to receive payment of
the principal of and premium, if any, and interest on such Note in the
Specified Currency by submitting a written request for such payment to the
Trustee at its Corporate Trust Office in The City of New York on or prior to
the applicable record date or at least 15 calendar days prior to the Maturity
Date, as the case may be. Such written request may be mailed or hand-delivered
or sent by cable, telex or other form of facsimile transmission. A Holder of a
Foreign Currency Note may elect to receive payment in the applicable Specified
Currency for all such principal, premium, if any, and interest payments and
need not file a separate election for each payment. Such election will remain
in effect until revoked by written notice to the Trustee, but written notice of
any such revocation must be received by the Trustee on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Holders of Foreign Currency Notes whose Notes are to be
held in the name of a broker or nominee should contact such broker or nominee
to determine whether and how an election to receive payments in the applicable
Specified Currency may be made.
If the principal of (and premium, if any) or any interest on any Note
is payable in a Specified Currency other than U.S. dollars and such Specified
Currency is not available to the Company for making payments thereof due to the
imposition of exchange controls or other circumstances beyond the control of
the Company, the Company will be entitled to satisfy its obligations to the
Holder of such Note by making such payment (including any such payment at
maturity) in U.S. dollars on the basis of the Market Exchange Rate as
determined on the second Business Day prior to such payment or, if such Market
Exchange Rate is not then available, on the basis of the most recently
available Market Exchange Rate or as otherwise provided herein. Any payment
made under such circumstances in U.S. dollars where the required payment is in
a Specified Currency other than U.S. dollars will not constitute an Event of
Default under the applicable Indenture. The "Market Exchange Rate" for a
Specified Currency other than U.S. dollars means the noon dollar buying rate in
The City of New York for the cable transfer for such Specified Currency, as
such rate is reported or otherwise made available by the Federal Reserve Bank
of New York, provided, however, in the case of ECUs, Market Exchange Rate shall
mean the rate of exchange determined by the Commission of the European
Communities (or any successor thereto) as published in the Official Journal of
the European Communities, or any successor publication.
-5-
<PAGE> 6
Any U.S. dollar amount to be received by a Holder of a Foreign
Currency Note will be based on the highest bid quotation in The City of New
York received by the Exchange Rate Agent at approximately 11:00 A.M. New York
City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the Exchange
Rate Agent) selected by the Exchange Rate Agent and approved by the Company for
the quoting dealer of the Specified Currency for U.S. dollars for settlement on
such payment date in the aggregate amount of the Specified Currency payable to
all Holders of Foreign Currency Notes scheduled to receive U.S. dollar payments
and at which the applicable dealer commits to execute a contract. All currency
exchange costs will be borne by the Holder of such Foreign Currency Note by
deductions from such payments. If three such bid quotations are not available,
payments will be made in the Specified Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth
on the face hereof.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Union Texas Petroleum Holdings, Inc. has caused
this Note to be executed.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By:
---------------------------------
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION:
This is one of the Notes of the series
designated therein referred to in the
within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
------------------------------------
Authorized Signatory
-6-
<PAGE> 7
[REVERSE OF NOTE]
UNION TEXAS PETROLEUM HOLDINGS, INC.
SENIOR MEDIUM-TERM NOTE, SERIES A
(Fixed Rate)
This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company issued and to be issued under an Indenture,
dated as of March 15, 1995, as amended, modified or supplemented from time to
time (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Debt Securities, and of the terms upon which the
Debt Securities are, and are to be, authenticated and delivered. This Note is
one of the series of Debt Securities designated as "Medium-Term Notes, Series A
Due 9 Months or more from Date of Issue" (the "Notes"). All terms used but not
defined in this Note specified on the face hereof or in an Addendum hereto
shall have the meanings assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons. Notes
denominated in U.S. dollars will be initially issued in denominations of $1,000
and integral multiples thereof, and Notes denominated in other than U.S.
dollars will be initially issued in the equivalent of $1,000 in the Specified
Currency (rounded down to an integral multiple of 1,000 units of such Specified
Currency), at the noon buying rate for cable transfers in The City of New York
for such Specified Currency (the "Exchange Rate") on the Business Day next
preceding the date on which the Company accepts the offer to purchase such
Note. Interest rates offered by the Company with respect to a Note may differ
depending upon, among other things, the aggregate principal amount of the Notes
purchased in any single transaction.
This Note will not be subject to any sinking fund and, unless
otherwise provided on the face hereof in accordance with the provisions of the
following two paragraphs, will not be redeemable or repayable prior to the
Stated Maturity Date.
This Note will be subject to redemption at the option of the Company
on any date on and after the Redemption Commencement Date, if any, specified on
the face hereof, in whole or from time to time in part in increments of U.S.
$1,000 or the minimum authorized denomination (provided that any remaining
principal amount hereof shall be at least U.S. $1,000 or such minimum
authorized denomination, at the Redemption Price (as defined below), together
with unpaid interest accrued thereon to the date fixed for redemption (each, a
"Redemption Date"), on notice given no more than 60 nor less than 30 calendar
days prior to the Redemption Date and in accordance with the provisions of the
Indenture. The "Redemption Price" shall initially be 100% of unpaid principal
amount to be redeemed plus any accrued interest to the Redemption Date (subject
to the right of Holder of record of this Note on the relevant Regular Record
Date to receive interest due on an Interest Payment Date that is on or prior to
the Redemption Date), plus a Make-Whole Premium (as defined below). In the
event of redemption of the Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same terms as this Note
shall be issued in the name of the Holder hereof upon the presentation and
surrender hereof.
The amount of the Make-Whole Premium with respect to any Note (or
portion thereof) to be redeemed will be equal to the excess, if any, of:
-7-
<PAGE> 8
(i) the sum of the present values, calculated of the
Redemption Date, of:
(A) each interest payment that, but for such
redemption, would have been payable on the Note (or portion
thereof) being redeemed on such Interest Payment Date occurring
after the Redemption Date (excluding any accrued interest for
the period prior to the Redemption Date); and
(B) the principal amount that, but for such
redemption, would have been payable at the final maturity of
the Note (or portion thereof) being redeemed;
over
(ii) the principal amount of the Note (or portion thereof)
being redeemed.
The present values of interest and principal payments referred to in clause (i)
above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a discount rate equal to the Treasury Yield (as defined below).
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided,
that if the Company fails to make such appointment at least 10 business days
prior to the Redemption Date, or if the institution so appointed is unwilling
or unable to make such calculation, such calculation will be made by Salomon
Brothers Inc or, if such firm is unwilling or unable to make such calculation,
by an independent investment banking institution of national standing appointed
by the Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield"
means a rate of interest per annum equal to the weekly average yield to
maturity of United States Treasury Notes that have a constant maturity that
corresponds to the remaining term to maturity of the Notes, calculated to the
nearest 1/12 of a year (the "Remaining Term"). The Treasury Yield will be
determined as of the third Business Day immediately preceding the applicable
Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent H.15(519). If the H.15(519) sets
forth a weekly average yield for United States Treasury Notes having a constant
maturity that is the same as the Remaining Term, then the Treasury Yield will
be equal to such weekly average yield. In all other cases, the Treasury Yield
will be calculated by interpolation, on a straight-line basis, between the
weekly average yields on the United States Treasury Notes that have a constant
maturity closest to and greater than the Remaining Term and the United States
Treasury Notes that have a constant maturity closest to and less than the
Remaining Term (in each case as set forth in the H.15(519)). Any weekly
average yields so calculated by interpolation will be rounded to the nearest
1/100 of 1%, with any figure of 1/200 of 1% or above being rounded upward. If
weekly average yields for United States Treasury Notes are not available in the
H.15(519) or otherwise, then the Treasury Yield will be calculated by
interpolation of comparable rates selected by the Independent Investment
Banker.
This Note will be subject to repayment by the Company at the option of
the Holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S. $1,000 or the minimum
authorized denomination (provided that any remaining principal amount hereof
shall be a minimum authorized denomination), at a repayment price equal to 100%
of the unpaid principal amount to be repaid, together with unpaid interest
accrued thereon to the date fixed for repayment (each, a "Repayment Date").
For this Note to be repaid, this Note must be received by the Trustee at its
corporate trust office not more than 60 nor less than 30 calendar days prior to
the Repayment Date, together with (i) the form herein entitled "Option to Elect
Repayment" duly completed or (ii) a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or a trust company
in the United States of America setting
-8-
<PAGE> 9
forth the name of the holder of the Note, the Principal amount of the Note, the
amount of the Note to be repaid, a statement that the option to elect repayment
is being exercised thereby and a guarantee that the Note to be repaid with the
form entitled "Option to Elect Repayment" herein duly completed will be received
by the Company not later than three Business Days after the date of such
telegram, telex, facsimile transmission or letter and such Note and form duly
completed are received by the Company by such third Business Day. Exercise of
such repayment option by the Holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the Holder hereof upon the presentation and surrender hereof.
All questions as to the validity, eligibility (including time of receipt) and
acceptance of this Note for repayment will be determined by the Company, whose
determination will be final and binding.
If this Note is an Original Issue Discount Note as specified on the
face hereof, the amount payable to the Holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to (i) the
Amortized Face Amount (as defined below) as of the date of such event, plus
(ii) with respect to any redemption, the Initial Redemption Percentage (as
adjusted by the Annual Redemption Percentage Reduction, if any) minus 100%
multiplied by the Issue Price specified on the face hereof, net of any portion
of such Issue Price which has been paid prior to the Redemption Date, or the
portion of the Issue Price (or the net amount) proportionate to the portion of
the unpaid principal amount to be redeemed, plus (iii) any accrued interest to
the date of such event, the payment of which would constitute qualified stated
interest payments within the meaning of Treasury Regulation 1.1273-1(c) under
the Internal Revenue Code of 1986, as amended (the "Code"), plus (iv) with
respect to any redemption of an Original Issue Discount Note, unless otherwise
specified on the face hereof, the Make-Whole Premium (defined above). The
accrued interest described in clause (iii) above will be computed on the basis
of a 360-day year of twelve 30-day months, compounded semiannually. The
"Amortized Face Amount" means an amount equal to (i) the Issue Price plus (ii)
the aggregate portions of the original issue discount (the excess of the
amounts considered as part of the "stated redemption price at maturity" of this
Note within the meaning of Section 1273(a)(2) of the Code, whether denominated
as principal or interest, over the Issue Price) which shall theretofore have
accrued pursuant to Section 1272 of the Code (without regard to Section
1272(a)(7) of the Code) from the Original Issue Date to the date of
determination, minus (iii) any amount considered as part of the "stated
redemption price at maturity" of this Note which has been paid from the
Original Issue Date to the date of determination.
If any Maturity Date of an Original Discount Note that bears no
interest falls on a day that is not a Business Day with respect to such
Original Issue Discount Note, the payment due at such Maturity Date will be
made on the following day that is a Business Day with the same force and effect
as if it were made on the date such payment was due, and no interest shall
accrue on the amount so payable for the period from and after such Maturity
Date.
Unless otherwise stated on the face hereof, each Note will mature at
the Stated Maturity of such Note. If stated on the face hereof, the Company
has the option to extend the Stated Maturity of such Note for one or more
periods of whole years from one to five (each an "Extension Period") up to but
not beyond the date (the "Final Maturity") set forth on the face hereof.
The Company may exercise such option with respect to a Note by
notifying the Trustee of such exercise at least 45 but not more than 60 days
prior to the old Stated Maturity for such Note. Not later than 40 days prior to
the old Stated Maturity of such Note, the Trustee for such Note will mail or
deliver to the holder of such Note a notice (the "Extension Notice"), first
class, postage prepaid. The Extension Notice will set forth (i) the election of
the Company to extend the Stated Maturity of such Note; (ii) the new Stated
Maturity; (iii) the interest rate applicable to the Extension Period; and (iv)
the provisions, if any, for redemption during the Extension Period, including
the date or dates on which or the period or periods during which and the price
or prices at which such redemption may occur during the Extension Period. Upon
the mailing by such Trustee of an Extension Notice to the holder of a Note, the
Stated Maturity of such Note shall be
-9-
<PAGE> 10
extended automatically, and, except as modified by the Extension Notice and as
described in the next paragraph, such Note will have the same terms as prior to
the mailing or delivering of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
old Stated Maturity of such Note (or, if such day is not a Business Day, on the
immediately succeeding Business Day), the Company may, at its option, revoke
the interest rate provided for in the Extension Notice for such Note and
establish a higher interest rate for the Extension Period, by causing the
Trustee for such Note to mail notice of such higher interest rate, first class,
postage prepaid, to the holder of such Note. Such notice will be irrevocable.
All Notes with respect to which the Stated Maturity is extended will bear such
higher interest rate for the Extension Period, whether or not tendered for
repayment.
If the Company extends the Stated Maturity of this Note, the holder of
this Note will have the option to elect repayment of such Note by the Company
on the old Stated Maturity at a price equal to the aggregate principal amount
thereof outstanding on, plus interest accrued to, such date or, for an Original
Issue Discount Note, as described above. In order for a Note to be repaid on
the old Stated Maturity once the Company has extended the Stated Maturity
thereof, the holder thereof must follow the procedures applicable to redemption
and repayment for optional repayment, except that (i) the period for delivery
of this Note or notification to the Trustee for this Note will be at least 25
but not more than 35 days prior to the old Stated Maturity and (ii) a holder
who has tendered a Note for repayment pursuant to an Extension Notice may, by
written notice to the Trustee, revoke any such tender for repayment until the
close of business on the tenth day before the old Stated Maturity.
If an Event of Default, as defined in the Indenture, shall occur and
be continuing, the principal of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority of the aggregate principal
amount of the outstanding Debt Securities, on behalf of the Holders of all such
Debt Securities, to waive compliance by the Company with certain provisions of
the Indenture. Furthermore, provisions in the Indenture permit the Holders of
not less than a majority of the aggregate principal amount of the outstanding
Debt Securities, in certain instances, to waive, on behalf of all of the
Holders of Debt Securities of such series, certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and other Notes issued upon the registration of transfer
hereof or in exchange heretofore or in lieu hereof, whether or not notation of
such consent or waiver is made upon the Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein and herein set forth, the transfer of this Note is registrable in the
Security Register of the Company upon surrender of this Note for registration
of transfer at the office or agency of the Company in any place where the
principal hereof and any premium or interest hereon are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and
-10-
<PAGE> 11
the Trustee duly executed by, the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein and herein set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different authorized denominations but otherwise
having the same terms and conditions, as requested by the Holder hereof
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note 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 entirely in such State.
-11-
<PAGE> 12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Note, shall be construed as though they were written out in full according to
applicable laws or regulations:
<TABLE>
<S> <C> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties --------------------- ---------------------
JT TEN - as joint tenants with right of (Cust) (Minor)
survivorship and not as tenants in common under Uniform Gifts to Minors Act
--------------------------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undesigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------
| |
| |
- --------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- --------------------------------------------------------------------------------
the within Note and all rights thereunder hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------- Attorney
to transfer said Note on the books of the Trustee, with full power of
substitution in the premises.
Date:
---------------------------- ------------------------------------------
------------------------------------------
Notice: The signature(s) on this
assignment must correspond with the
name(s) as written upon the face of the
within Note in every particular, without
alteration or enlargement or any change
whatsoever.
-12-
<PAGE> 13
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at
----------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office, not more than 60 nor less than 30 calendar days prior to the
Repayment Date, this Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S. $1,000 (or, if
the Specified Currency is other than U.S. dollars, the minimum authorized
denomination specified on the face hereof)) which the Holder elects to have
repaid and specify the denomination or denominations (which shall be an
authorized Denomination) of the Notes to be issued to the Holder for the
portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $
---------------- ----------------------------------
Notice: The signature(s) on this
Date: Option to Elect Repayment must
-------------------------- correspond with the name(s) as
written upon the face of the
within Note in every particular,
without alteration or enlargement
or any change whatsoever.
-13-
<PAGE> 1
EXHIBIT 4.5
FORM OF FLOATING RATE MEDIUM-TERM NOTE
FACE OF NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(1)
REGISTERED CUSIP No. PRINCIPAL AMOUNT
No. FLR-______________ ___________________ _______________________
UNION TEXAS PETROLEUM HOLDINGS, INC.
SENIOR MEDIUM-TERM NOTE, SERIES A
(Floating Rate)
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR:
[ ] LIBOR Reuters
[ ] LIBOR Telerate
INDEX CURRENCY:
EXTENSION OF MATURITY
[ ] Yes [ ] No
EXTENSION PERIOD: FINAL MATURITY:
INDEX MATURITY: INITIAL INTEREST RATE: INTEREST RESET PERIOD:
__________________________________
(1) This paragraph applies to Global Securities only.
<PAGE> 2
SPREAD MINIMUM INTEREST RATE: INTEREST PAYMENT DATE(S):
(PLUS OR MINUS):
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: INTEREST RESET DATE(S):
DEFAULT RATE:
REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
COMMENCEMENT PERCENTAGE: PERCENTAGE REDUCTION:
DATE:
REDEMPTION WITH
MAKE-WHOLE PREMIUM
[ ] Yes (per addendum)
[ ] No
OPTIONAL REPAYMENT
DATE(S):
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: from to
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: from to
[ ] Indexed Note Applicable Interest Rate Basis:
[ ] Original Issue Discount Note
Issue Price: %
SPECIFIED CURRENCY:
[ ] U.S. dollars
[ ] Other
EXCHANGE RATE AGENT:
AUTHORIZED DENOMINATION:
[ ] $1,000 and integral multiples
thereof
[ ] Other:
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
-2-
<PAGE> 3
UNION TEXAS PETROLEUM HOLDINGS, INC. (the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _________________________________
_______________________________________, or registered assigns, the principal
sum of _____________________________________________ on the Stated Maturity
specified above (or any Redemption Date or Repayment Date, each as defined on
the reverse hereof) (each such Stated Maturity, Redemption Date or Repayment
Date being hereinafter referred to as the "Maturity Date" with respect to the
principal repayable on such date) and to pay interest thereon, at a rate per
annum equal to the Initial Interest Rate specified above, until the Interest
Reset Date specified above and thereafter at a rate determined in accordance
with the provisions specified above and on the reverse hereof with respect to
one or more Interest Rate Bases specified above until the principal hereof is
paid or duly made available for payment, and (to the extent that the payment of
such interest shall be legally enforceable) at the Default Rate per annum
specified above on any overdue principal, premium and/or interest. The Company
will pay interest in arrears on each Interest Payment Date, if any, specified
above (each, an "Interest Payment Date"), commencing with the first Interest
Payment Date next succeeding the Original Issue Date specified above, and on the
Maturity Date; provided, however, that if the Original Issue Date occurs between
a Regular Record Date (as defined below) and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date next succeeding the Original Issue Date to the Holder of this Note on the
Regular Record Date with respect to such second Interest Payment Date.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly
provided for (or from, and including, the Original Issue Date if no interest
has been paid or duly provided for with respect to this Note) to, but
excluding, the applicable Interest Payment Date or the Maturity Date, as the
case may be (each, an "Interest Period"). The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions described herein, be paid to the person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the fifteenth calendar day (whether or not a Business Day, as
defined below) immediately preceding such Interest Payment Date (the "Regular
Record Date"); provided, however, that interest payable on the Maturity Date
will be payable to the person to whom the principal hereof and premium, if any,
hereon shall be payable. Any such interest not so punctually paid or duly
provided for on any Interest Payment Date with respect to this Note ("Defaulted
Interest") will forthwith cease to be payable to the Holder on the Regular
Record Date, and shall be paid to the person in whose name this Note is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee hereinafter referred to, notice whereof shall be given to the Holder of
this Note by the Trustee not less than 10 calendar days prior to such Special
Record Date, or shall be paid at any time in any other lawful manner, all as
more completely described in the Indenture applicable to this Note.
The "Spread" is the number of basis points specified on the face hereof
to be added or subtracted from the related Interest Rate Basis on the face
hereof, and the "Spread Multiplier" is the percentage specified on the face
hereof as applying to the Interest Rate Basis for this Note.
"Index Maturity" means the period to maturity of the instrument or
obligation, as specified on the face hereof. Unless otherwise above, The First
National Bank of Chicago will be the calculation agent (the "Calculation
Agent") for this Note.
-3-
<PAGE> 4
"Business Day", as used herein, means each Monday, Tuesday, Wednesday,
Thursday and Friday that is neither a legal holiday nor a day on which banking
institutions are generally authorized or obligated by law or executive order to
close in The City of New York or any other place or places where the principal
of (and premium, if any) and interest on the Notes is payable and (i) with
respect to LIBOR Notes, in the City of London and (ii) with respect to Notes
denominated in a Specified Currency other than U.S. dollars, in the Principal
Financial Center (as defined below) of the country issuing the Specified
Currency. "London Business Day" means any day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.
Payment of principal of (and premium, if any) and any interest in
respect of this Note due on the Maturity Date to be made in U.S. dollars will
be made in immediately available funds upon presentation and surrender of this
Note (and, with respect to any applicable repayment of this Note, a duly
completed election form as contemplated on the reverse hereof) at the office of
the Paying Agent that the Company may determine; provided, however, that the
Note is presented to the Paying Agent in time for the Paying Agent to make such
payments in such funds in accordance with its normal procedures. If such
payment is to be made in a Specified Currency other than U.S. dollars as set
forth below, such payment will be made by wire transfer of immediately
available funds to an account with a bank located in the Principal Financial
Center of the country issuing the Specified Currency (or, for Notes denominated
in European Currency Units ("ECUs"), to an ECU account) or other jurisdiction
acceptable to the Company and the Paying Agent as shall have been designated by
the Holder hereof at least five Business Days prior to the Maturity Date,
provided that such bank has appropriate facilities therefor and that this Note
(and, if applicable, a duly completed election form) is presented and
surrendered at the aforementioned Paying Agent Office in time for the Paying
Agent to make such payments in such funds in accordance with its normal
procedures. Such designation shall be made by filing the appropriate
information with the Paying Agent at the Paying Agent Office in The City of New
York, and, unless revoked, any such designation made with respect to this Note
by its registered Holder will remain in effect with respect to any further
payments with respect to this Note payable to its Holder. If a payment with
respect to this Note cannot be made by wire transfer because the required
designation has not been received by the Paying Agent on or before the
requisite date or for any other reason, a notice will be mailed to the Holder
of this Note at its registered address requesting a designation pursuant to
which such wire transfer can be made and, upon the Paying Agent's receipt of
such a designation, such payment will be made within five Business Days of such
receipt. The Company will pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but any tax, assessment or
governmental charge imposed upon payments will be borne by the Holder of this
Note.
Payments of interest due on any Interest Payment Date other than the
Maturity Date to be made in U.S. dollars will be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Security Register maintained at the Payment Agent Office; provided, however,
that a Holder of U.S. $10,000,000 (or, if the Specified Currency specified
above is other than U.S. dollars, the equivalent thereof in the Specified
Currency) or more in aggregate principal amount of Notes (whether having
identical or different terms and provisions) will be entitled to receive
interest payments on such Interest Payment Date by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received in
writing by the Paying Agent not less than five calendar days prior to such
Interest Payment Date. Any such wire transfer instructions received by the
Paying Agent shall remain in effect until revoked by such Holder.
If any Interest Payment Date for any Floating Rate Note (other than the
Maturity Date) would otherwise be a day that is not a Business Day, the
required payment of interest may be made on the next succeeding Business day
with the same force and effect as if made on the date such payment was due,
except that in the case of a Floating Rate Note that is a LIBOR Note, if such
Business Day falls in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day. If a Maturity Date of a
Floating Rate Note falls on a date that is not a Business Day with the same
force and effect as if made on the date such payment was
-4-
<PAGE> 5
due, the required payment of interest and principal (and premium, if any) may
be made on the next succeeding Business Day, and no interest on such payment
will accrue for the period from and after the Maturity Date to the date of such
payment on the next succeeding Business Day.
"Principal Financial Center" means the capital city of the country
issuing the Specified Currency in respect of which payment on the Notes is to be
made or, with respect to the calculation of LIBOR, issuing the specified Index
Currency, except that with respect to U.S. dollars, Australian dollars, Deutsche
Marks, Dutch Guilders, Italian Lire, Swiss Francs and ECUs the Principal
Financial Center shall be The City of New York, Sydney, Frankfurt, Amsterdam,
Milan, Zurich and Luxembourg, respectively.
Except as otherwise provided herein, the Company is obligated to make
payment of principal, premium, if any, and interest in respect of this Note in
the Specified Currency (or, if the Specified Currency is not at the time of
such payment legal tender for the payment of public and private debts, in such
other coin or currency of the country which issued the Specified Currency as at
the time of such payment is legal tender for the payment of such debts). If
the Specified Currency is other than U.S. dollars, any such amounts so payable
by the Company will be converted by the Exchange Rate Agent specified above
into U.S. dollars for payment to the Holder of this Note; provided, however,
that to the extent specified above the Holder of this Note may elect to receive
such amounts pursuant to the provisions set forth below.
Payments of principal of (and premium, if any) and interest on any Note
denominated in a Specified Currency other than U.S. dollars (a "Foreign
Currency Note") will be made in U.S. dollars if the registered Holder of such
Note on the relevant Regular Record Date, or at maturity, as the case may be,
has transmitted a written request for such payment in U.S. dollars to the
Paying Agent at the Paying Agent Office in The City of New York on or before
such Regular Record Date, or the date 15 days before maturity, as the case may
be. Such request may be in writing (mailed or hand delivered) or sent by cable,
telex, or other form of facsimile transmission. Any such request made for any
Note by a registered Holder will remain in effect for any further payments of
principal of (and premium, if any) and interest on such Note payable to such
Holder, unless such request is revoked on or before the relevant Regular Record
Date or the date 15 days before maturity, as the case may be. Holders of
Foreign Currency Notes that are registered in the name of a broker or nominee
should contact such broker or nominee to determine whether and how to elect to
receive payments in U.S. dollars.
The U.S. dollar amount to be received by a Holder of a Foreign Currency
Note who elects to receive payment in U.S. dollars will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent as of
11:00 a.m., New York City time, on the second Business Day next preceding the
applicable payment date from three recognized foreign exchange dealers (one of
which may be the Exchange Rate Agent) for the purchase by the quoting dealer of
the Specified Currency for U.S. dollars for settlement on such payment date in
the aggregate amount of the Specified Currency payable to all Holders of Notes
electing to receive U.S. dollar payments and at which the applicable dealer
commits to execute a contract. If three such bid quotations are not available
on the second Business Day preceding the date of payment of principal (and
premium, if any) or interest for any Note, such payment will be made in the
Specified Currency. All currency exchange costs associated with any payment in
U.S. dollars on any such Note will be borne by the Holder thereof by deductions
from such payment.
A Holder of a Foreign Currency Note may elect to receive payment of the
principal of and premium, if any, and interest on such Note in the Specified
Currency by submitting a written request for such payment to the Trustee at its
Corporate Trust Office in The City of New York on or prior to the applicable
record date or at least 15 calendar days prior to the Maturity Date, as the
case may be. Such written request may be mailed or hand-delivered or sent by
cable, telex or other form of facsimile transmission. A Holder of a Foreign
Currency Note may elect to
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<PAGE> 6
receive payment in the applicable Specified Currency for all such principal,
premium, if any, and interest payments and need not file a separate election
for each payment. Such election will remain in effect until revoked by written
notice to the Trustee, but written notice of any such revocation must be
received by the Trustee on or prior to the applicable Record Date or at least
15 calendar days prior to the Maturity Date, as the case may be. Holders of
Foreign Currency Notes whose Notes are to be held in the name of a broker or
nominee should contact such broker or nominee to determine whether and how an
election to receive payments in the applicable Specified Currency may be made.
If the principal of (and premium, if any) or any interest on any Note is
payable in other than U.S. dollars and such Specified Currency is not available
due to the imposition of exchange controls or other circumstances beyond the
control of the Company, the Company will be entitled to satisfy its obligations
to the Holder of such Note by making such payment (including any such payment
at maturity) in U.S. dollars on the basis of the Market Exchange Rate on the
second Business Day prior to such payment or, if such Market Exchange Rate is
not then available, on the basis of the most recently available Market Exchange
Rate or as otherwise specified herein. The "Market Exchange Rate" for a
Specified Currency other than U.S. dollars means the noon buying rate in The
City of New York for cable transfers of such Specified Currency, as such rate
is reported or otherwise made available by the Federal Reserve Bank of New
York; provided, however, in the case of European Currency Units ("ECUs"),
Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Communities (or any successor thereto) as published
in the Official Journal of the European Communities, or any successor
publication, on the Business Day immediately preceding the trade date for such
Notes.
Any U.S. dollar amount to be received by a Holder of a Foreign Currency
Note will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 a.m. New York City
time, on the second Business Day preceding the applicable payment date from
three recognized foreign exchange dealers (one of whom may be the Exchange Rate
Agent) selected by the Exchange Rate Agent and approved by the Company for the
quoting dealer of the Specified Currency for U.S. dollars for settlement on
such payment date in the aggregate amount of the Specified Currency payable to
all Holders of Foreign Currency Notes scheduled to receive U.S. dollar payments
and at which the applicable dealer commits to execute a contract. All currency
exchange costs will be borne by the Holder of such Foreign Currency Note by
deductions from such payments. If three such bid quotations are not available,
payments will be made in the Specified Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth
on the face hereof.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
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<PAGE> 7
IN WITNESS WHEREOF, Union Texas Petroleum Holdings, Inc. has caused this
Note to be executed.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By: ___________________________________
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION:
This is one of the Notes of the series
designated therein referred to in the
within-mentioned Indenture.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: _______________________________
Authorized Signatory
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<PAGE> 8
REVERSE OF NOTE
UNION TEXAS PETROLEUM HOLDINGS, INC.
SENIOR MEDIUM-TERM NOTE, SERIES A
(Floating Rate)
This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company issued and to be issued under an Indenture,
dated as of March 15, 1995, as amended, modified or supplemented from time to
time (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Debt Securities, and of the terms upon which the
Debt Securities are, and are to be, authenticated and delivered. This Note is
one of the series of Debt Securities designated as "Medium-Term Notes, Series A
Due 9 Months or more from Date of Issue" (the "Notes"). All terms used but not
defined in this Note specified on the face hereof or in an Addendum hereto
shall have the meanings assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons. Notes
denominated in U.S. dollars will be initially issued in denominations of $1,000
and integral multiples thereof, and Notes denominated in other than U.S.
dollars will be initially issued in denominations in the equivalent of $1,000
in the Specified Currency (rounded to 1,000 units or rounded down to an
integral multiple of 1,000 units of such Specified Currency), at the noon
buying rate for cable transfers in The City of New York for such Specified
Currency (the "Exchange Rate") on the first Business Day next preceding the
date on which the Company accepts the offer to purchase such Note. Interest
rates offered by the Company with respect to a Note may differ depending upon,
among other things, the aggregate principal amount of the Notes purchased in
any single transaction.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated
Maturity Date.
This Note will be subject to redemption at the option of the Company on
any date on and after the Redemption Commencement Date, if any, specified on
the face hereof, in whole or from time to time in part in increments of U.S.
$1,000 or the minimum authorized denomination (provided that any remaining
principal amount hereof shall be at least U.S. $1,000 or such minimum
authorized denomination, at the Redemption Price (as defined below), together
with unpaid interest accrued thereon to the date fixed for redemption (each, a
"Redemption Date"), on notice given no more than 60 nor less than 30 calendar
days prior to the Redemption Date and in accordance with the provisions of the
Indenture. Except as otherwise specified on the face hereof, the "Redemption
Price" shall initially be the Initial Redemption Percentage specified on the
face hereof multiplied by the unpaid principal amount of this Note to be
redeemed. The Initial Redemption Percentage shall decline at each anniversary
of the Redemption Commencement Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
the Note in part only, a new Note of like tenor for the unredeemed portion
hereof and otherwise having the same terms as this Note shall be issued in the
name of the Holder hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the Holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S. $1,000 or the minimum
authorized denomination (provided that any remaining principal amount hereof
shall be a minimum authorized
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<PAGE> 9
denomination), at a repayment price equal to 100% of the unpaid principal
amount to be repaid, together with unpaid interest accrued thereon to the date
fixed for repayment (each, a "Repayment Date"). For this Note to be repaid,
this Note must be received, together with the form herein entitled "Option to
Elect Repayment" duly completed, by the Trustee at its corporate trust office
not more than 60 nor less than 30 calendar days prior to the Repayment Date.
Exercise of such repayment option by the Holder hereof will be irrevocable. In
the event of repayment of this Note in part only, a new Note of like tenor for
the unpaid portion hereof and otherwise having the same terms as this Note
shall be issued in the name of the Holder hereof upon the presentation and
surrender hereof.
If the Interest Category of this Note is as specified on the face hereof
an Original Issue Discount Note, the amount payable to the Holder of this Note
in the event of redemption, repayment or acceleration of maturity will be equal
to (i) the Amortized Face Amount (as defined below) as of the date of such
event, plus (ii) with respect to any redemption, the Initial Redemption
Percentage (as adjusted by the Annual Redemption Percentage Reduction, if any)
minus 100% multiplied by the Issue Price specified on the face hereof, net of
any portion of such Issue Price which has been paid prior to the Redemption
Date, or the portion of the Issue Price (or the net amount) proportionate to
the portion of the unpaid principal amount to be redeemed, plus (iii) any
accrued interest to the date of such event the payment of which would
constitute qualified stated interest payments within the meaning of Treasury
Regulation 1.1273-1(c) under the Internal Revenue Code of 1986, as amended (the
"Code"). The "Amortized Face Amount" shall mean an amount equal to (i) the
Issue Price plus (ii) the aggregate portions of the original issue discount
(the excess of the amounts considered as part of the "stated redemption price
at maturity" of this Note within the meaning of Section 1273(a)(2) of the Code,
whether denominated as principal or interest, over the Issue Price) which shall
theretofore have accrued pursuant to Section 1272 of the Code (without regard
to Section 1272(a)(7) of the Code) from the Original Issue Date to the date of
determination, minus (iii) any amount considered as part of the "stated
redemption price at maturity" of this Note which has been paid from the
Original Issue Date to the date of determination.
If any Maturity Date of an Original Issue Discount Note that bears no
interest falls on a day that is not a Business Day with respect to such
Original Issue Discount Note, the payment due at such Maturity Date will be
made on the following day that is a Business Day as if it were made on the date
such payment was due, and no interest shall accrue on the amount so payable for
the period from and after such Maturity Date.
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note", an "Inverse Floating
Rate Note" or as having an Addendum attached, this Note shall be
designated as a "Regular Floating Rate Note" and, except as set forth
below or on the face hereof, shall bear interest at the rate determined
by reference to the applicable Interest Rate Basis or Bases specified on
the face hereof (a) plus or minus the Spread, if any, and/or (b)
multiplied by the Spread Multiplier, if any, in each case as specified
on the face hereof. Commencing on the first Interest Reset Date, the
rate at which interest on this Note shall be payable shall be reset as
of each Interest Reset Date specified on the face hereof; provided,
however, that the interest rate in effect for the period, if any, from
the Original Issue Date to the first Interest Reset Date shall be the
Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the face
hereof as a "Floating Rate/Fixed Rate Note", then, except as set forth
below or on the face hereof, this Note shall bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases
specified on the face hereof (a) plus or minus the Spread, if any,
and/or (b) multiplied by the Spread Multiplier, if any. Commencing on
the first Interest Reset Date, the rate at which interest on this Note
shall be payable shall be reset as of each Interest Reset Date;
provided, however, that the interest rate in effect for the period, if
any, from the Original Issue Date to the first Interest Reset Date shall
be the Initial Interest Rate and the interest rate in effect for the
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<PAGE> 10
period commencing on the Fixed Rate Commencement Date specified on the
face hereof to the Maturity Date shall be the Fixed Interest Rate
specified on the face hereof, or, if no Fixed Interest Rate is
specified, the interest rate in effect hereon on the day immediately
preceding the Fixed Rate Commencement Date.
(iii) If the Interest Category of this Note is specified on the face
hereof as an "Inverse Floating Rate Note", then, except as set forth
below or on the face hereof, this Note shall bear interest at the Fixed
Interest Rate specified on the face hereof minus the rate determined by
reference to the applicable Interest Rate Basis or Bases specified on
the face hereof (a) plus or minus the Spread, if any, and/or (b)
multiplied by the Spread Multiplier, if any; provided, however, that,
unless otherwise specified on the face hereof, the interest rate hereon
during any Interest Reset Period shall not be less than zero.
Commencing on the first Interest Reset Date, the rate at which interest
on this Note shall be payable shall be reset as of each Interest Reset
Date; provided, however, that the interest rate in effect for the
period, if any, from the Original Issue Date to the first Interest Reset
Date shall be the Initial Interest Rate.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall bear interest in accordance with and be subject to the terms set forth in
such Addendum or such "Other/Additional Provisions".
Unless otherwise specified on the face hereof, the interest rate with
respect to each Interest Rate Basis will be determined in accordance with the
applicable provisions below. Except as set forth above, the interest rate in
effect on each day shall be (i) if such day is an Interest Reset Date, the
interest rate determined as of the Interest Determination Date (as hereinafter
defined) immediately preceding such Interest Reset Date or (ii) if such day is
not an Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the most recent Interest Reset Date
(or, if none, the Initial Interest rate). If any Interest Reset Date would
otherwise be a day that is not a Business Day, such Interest Reset Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day.
The interest rate in effect with respect to this Note from the date of
issue to the first Interest Reset Date (the "Initial Interest Rate") will be as
specified on the face of this Note. The interest rate applicable to each
Interest Reset Period commencing on the Interest Reset Date with respect to
such Interest Reset Period will be the rate determined as of the applicable
Interest Determination Date on or prior to the Calculation Date (as defined
below). The "Interest Determination Date" with respect to the CD Rate Notes,
the CMT Rate Notes, the Commercial Paper Rate Notes, the Federal Funds Rate
Notes and the Prime Rate Notes will be the second Business Day immediately
preceding the applicable Interest Reset Date; the "Interest Determination Date"
with respect to the Eleventh District Cost of Funds Rate will be the last
working day of the month immediately preceding the applicable Interest Reset
Date on which the Federal Home Loan Bank of San Francisco publishes the Index
(as hereinafter defined); and the "Interest Determination Date" with respect to
LIBOR Notes will be the second London Business Day immediately preceding the
applicable Interest Reset Date. With respect to the Treasury Rate Notes, the
"Interest Determination Date" will be the day in the week in which the
applicable Interest Reset Date falls on which Treasury Bills (as defined below)
would normally be auctioned (Treasury Bills are normally sold at an auction
held on Monday of each week, unless that day is a legal holiday, in which case
the auction is normally held on the following Tuesday, except that such auction
may be held on the preceding Friday); provided, however, that if an auction is
held on the Friday of the week preceding the applicable Interest Reset Date,
the Interest Determination Date shall be such preceding Friday; and provided,
further, that if an auction shall fall on the applicable Interest Reset Date,
then the Interest Reset Date shall instead be the first Business Day following
such auction. If the interest rate of this Note is determined with reference
to two or more Interest Rate Bases specified on the face hereof, the "Interest
Determination Date" pertaining to this Note shall be the second Business Day
prior to the applicable Interest Reset Date on which each Interest Rate Basis
is determinable. Each Interest Rate
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<PAGE> 11
Basis shall be determined as of such date, and the applicable interest rate
shall take effect on the applicable Interest Reset Date.
If any Interest Payment Date for this Note (other than the Maturity
Date) would otherwise be a day that is not a Business Day, such Interest
Payment Date will be postponed to the next day that is a Business Day, except
that in the case of a Note that is a LIBOR Note, if such Business Day falls in
the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day. If a Maturity Date of this Note falls on a
date that is not a Business Day, the required payment of interest and principal
(and premium, if any) may be made on the next succeeding Business Day with the
same force and effect as if made on the date such payment was due, and no
interest on such payment will accrue for the period from and after the Maturity
Date to the date of such payment on the next succeeding Business Day.
Unless otherwise specified on the face hereof, interest payments for
this Note shall be the amount of interest accrued from and including the date
of issue, or from and including the last date to which interest has been paid,
to, but excluding, the Interest Payment Date or Maturity Date, as the case may
be. The interest rate in effect on any Interest Reset Date will be the
applicable rate as reset on such date. The interest rate applicable to any
other day is the interest rate as reset on the immediately preceding Interest
Reset Date (or, if none, the Initial Interest Rate).
With respect to this Note, accrued interest is calculated by multiplying
its principal amount by an accrued interest factor. Such accrued interest
factor is computed by adding the interest factor calculated for each day in the
period for which accrued interest is being calculated. Unless otherwise
specified as the Day Count Convention on the face hereof, the interest factor
for each such day will be computed by dividing the interest rate applicable to
such day by 360, in the case of CD Rate Notes, Commercial Paper Rate Notes,
Eleventh District Cost of Funds Rate Notes, Federal Funds Rate Notes, LIBOR
Notes or Prime Rate Notes, or by the actual number of days in the year in the
case of CMT Rate Notes or the Treasury Rate Notes. Unless otherwise specified
in the Day Count Convention on the face hereof, the interest factor for Notes
for which the interest rate is calculated with reference to two or more
Interest Rate Bases will be calculated in each period in the same manner as if
only one of the applicable Interest Rate Bases applied as specified on the face
hereof. All percentages resulting from any calculation on this Note will be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all U.S. dollar
amounts used in or resulting from such calculation on this Note will be rounded
to the nearest cent.
Upon request of the holder of this Note, the Calculation Agent will
disclose the interest rate then in effect and, if determined, the interest rate
that will become effective as a result of a determination made for the next
succeeding Interest Reset Date with respect to this Note. Unless otherwise
specified on the face hereof, the "Calculation Date," if applicable, pertaining
to any Interest Determination Date will be the earlier of (i) the tenth
calendar day after such Interest Determination Date, or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity
Date, as the case may be.
Unless otherwise specified on the face hereof, the Calculation Agent
will determine the interest rate with respect to each Interest Rate Basis in
accordance with the applicable provisions below.
CD Rate. CD Rate Notes will bear interest at the rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any, and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified on the face hereof.
If an Interest Rate Basis for this Note is specified on the face hereof
as the CD Rate, the CD Rate will be determined as of the applicable Interest
Determination Date (a "CD Rate Interest Determination Date") as the rate on
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<PAGE> 12
such date for negotiable certificates of deposit having the specified Index
Maturity as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates" or any successor
publication ("H.15(519)") under the heading "CDS (Secondary Market)," or if not
published by 3:00 p.m., New York City time, on the related Calculation Date,
the rate on such CD Rate Interest Determination Date for negotiable
certificates of deposit having the specified Index Maturity as published in
Composite Quotations under the heading "Certificates of Deposit." If such rate
is not published in either H.15(519) or Composite Quotations by 3:00 p.m., New
York City time, on the related Calculation Date, then the CD Rate on such CD
Rate Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the secondary market offered rates as of
10:00 a.m., New York City time, on such CD Rate Interest Determination Date, of
three leading nonbank dealers in negotiable U.S. dollar certificates of deposit
in The City of New York (which may include one or more Agents or their
affiliates) selected by the Calculation Agent for negotiable certificates of
deposit of major United States money market banks for negotiable certificates
of deposit with a remaining maturity closest to the specified Index Maturity in
an amount that is representative for a single transaction in that market at
that time; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate on
such CD Rate Interest Determination Date will be the CD Rate in effect on such
CD Rate Interest Determination Date.
CMT Rate. CMT Rate Notes will bear interest at the rates (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any,
and subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified on the face hereof.
If an Interest Rate for this Note is specified on the face hereof as
the CMT Rate, the CMT Rate will be determined as of the applicable Interest
Determination Date (a "CMT Rate Interest Determination Date") as the rate
displayed on the Designated CMT Telerate Page (as defined below) under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board
Release H.15 . . . Mondays Approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date
and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month,
as specified on the face hereof, ended immediately preceding the week in which
the related CMT Rate Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page, or if not displayed by 3:00 P.M., New
York City time, on the related Calculation Date, then the CMT Rate for such CMT
Rate Interest Determination Date will be such treasury constant maturity rate
for the Designated CMT Maturity Index as published in the relevant H.15(519).
If such rate is no longer published, or if not published by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for
the Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date
with respect to such Interest Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be calculated
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<PAGE> 13
by the Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 P.M., New York City time, on the CMT Rate Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York (which may include one or more of the Agents
or their affiliates) selected by the Calculation Agent (from five such
Reference Dealers selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated
CMT Maturity Index and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year. If the Calculation Agent cannot
obtain three such Treasury Note quotations, the CMT Rate for such CMT Rate
Interest Determination Date will be calculated by the Calculation Agent and
will be a yield to maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 P.M., New York City time, on
the CMT Rate Interest Determination Date of three Reference Dealers in The City
of New York (from five such Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)) for Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least U.S. $100 million. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers selected by the Calculation Agent
are quoting as described herein, the CMT Rate will be the CMT Rate in effect on
such CMT Rate Interest Determination Date. If two Treasury Notes with an
original maturity as described in the second preceding sentence have remaining
terms to maturity equally close to the Designated CMT Maturity Index, the
quotes for the Treasury Note with the shorter remaining term to maturity will
be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated on the face hereof (or any other page
as may replace such page on that service) for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page will be 7052 for
the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index will be 2 years.
Commercial Paper Rate. Commercial Paper Rate Notes will bear interest
at the rates (calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier, if any, and subject to the Minimum Interest
Rate and the Maximum Interest Rate, if any) specified on the face hereof.
If an Interest Rate Basis for this Note is specified on the face hereof
as the Commercial Paper Rate, the Commercial Paper Rate will be determined as
of the applicable Interest Determination Date (a "Commercial Paper Rate
Interest Determination Date") as the Money Market Yield (calculated as
described below) on such date of the rate for commercial paper having the
specified Index Maturity as published in H.15(519) under the heading Commercial
Paper. In the event that such rate is not published by 3:00 p.m., New York
City time, on the related Calculation Date, then the Commercial Paper Rate will
be the Money Market Yield on such Commercial Paper Interest Determination Date
of the rate for commercial paper having the specified Index Maturity as
published in Composite Quotations under the heading "Commercial Paper" (with an
Index Maturity of one month or three months being deemed to be equivalent to an
Index Maturity of 30 days or 90 days, respectively). If by 3:00 p.m., New York
City time, on the related Calculation Date such rate is not yet published in
H.15(519) or Composite Quotations, then the Commercial Paper Rate on such
Interest Determination Date will be calculated by the Calculation Agent and
will be the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 a.m., New York City time, on such Commercial Paper Rate
Interest Determination Date, of three leading dealers of commercial paper in
The City of New York (which may include one or more Agents or their affiliates)
selected by the Calculation Agent for commercial paper having the specified
Index Maturity placed for an industrial issuer whose bond rating is "AA," or
the equivalent, from a nationally recognized rating agency; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Commercial Paper Rate will be the
Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a percent
rounded upwards) calculated in accordance with the following formula:
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<PAGE> 14
Money Market Yield = D X 360 X 100
----------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
Eleventh District Cost of Funds Rate. Eleventh District Cost of Funds
Rate Notes will bear interest at the rates (calculated with reference to the
Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier,
if any, and subject to the Minimum Interest Rate and the Maximum Interest Rate,
if any) specified on the face hereof.
If an Interest Rate Basis for this Note is specified on the face hereof
as the Eleventh District Cost of Funds Rate, the Eleventh District Cost of
Funds Rate will be determined as of the applicable Interest Determination Date
(an "Eleventh District Cost of Funds Rate Interest Determination Date") as the
rate equal to the monthly weighted average cost of funds for the calendar month
immediately preceding the month in which such Eleventh District Cost of Funds
Rate Interest Determination Date falls, as set forth under the caption "11th
District" on Telerate Page 7058 as of 11:00 a.m., San Francisco time, on such
Eleventh District Cost of Funds Rate Interest Determination Date. If such rate
does not appear on Telerate Page 7058 on such Eleventh District Cost of Funds
Rate Interest Determination Date, the Eleventh District Cost of Funds Rate on
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced by
the Federal Home Loan Bank of San Francisco as such cost of funds for the
calendar month immediately preceding the date of such announcement. If the
Federal Home Loan Bank of San Francisco fails to announce such rate for the
calendar month immediately preceding such Eleventh District Cost of Funds Rate
Interest Determination Date, the Eleventh District Cost of Funds Rate
determined as of such Eleventh District Cost of Funds Rate Interest
Determination Date will be the Eleventh District Cost of Funds Rate in effect
on such Eleventh District Cost of Funds Rate Interest Determination Date.
Federal Funds Rate. Federal Funds Rate Notes will bear interest at the
rates (calculated with reference to the Federal Funds Rate and the Spread
and/or Spread Multiplier, if any, and subject to the Minimum Interest Rate and
the Maximum Interest Rate, if any) specified on the face hereof.
If an Interest Rate Basis for this Note is specified on the face hereof
as the Federal Funds Rate, the Federal Funds Rate will be determined as of the
applicable Interest Determination Date (a "Federal Funds Rate Interest
Determination Date") as the rate on such date for federal funds as published in
H.15(519) under the heading "Federal Funds (Effective)" or, if not published by
3:00 p.m., New York City time, on the related Calculation Date, the rate on
such Federal Funds Rate Interest Determination Date as published in Composite
Quotations under the column "Effective Rate" under the heading "Federal Funds."
If by 3:00 p.m., New York City time, on the related Calculation Date such rate
is not published in either H.15(519) or Composite Quotations, then the Federal
Funds Rate on such Federal Funds Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
rates for the last transaction in overnight United States dollar federal funds
arranged by three leading brokers of federal funds transactions in The City of
New York (which may include one or more of the Agents or their affiliates)
selected by the Calculation Agent prior to 9:00 a.m., New York City time, on
such Federal Funds Rate Interest Determination Date; provided, however, that if
the brokers so selected by the Calculation Agent are not quoting as mentioned
in this sentence, the Federal Funds Rate determined as of such Federal Funds
Rate Interest Determination Date will be the Federal Funds Rate in effect on
such Federal Funds Rate Interest Determination Date.
-14-
<PAGE> 15
LIBOR. LIBOR Rate Notes will bear interest at the rates (calculated
with reference to the LIBOR Rate and the Spread and/or Spread Multiplier, if
any, and subject to the Minimum Interest Rate and the Maximum Interest Rate, if
any) specified on the face hereof.
If an Interest Rate Basis for this Note is specified on the face hereof
as LIBOR, LIBOR will be determined by the Calculation Agent in accordance with
the following provisions:
(i) With respect to an Interest Determination Date relating to a
LIBOR Note or any Floating Rate Note for which the interest is
determined with reference to LIBOR (a "LIBOR Interest Determination
Date"), LIBOR will be, as specified on the face hereof, either: (a) the
arithmetic mean of the offered rates for deposits in the Index Currency
(as defined below) having the Index Maturity designated on the face
hereof, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, that appear on the
Reuters Screen LIBO Page specified on the face hereof as of 11:00 a.m.
London time, on such LIBOR Interest Determination Date, if at least two
such offered rates appear on such Reuters Screen LIBO Page, unless such
Reuters Screen LIBO Page by its terms provides only for a single rate,
in which case such single rate will be used ("LIBO Reuters"), or (b) the
rate for deposits in the Index Currency having the Index Maturity
designated on the face hereof, commencing on the second London Business
Day immediately following such LIBOR Interest Determination Date, that
appears on the Telerate Page 3750 as of 11:00 a.m., London time, on such
LIBOR Interest Determination Date ("LIBOR Telerate"). "Reuters Screen
LIBO Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank
offered rates of major banks). "Telerate Page 3750" means the display
designated as page "3750" on the Dow Jones Telerate Service (or such
other page as may replace the 3750 page on that service or such other
service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates
of major banks for the applicable Index Currency). If neither LIBOR
Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR for
the applicable Index Currency will be determined as if LIBOR Telerate
(and, if the U.S. dollar is the Index Currency, page 3750) had been
specified. If fewer than two offered rates appear on the Reuters Screen
LIBO Page, or if no such rate appears on Telerate Page 3750, as
applicable, LIBOR in respect of that LIBOR Interest Determination Date
will be determined as if the parties had specified the rate described in
clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates (unless, as aforesaid, only a single rate
is required) appear on the Reuters Screen LIBO Page, as specified in
(i)(a) above, or on which no rate appears on Telerate Page 3750, as
specified in (i)(b) above, as applicable, LIBOR will be determined on
the basis of the rates at which deposits in the Index Currency having
the Index Maturity designated on the face hereof are offered at
approximately 11:00 A.M., London time, on that LIBOR Interest
Determination Date by four major banks in the London interbank market
selected by the Calculation Agent ("Reference Banks") to prime banks in
the London interbank market, commencing on the second London Business
Day immediately following that LIBOR Interest Determination Date and in
a principal amount that is representative for a single transaction in
such Index Currency in such market at such time. The Calculation Agent
will request the principal London office of each of the Reference Banks
to provide a quotation of its rate. If at least two such quotations are
provided, LIBOR in respect of that LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m., in the Principal Financial Center for the
country of the Index Currency, on the LIBOR Interest Determination Date
by three major banks in such Principal Financial Center (which may
include affiliates of the Agents) selected by the Calculation Agent for
loans
-15-
<PAGE> 16
in the Index Currency to leading European banks, having the Index
Maturity designated on the face hereof commencing on the second London
Business Day immediately following such LIBOR Interest Determination
Date and in a principal amount that is representative for a single
transaction in such Index Currency in such market at such time;
provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR
with respect to such LIBOR Interest Determination Date will be the rate
of LIBOR in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency (including composite currencies)
specified on the face hereof as the currency for which LIBOR shall be
calculated. If no such currency is specified on the face hereof, the Index
Currency shall be U.S. dollars.
Prime Rate. Prime Rate Notes will bear interest at the rates
(calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified on the face hereof.
If an Interest Rate Basis for this Note is specified on the face hereof
as the Prime Rate, the Prime Rate will be determined as of the applicable
Interest Determination Date (a "Prime Rate Interest Determination Date") as the
rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 p.m., New York
City time, on the related Calculation Date, then the Prime Rate will be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates but more than one such rate
appear on the Reuters Screen USPRIME1 for such Prime Rate Interest
Determination Date, the Prime Rate will be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by
360 as of the close of business on such Prime Rate Interest Determination Date
by four major money center banks in The City of New York selected by the
Calculation Agent. If fewer than two such rates appear on the Reuters Screen
USPRIME1, the Prime Rate will be determined by the Calculation Agent on the
basis of the rates furnished in The City of New York by three substitute banks
or trust companies organized and doing business under the laws of the United
States, or any State thereof, in each case having total equity capital of at
least $500 million and being subject to supervision or examination by Federal
or State authority, selected by the Calculation Agent to provide such rate or
rates; provided, however, that if the banks or trust companies as aforesaid are
not quoting as mentioned in this sentence, the Prime Rate determined as of such
Prime Rate Interest Determination Date will be the Prime Rate in effect on such
Prime Rate Interest Determination Date.
"Reuters Screen USPRIME1" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as
may replace the USPRIME1 page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks).
Treasury Rate. Treasury Rate Notes will bear interest at the rates
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified on the face hereof.
If an Interest Rate Basis for this Note is specified on the face hereof
as the Treasury Rate, the Treasury Rate will be determined as of the applicable
Interest Determination Date (a "Treasury Rate Interest Determination Date") as
the rate applicable to the auction held on such Treasury Rate Interest
Determination Date of direct obligations of the United States ("Treasury
Bills") having the specified Index Maturity designated on the face hereof as
published in H.15(519) under the heading "Treasury Bills--auction average
(investment)" or, if not so published by 3:00 p.m., New York City time, on the
relevant Calculation Date pertaining to such Treasury Rate Interest
Determination Date, the auction average rate (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
-16-
<PAGE> 17
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of such auction of Treasury Bills having the
specified Index Maturity are not published or reported as provided above by
3:00 p.m., New York City time, on such Calculation Date, or if no such auction
is held on such Treasury Rate Interest Determination Date, then the Treasury
Rate will be calculated by the Calculation Agent and will be a yield to
maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of
the secondary market bid rates as of approximately 3:30 p.m., New York City
time, on such Treasury Rate Interest Determination Date, of three leading
primary United States government securities dealers (which may include one or
more of the Agents or their affiliates) selected by the Calculation Agent for
the issue of Treasury Bills with a remaining maturity closest to the specified
Index Maturity; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Treasury Rate
Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Rate, if any, or less than the Minimum Rate, if any,
specified on the face hereof. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application.
Unless otherwise stated on the face hereof, each Note will mature at the
Stated Maturity of such Note. If stated on the face hereof, the Company has
the option to extend the Stated Maturity of this Note for one or more periods
of whole years from one to five (each an "Extension Period") up to but not
beyond the date (the "Final Maturity") set forth in on the face hereof.
The Company may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 45 but not more than 60 days prior to the
old Stated Maturity for this Note. Not later than 40 days prior to the old
Stated Maturity of such Note, the Trustee for such Note will mail or deliver to
the holder of such Note a notice (the "Extension Notice"), first class, postage
prepaid. The Extension Notice will set forth (i) the election of the Company to
extend the Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in
the case of a Floating Rate Note, the Spread and/or Spread Multiplier
applicable to the Extension Period; and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by such
Trustee of an Extension Notice to the holder of a Note, the Stated Maturity of
such Note shall be extended automatically, and, except as modified by the
Extension Notice and as described in the next paragraph, such Note will have
the same terms as prior to the mailing or delivering of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the old
Stated Maturity of such Note (or, if such day is not a Business Day, on the
immediately succeeding Business Day), the Company may, at its option, revoke
the Spread and/or Spread Multiplier provided for in the Extension Notice for
such Note and establish a higher Spread and/or Spread Multiplier (in the case
of a Floating Rate Note, or a lower Spread and/or Spread Multiplier in the case
of an Inverse Floating Rate Note) for the Extension Period, by causing the
Trustee for such Note to mail notice of such new Spread and/or Spread
Multiplier first class, postage prepaid, to the holder of this Note. Such
notice will be irrevocable. All Notes with respect to which the Stated Maturity
is extended will bear such Spread Multiplier (in the case of Floating Rate
Notes) for the Extension Period, whether or not tendered for repayment.
If the Company extends the Stated Maturity of this Note, the holder of
this Note will have the option to elect repayment of such Note by the Company
on the old Stated Maturity at a price equal to the principal amount thereof,
plus interest accrued to such date. In order for this Note to be repaid on the
old Stated Maturity once the Company has extended the Stated Maturity hereof,
the holder thereof must follow the procedures applicable to redemption and
repayment for optional repayment, except that (i) the period for delivery of
such Note or notification to the Trustee for
-17-
<PAGE> 18
such Note will be at least 25 but not more than 35 days prior to the old Stated
Maturity and (ii) a holder who has tendered a Note for repayment pursuant to an
Extension Notice may, by written notice to the Trustee, revoke any such tender
for repayment until the close of business on the tenth day before the old
Stated Maturity.
All percentages resulting from any calculation on this Note shall be
rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point and all U.S. dollar amounts used in or resulting from such
calculation on this Note shall be rounded to the nearest cent (with one-half
cent being rounded upwards) and, in the case of a Specified Currency other than
U.S. dollars, to the nearest unit (with one-half unit being rounded upwards).
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority of the aggregate principal
amount of the outstanding Debt Securities, on behalf of the Holders of all such
Debt Securities, to waive compliance by the Company with certain provisions of
the Indenture. Furthermore, provisions in the Indenture permit the Holders of
not less than a majority of the aggregate principal amount of the outstanding
Debt Securities, in certain instances, to waive, on behalf of all of the
Holders of Debt Securities of such series, certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and other Notes issued upon the registration of transfer
hereof or in exchange heretofore or in lieu hereof, whether or not notation of
such consent or waiver is made upon the Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of
transfer at the office or agency of the Company in any place where the
principal hereof and any premium or interest hereon are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. As provided in the
Indenture and subject to certain limitations therein and herein set forth, this
Note is exchangeable for a like aggregate principal amount of Notes of
different authorized denominations but otherwise having the same terms and
conditions, as requested by the Holder hereof surrendering the same. No
service charge shall be made for any such registration of transfer or exchange,
but the company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder in whose name this Note is registered as the owner thereof for all
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<PAGE> 19
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note 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 entirely in such State.
-19-
<PAGE> 20
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, 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 GIFT MIN ACT - ________ Custodian _______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants in common _________________________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undesigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
the within Note and all rights thereunder hereby irrevocably constituting and
appointing
________________________________________________________________________________
Attorney to transfer said Note on the books of the Trustee, with full power of
substitution in the premises.
Date: _____________________________ _________________________________________
_________________________________________
Notice: The signature(s) on this
assignment must correspond with the
name(s) as written upon the face of the
within Note in every particular, without
alteration or enlargement or any
change whatsoever.
-20-
<PAGE> 21
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Optional Repayment Date, to the
undersigned, at_________________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office, not more than 60 nor less than 30 calendar days prior to the
Optional Repayment Date, this Note with this "Option to Elect Repayment" form
duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S. $1,000 (or, if
the Specified Currency is other than U.S. dollars, the minimum Authorized
Denomination specified on the face hereof)) which the Holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the Holder for the
portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $______________ ______________________________________
Notice: The signature(s) on this
Option to Elect Repayment must
correspond with the name(s) as
Date:_________________________ written upon the face of the within
Note in every particular, without
alteration or enlargement or any
change whatsoever.
-21-
<PAGE> 1
November 7, 1995
Board of Directors
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77056
Gentlemen:
In our capacity as special counsel to Union Texas Petroleum Holdings,
Inc., a Delaware corporation (the "Company"), we have acted as counsel in
connection with the Company's Registration Statement on Form S-3 (the
"Registration Statement") relating to registration under the Securities Act of
1933, as amended (the "Act"), of the offering and sale of up to $100,000,000
aggregate principal amount of debt securities of the Company to be issued and
sold by the Company from time to time pursuant to Rule 415 under the Act (the
"Debt Securities"). This opinion is being furnished to you for filing as
Exhibit 5.1 to the Registration Statement.
As the basis for the opinion hereinafter expressed, we have examined
(i) the Company's Restated Articles of Incorporation and Bylaws, each as
amended to date, (ii) the Indenture, dated as of March 15, 1995, between the
Company and The First National Bank of Chicago, as trustee, relating to senior
Debt Securities (the "Senior Debt Indenture"), (iii) the form of Indenture to
be executed by the Company and The First National Bank of Chicago, as trustee,
relating to subordinated Debt Securities (the "Subordinated Debt Indenture")
and (iv) the originals, or copies certified or otherwise identified, of
corporate records of the Company, certificates of public officials and of
representatives of the Company, statutes and other instruments and documents as
a basis for the opinions hereinafter expressed. In such examination, we have
assumed the authenticity of all documents submitted to us as originals and the
conformity with the original documents of all documents submitted to us as
copies.
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications set forth herein:
1. With respect to Debt Securities to be issued under the Senior
Debt Indenture, we are of the opinion that the Senior Debt Indenture has been
duly authorized and validly executed and
<PAGE> 2
Union Texas Petroleum Holdings, Inc.
Page 2
delivered by the Company, and that when (i) the Senior Debt Indenture has been
duly qualified under the Trust Indenture Act of 1939, as amended, (ii) the
Board of Directors or the Pricing Committee of the Company (the "Board") has
taken all necessary corporate action to approve the issuance and terms of such
Debt Securities, the terms of the offering thereof and related matters and
(iii) such Debt Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Senior Debt Indenture and
the applicable definitive agency, purchase, underwriting or similar agreement
approved by the Board upon payment (or delivery) of the consideration therefor
provided for therein, such Debt Securities will be legally issued and will
constitute valid and legally binding obligations of the Company, subject to (x)
any applicable bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other law relating to or affecting creditors' rights generally
and (y) general principles of equity.
2. With respect to Debt Securities to be issued under the
Subordinated Debt Indenture, we are of the opinion that, when (i) the
Subordinated Debt Indenture has been duly authorized and validly executed and
delivered by the Company and the trustee, (ii) the Subordinated Debt Indenture
has been duly qualified under the Trust Indenture Act of 1939, as amended,
(iii) the Board has taken all necessary corporate action to approve the
issuance and terms of such Debt Securities, the terms of the offering thereof
and related matters and (iv) such Debt Securities have been duly executed,
authenticated, issued and delivered in accordance with the provisions of the
Subordinated Debt Indenture and the applicable definitive agency, purchase,
underwriting or similar agreement approved by the Board upon payment (or
delivery) of the consideration therefor provided for therein, such Debt
Securities will be legally issued and will constitute valid and legally binding
obligations of the Company, subject to (x) any applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other law
relating to or affecting creditors' rights generally and (y) general principles
of equity.
For the purposes of this opinion, we have assumed that (i) the
Registration Statement and any amendments thereto (including post-effective
amendments) will have become effective, (ii) an appropriate supplement to the
prospectus will have been prepared and filed with the Securities and Exchange
Commission describing the Debt Securities offered thereby, (iii) the Senior
Debt Indenture has been, and the Subordinated Debt Indenture and the Debt
Securities will be, duly authorized, executed and delivered by the trustee,
(iv) all Debt Securities will be issued and sold in compliance with applicable
federal and state securities laws and in the manner stated in the Registration
Statement and the appropriate supplement to the prospectus and (v) a definitive
agency, purchase,
<PAGE> 3
Union Texas Petroleum Holdings, Inc.
Page 3
underwriting or similar agreement with respect to any Debt Securities offered
will have been duly authorized and validly executed and delivered by the
Company and the other parties thereto.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement.
Very truly yours,
ANDREWS & KURTH L.L.P.
<PAGE> 1
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------ -----------------------
1990 1991 1992 1993 1994 1994 1995
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net pretax income................. $ 268,886 $ 447,972 $ 213,206 $ 26,983(1) $ 211,983 $ 154,825 $ 196,494
Fixed charges
Interest expense................ 82,244 88,377 20,261 30,506 28,721 20,363 35,961
Preferred stock dividends of a
subsidiary.................... 11,791 5,934 4,674 1,681 --
Capitalized debt cost........... 2,677 3,044 913 1,536 1,452 1,094 1,106
Interest portion of rent
expenses...................... 6,915 6,201 2,840 2,777 3,170 2,201 2,155
--------- --------- --------- --------- --------- --------- ---------
Total fixed charges...... 103,627 103,556 28,688 36,500 33,343 23,658 39,222
Less: Capitalized interest,
net........................... 13,313 39,852 14,408 4,623 1,464 1,283 3,890
--------- --------- --------- --------- --------- --------- ---------
90,314 63,704 14,280 31,877 31,879 22,375 35,332
Earnings before fixed charges..... $ 359,200 $ 511,676 $ 227,486 $ 58,860 $ 243,862 $ 177,200 $ 231,826
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges......................... 3.47 4.94 7.93 1.61 7.31 7.49 5.91
</TABLE>
- ---------------
(1) During 1993, the Company recorded a non-cash charge to depreciation,
depletion and amortization of $103 million pretax ($48 million after-tax)
for the write-down of its investment in the U.K. North Sea's Piper field.
Excluding the effect of the piper write-down, the ratio of earnings to fixed
charges for 1993 would have been 4.45.
<PAGE> 1
EXHIBIT 15
INDEPENDENT ACCOUNTANTS' AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that Union Texas Petroleum Holdings, Inc. has incorporated by
reference our reports dated April 20, 1995, July 25, 1995 and October 24, 1995
(issued pursuant to the provisions of Statement on Auditing Standards No. 71) in
the prospectus constituting part of its Registration Statement on Form S-3 to be
filed on or about November 7, 1995. We are also aware of our responsibilities
under the Securities Act of 1933.
Yours very truly,
Price Waterhouse LLP
Houston, Texas
November 6, 1995
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 25, 1995 appearing on page 33 of Union Texas Petroleum Holdings, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1994. We also consent
to the references to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Houston, Texas
November 6, 1995
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of Union Texas Petroleum Holdings, Inc. on Form S-3 filed on or about November
7, 1995 of our report dated August 21, 1995, on our audit of the historical
summary of Union Texas Petroleum Holdings, Inc.'s interest in the oil and gas
revenues and direct operating expenses of the property acquired from Oryx U.K.
Energy Company for the year ended December 31, 1994 which report is included in
Amendment No. 1 to Current Report on Form 8-K/A filed October 2, 1995. We also
consent to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Dallas, Texas
November 6, 1995
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ________
____________________________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312)732-6919
(Name, address and telephone number of agent for service)
________________________________________
UNION TEXAS PETROLEUM HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 760040040
(State or other jurisdiction of (I.R.S. employer
incorporation of organization) identification number)
1330 Post Oak Boulevard 77056
Houston, Texas (Zip Code)
(Address of Principal
Executive Offices)
Debt Securities
(Title of Indenture Securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY
TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C., Federal
Deposit Insurance Corporation Washington, D.C., The Board
of Governors of the Federal Reserve System, Washington,
D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now
in effect.*
2. A copy of the certificates of authority of the trustee
to commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable
9. Not Applicable
* EXHIBIT 1,2,3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OF
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 1st day of November, 1995.
The First National Bank of Chicago,
Trustee
By /s/ STEVEN M. WAGNER
__________________________________
Steven M. Wagner
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED BY
SECTION 321(B) OF THE ACT
November 1, 1995
Securities and Exchange Commission,
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of one or more indentures between Union
Texas Petroleum Holdings, Inc., as Issuer, and The First National Bank of
Chicago, as trustee, the undersigned, in accordance with Section 321(b) of the
Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State Authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefore.
Very truly yours,
The First National Bank of Chicago,
Trustee
By: /s/ STEVEN M. WAGNER
___________________________________
Steven M. Wagner
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE> 5
EXHIBIT 7
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
<PAGE> 6
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/95
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
Dollar Amounts in ------------------
Thousands RCFD BIL MIL THOU <-
------------------------ ------- ------------------ -----
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and
coin(1) . . . . . . . . . . . . . . . . . . . . . . 0081 3,184,875 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . 0071 8,932,069 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B,
column A) . . . . . . . . . . . . . . . . . . . . . 1754 249,502 2.a.
b. Available-for-sale securities (from Schedule RC-B,
column D) . . . . . . . . . . . . . . . . . . . . . 1773 536,856 2.b.
3. Federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank
and its Edge and Agreement subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . 0276 2,897,736 3.a.
b. Securities purchased under agreements to resell . 0277 1,417,129 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from
Schedule RC-C) . . . . . . . . . . . . . . . . . . . RCFD 2122 16,567,408 4.a.
b. LESS: Allowance for loan and lease losses . . . . 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . RCFD 3123 358,877 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b
and 4.c) . . . . . . . . . . . . . . . . . . . . . . RCFD 3128 0 2125 16,208,531 4.d.
5. Assets held in trading accounts . . . . . . . . . . 3545 13,486,931 5.
6. Premises and fixed assets (including capitalized
leases) . . . . . . . . . . . . . . . . . . . . . . 2145 516,279 6.
7. Other real estate owned (from Schedule RC-M) . . . . 2150 11,216 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M) . . . . . 2130 12,946 8.
9. Customers' liability to this bank on acceptances
outstanding . . . . . . . . . . . . . . . . . . . . 2155 501,943 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . 2143 111,683 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . 2160 1,258,270 11.
12. Total assets (sum of items 1 through 11) . . . . . . 2170 49,325,966 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 7
Legal Title of Bank: The First National Bank of Chicago Call Date:
06/30/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands BIL MIL THOU
----------------------- ----------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A
and C from Schedule RC-E, part 1) . . . . . . . RCON 2200 14,889,235 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . RCON 6631 5,895,584 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . RCON 6636 8,993,651 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule RC-E,
part II) . . . . . . . . . . . . . . . . . . . . RCFN 2200 13,289,760 13.b.
(1) Noninterest bearing . . . . . . . . . . . . RCFN 6631 315,549 13.b.(1)
(2) Interest-bearing . . . . . . . . . . . . . . RCFN 6636 12,974,211 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . RCFD 0278 2,942,186 14.a.
b. Securities sold under agreements to repurchase . RCFD 0279 1,160,512 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . 112,768 15.a.
b. Trading Liabilities . . . . . . . . . . . . . . RCON 2840 7.872,221 15.b.
RCFD 3548
16. Other borrowed money:
a. With original maturity of one year or less . . . RCFD 2332 2,402,829 16.a.
b. With original maturity of more than one year . RCFD 2333 643,987 16.b.
17. Mortgage indebtedness and obligations under
capitalized leases . . . . . . . . . . . . . . . . RCFD 2910 278,108 17.
18. Bank's liability on acceptance executed and
outstanding . . . . . . . . . . . . . . . . . . . . RCFD 2920 501,943 18.
19. Subordinated notes and debentures . . . . . . . . . RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . RCFD 2930 981,938 20.
21. Total liabilities (sum of items 13 through 20) . . RCFD 2948 46,300,487 21.
22. Limited-Life preferred stock and related surplus . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to
preferred stock) . . . . . . . . . . . . . . . . . RCFD 3839 2,314,642 25.
26. a. Undivided profits and capital reserves . . . . . RCFD 3632 510,093 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities. . . . . . . . . . RCFD 8434 (880) 26.b.
27. Cumulative foreign currency translation
adjustments . . . . . . . . . . . . . . . . . . . . RCFD 3284 766 27.
28. Total equity capital (sum of items 23 through 27) . RCFD 3210 3,025,479 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22 and 28) . . RCFD 3300 49,325,966 29.
Memorandum
To be reported only with the March Report of Condition. * * * * * * * * * * * * * * **
1. Indicate in the box at the right the number of the statement below that best * *
describes the most comprehensive level of auditing work performed for the * Number *
bank by independent external auditors as of any date during 1993 . . . . . . * RCFD 6724 N/A * M.1.
* * * * * * * * * * * * * * **
</TABLE>
1 = Independent audit of the bank conducted in
accordance with generally accepted auditing
standards by a certified public accounting firm
which submits a report on the bank
2 = Independent audit of the bank's parent holding
company conducted in accordance with generally
accepted auditing standards by a certified public
accounting firm which submits a report on the
consolidated holding company (but not on the bank
separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards by a
certified public accounting firm (may be required by state
chartering authority)
4 = Directors' examination of the bank performed by
other external auditors (may be required by state
chartering authority)
5 = Review of the bank's financial statements by
external auditors
6 = Compilation of the bank's financial statements by
external auditors
7 = Other audit procedures (excluding tax preparation
work)
8 = No external audit work
__________________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
