AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 23, 1997.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BASIN EXPLORATION, INC.
(Exact names of registrants as specified in charters)
DELAWARE 84-1143307
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
370 SEVENTEENTH STREET, SUITE 3400
DENVER, COLORADO 80202
(303) 685-8000
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
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HOWARD L. BOIGON, ESQ.
VICE PRESIDENT - GENERAL COUNSEL AND SECRETARY
370 SEVENTEENTH STREET, SUITE 3400
DENVER, COLORADO 80202
(303) 685-8000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPY TO:
PAUL HILTON, ESQ.
DAVIS, GRAHAM & STUBBS LLP
370 SEVENTEENTH STREET, SUITE 4700
DENVER, COLORADO 80202
(303) 892-9400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFERING: FROM TIME TO TIME
AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, AS DETERMINED BY THE
REGISTRANT.
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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, please 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. / /
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<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
Proposed Proposed
Amount maximum maximum
Title of each class of to be offering price aggregate Amount of
securities to be registered registered(1) per unit(2) offering price(1)(3) registration fee(3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(4)
Common Stock, par value
$.01 per share(5)(6) $200,000,000 100% $200,000,000 $60,607
Preferred Stock, par value
$.01 per share(7)
Warrants(8)
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</TABLE>
(1) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or currency units or composite currencies, including the European Currency
Unit.
(2) The proposed maximum initial offering price per unit will be determined,
from time to time, by the Registrant.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). In no event will the aggregate initial offering
price of all securities issued from time to time pursuant to this
Registration Statement exceed $200,000,000.
(4) Subject to Footnote (3), there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time by the Registrant. If any such Debt Securities are 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 of
up to $200,000,000. There are also being registered hereunder an
indeterminate principal amount of Debt Securities as may be issuable upon
exercise of Warrants registered hereby. Included in the shares of Common
Stock registered hereunder are shares owned by a selling stockholder. See
"Selling Stockholder."
(5) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of shares of Common Stock as may be sold from time to
time by the Registrant. There are also being registered hereunder an
indeterminate number of shares of Common Stock as may be issuable upon
conversion of the Debt Securities, Preferred Stock or exercise of Warrants
registered hereby.
(6) This Registration Statement also applies to rights under the Company's
Stockholders' Rights Plan, which are attached to and tradeable only with
the Common Stock registered hereby. No registration fees are required for
such rights and the shares underlying such rights as they will be issued
for no additional consideration.
(7) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold from time
to time by the Registrant. There are also being registered hereunder an
indeterminate number of shares of Preferred Stock of the Registrant as may
be issuable upon the conversion of Debt Securities or the exercise of
Warrants registered hereby.
(8) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of Warrants to purchase Debt Securities, Common Stock
or Preferred Stock as may be sold from time to time by the Registrant.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
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 State.
SUBJECT TO COMPLETION, DATED , 1997
PROSPECTUS
$200,000,000
BASIN EXPLORATION, INC. [LOGO]
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
Basin Exploration, Inc. (the "Company" or "Basin") may offer from time to
time (i) debt securities ("Debt Securities"), consisting of debentures, notes,
bonds and/or other unsecured evidences of indebtedness in one or more series,
(ii) shares of the Company's common stock, $.01 par value ("Common Stock"),
(iii) shares of preferred stock, $.01 par value ("Preferred Stock"), in one or
more series, or (iv) warrants to purchase Debt Securities, Preferred Stock or
Common Stock. The foregoing securities are collectively referred to as the
"Securities." Any Securities may be offered with other Securities or separately.
The Securities will be offered at an aggregate initial offering price not to
exceed US $200,000,000 or the equivalent (based on the applicable exchange rate
at the time of sale), if Debt Securities of the Company are issued in principal
amounts denominated in one or more foreign currencies or currency units as shall
be designated by the Company at prices and on terms to be determined at the time
of sale.
SEE "RISK FACTORS" FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE
SECURITIES.
This Prospectus will be supplemented by one or more accompanying Prospectus
Supplements, which will set forth with regard to the particular Securities in
respect of which this Prospectus is being delivered (i) in the case of Debt
Securities, the title; aggregate principal amount; currency of denomination
(which may be in U.S. dollars, in any other currency, currencies or currency
unit, including the European Currency Unit); maturity; interest rate, if any
(which may be fixed or variable), or method of calculation thereof; time of
payment of any interest; form of payment of any interest whether in the form of
cash, additional Debt Securities, Common Stock or some combination thereof; any
terms for redemption at the option of the Company or the holder; any terms for
sinking fund payments; any index or other method used to determine the amounts
payable; the ranking of such Debt Securities (whether senior, senior
subordinated or subordinated); any conversion or exchange rights, at the option
of the Company or the holder; any listing on a securities exchange; the initial
public offering price and any other terms in connection with the offering and
sale of such Debt Securities; (ii) in the case of Common Stock, the number of
shares of Common Stock, the terms of the offering thereof and information
regarding the selling stockholder, if any; (iii) in the case of Preferred
Stock, the designation, stated value and liquidation preference per share; the
initial public offering price per share and the number of shares to be offered;
dividend rate (or method of calculation); dates on which dividends shall be
payable and dates from which dividends shall accrue; any redemption or sinking
fund provisions; any conversion or exchange rights; any listing of the Preferred
Stock on a securities exchange; and any other terms in connection with the
offering and sale of such Preferred Stock; and (iv) in the case of Warrants, the
number and terms thereof, the designation and the number of Securities issuable
upon their exercise; the exercise price; any listing of the Warrants or the
underlying Securities on a securities exchange and any other terms in connection
with the offering, sale and exercise of the Warrants. The Prospectus Supplement
will also contain information, as applicable, about certain United States
federal income tax considerations relating to the Securities in respect of which
this Prospectus is being delivered.
The Company's Common Stock is quoted on the Nasdaq National Market (Symbol:
"BSNX"). Each Prospectus Supplement will indicate if the Securities offered
thereby will be quoted on any market or listed on any securities exchange.
The Company may sell Securities to or through one or more underwriters, and
may also sell Securities directly to other purchasers or through agents. See
"Plan of Distribution." Each Prospectus Supplement will set forth the names of
any underwriters, dealers or agents involved in the sale of the Securities in
respect of which this Prospectus is being delivered, and any applicable fee,
commission or discount arrangements with them.
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.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
The date of this Prospectus is September , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company 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"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the following Regional
Offices: 7 World Trade Center, Suite 1300, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Commission by mail at
prescribed rates. Requests should be directed to the Commission's Public
Reference Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549. The Commission also maintains a website at
http://www.sec.gov that contains reports, proxy statements, and other
information. The Company's Common Stock is quoted on the Nasdaq National Market.
Reports, proxy and information statements and other information relating to the
Company can be inspected at the offices of the Nasdaq Stock Market, Inc., 1735 K
Street, Washington, D.C., 20006.
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 (the "Securities
Act") with respect to the Securities offered by this Prospectus. This
Prospectus, which forms part of the Registration Statement, does not contain all
of the information set forth in the Registration Statement, certain parts of
which have been omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
Securities, reference is hereby made to such Registration Statement, including
the exhibits filed therewith. The Registration Statement and the exhibits
thereto can be obtained by mail from or inspected and copied at the public
reference facilities maintained by the Commission as described in the prior
paragraph.
The Company distributes to its stockholders annual reports containing
audited consolidated financial statements and quarterly reports containing
unaudited financial information for the first three quarters of each year.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
(1) Annual Report on Form 10-K for the year ended December 31, 1996, filed
with the Commission on March 31, 1997;
(2) Amendment to Annual Report on Form 10-K for the year ended December
31, 1996 on Form 10-K/A-1, filed with the Commission on June 5, 1997;
(3) Quarterly Report on Form 10-Q for the period ended March 31, 1997,
filed with the Commission on May 15, 1997;
(4) Quarterly Report on Form 10-Q for the period ended June 30, 1997,
filed with the Commission on August 12, 1997;
(5) Registration Statement on Form 8-A filed with the Commission on
February 27, 1996, relating to the Company's Stockholders' Rights
Plan;
(6) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated April 24, 1992, filed with
the Commission on April 27, 1992.
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<PAGE>
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Securities offered hereby 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 incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document, which also is or is deemed to be
incorporated by reference herein or in any Prospectus Supplement, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the oral or written request of such person, a
copy of any or all of the documents incorporated herein by reference (other than
exhibits, unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to the Secretary,
370 Seventeenth Street, Suite 3400, Denver, Colorado 80202, telephone: (303)
685-8000, facsimile: (303) 685-8010.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes and incorporates by reference statements that are
not purely historical and are "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements, other than statements of historical facts, included or incorporated
by reference in this Prospectus, involve risks and uncertainties that could
cause actual results to differ from projected results. Such statements address
activities, events or developments that the Company expects, believes, projects,
intends or anticipates will or may occur, including such matters as future
capital, development and exploration expenditures (including the amount and
nature thereof), drilling of wells, future production of oil and gas, business
strategies, cash flow and anticipated liquidity, prospect development and
property acquisition, or marketing of oil and gas. Factors that could cause
actual results to differ materially ("Cautionary Disclosures") include, among
others: general economic conditions, the market price of oil and natural gas,
the risks associated with exploration, the Company's ability to find, acquire,
market, develop and produce new properties, operating hazards attendant to the
oil and natural gas business, downhole drilling and completion risks that are
generally not recoverable from third parties or insurance, concentration of the
Company's production in a small number of properties in the Gulf of Mexico,
uncertainties in the estimation of proved reserves and in the projection of
future rates of production and timing of development expenditures, potential
mechanical failure of individually significant productive wells, the strength
and financial resources of the Company's competitors, the Company's ability to
find and retain skilled personnel, climatic conditions, labor relations,
availability and cost of material and equipment, delays in anticipated start-up
dates, environmental risks, the results of financing efforts, actions or
inactions of third-party operators of the Company's properties, regulatory
developments, and other factors described in this Prospectus and in any
Prospectus Supplement and in the Company's annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K filed with the
Commission. Many of such factors are beyond the Company's ability to control or
predict. All forward-looking statements included or incorporated by reference in
this Prospectus are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update such forward-looking
statements as a result of new information, future events or otherwise. Although
the Company believes that the assumptions and expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct or that the Company will take any
actions that may presently be planned. Prospective investors are cautioned not
to put undue reliance on forward- looking statements. Certain important factors
that could cause actual results to differ materially from the Company's
expectations are disclosed under "Risk Factors" and elsewhere in this
Prospectus. All written and oral forward- looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Disclosures.
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<PAGE>
RISK FACTORS
Prospective purchasers of the Securities should carefully read this
Prospectus, any Prospectus Supplement delivered herewith, and the documents
incorporated by reference herein and therein. Ownership of Securities involves
certain risks. In determining whether to purchase the Securities, prospective
investors should consider carefully the following risk factors and the other
information contained in this Prospectus, in addition to the other risk factors
and information set forth in any Prospectus Supplement delivered herewith.
OIL AND GAS PRICES; HEDGING
Basin's revenues and profitability are substantially dependent upon
prevailing prices for oil, gas and natural gas liquids. For much of the past
decade, the markets for oil and natural gas have been extremely volatile. The
Company anticipates that such markets will continue to be volatile in the
foreseeable future. In general, future prices of oil, gas and natural gas
liquids are dependent upon numerous external factors such as various economic,
political and regulatory developments and competition from other sources of
energy. The unsettled nature of the energy market and the unpredictability of
worldwide political developments, including, for example, actions of OPEC
members, make it particularly difficult to estimate future prices of oil, gas
and natural gas liquids. Any significant decline in the price of oil, gas or
natural gas liquids for an extended period would have a material adverse effect
on the Company's financial condition and results of operations, and would, under
certain circumstances, result in a reduction in funds available under the
Company's bank credit facilities and impair access to other sources of capital.
From time to time, as conditions are deemed to warrant, the Company enters
into energy price swap arrangements to reduce its sensitivity to oil and gas
price volatility. Such arrangements are subject to a number of risks. If the
Company's reserves are not produced at the rates estimated by the Company due to
inaccuracies in the reserve estimation process, operational difficulties or
regulatory limitations, the Company would be required to satisfy its obligations
under hedging contracts on potentially unfavorable terms without the ability to
hedge that risk through sales of comparable quantities of its own production.
Further, the terms under which the Company enters into hedging contracts are
based on assumptions and estimates of numerous factors such as cost of
production and pipeline and other transportation costs to delivery points. Under
financial instrument contracts, the Company may also be at risk for basis
differential, which is the difference in the quoted financial price for contract
settlement and the actual price received at the physical point of delivery.
Substantial variations between the assumptions and estimates used by the Company
and actual results experienced could materially adversely affect the Company's
anticipated profit margins and its ability to manage the risk associated with
fluctuations in oil and gas prices. In addition, hedging contracts are subject
to the risk that the other party may prove unable or unwilling to perform its
obligations under such contracts. Any significant nonperformance could have a
material adverse financial effect on the Company. Furthermore, hedging contracts
limit the benefits the Company would realize if actual prices rise above the
contract prices.
REPLACEMENT OF RESERVES
Basin's future success depends upon its ability to find, develop and/or
acquire additional oil and gas reserves at prices that permit profitable
operations. Except to the extent that Basin conducts successful development,
exploitation or exploration activities or acquires properties containing proved
reserves, the proved reserves of Basin will decline. The rate of decline depends
upon reservoir characteristics and varies from the steep decline rate
characteristic of Gulf of Mexico reservoirs, where Basin has most of its
production, to the relatively slow decline rate characteristic of the long-lived
fields in the Rocky Mountain region, where the Company's other properties are
located. The market for acquiring proved reserves is extremely competitive, and
the Company may not be able to buy reserves for development and exploitation at
prices it considers to be reasonable or within its budgets. The cost of
drilling, completing and operating wells may vary significantly from initial
estimates. Basin's drilling operations may be unsuccessful or may be curtailed,
delayed or canceled as a result of numerous factors not within Basin's control,
including but not limited to title problems, weather conditions, compliance with
governmental requirements,
-4-
<PAGE>
shortage of capital, mechanical difficulties and shortages or delays in the
delivery of drilling rigs or other equipment. Accordingly, there can be no
assurance that Basin's acquisition, development, exploitation and exploration
activities will result in reserves added at acceptable costs.
ACQUISITION RISKS
Acquisitions of producing oil and gas properties have been a key element of
Basin's success, and Basin will continue to seek acquisitions in the future.
Even though Basin performs a review of the properties in connection with its
acquisitions which it believes is consistent with industry practices, such
reviews are inherently incomplete, and the evaluations resulting therefrom are
necessarily inexact and uncertain. It is generally not feasible to review in
depth every property and all records in connection with an acquisition of many
properties, particularly when the seller does not operate the property.
Ordinarily Basin will focus its due diligence efforts on the higher valued
properties and will spot-check the remainder. However, even an in-depth review
of properties and records may not necessarily reveal existing or potential
problems nor will it permit a buyer to become familiar enough with the
properties to assess fully their deficiencies and capabilities. Inspections may
not be performed on every well, and environmental problems, such as groundwater
contamination, are not necessarily observable even when an inspection is
undertaken. Contractual indemnities may not be obtainable, and the Company may
be required to assume the risk of the physical condition of the properties in
addition to the risk that the properties may not perform in accordance with the
Company's expectations.
EXPLORATION RISKS
With the sale of its D-J Basin properties in 1996, and its initiation of
exploration activities in the Gulf of Mexico, the Company currently is spending
a large portion of its capital budget on exploration. Exploration activities
involve substantially more risk than development or exploitation activities.
Although the Company believes that its use of 3-D seismic data and other
advanced technologies should increase the probability of success of its
exploratory wells and should reduce average finding costs through elimination of
prospects that might otherwise be drilled solely on the basis of 2-D seismic
data and other traditional methods, exploratory drilling remains a speculative
activity. Even when fully utilized and properly interpreted, 3-D seismic data
and visualization techniques only assist geoscientists in identifying subsurface
structures and hydrocarbon indicators and do not conclusively allow the
interpreter to know if hydrocarbons will in fact be present in such structures.
In addition, the use of 3-D seismic data and such technologies requires greater
predrilling expenditures than traditional drilling strategies and the Company
could incur losses as a result of such expenditures. Failure of the Company's
exploration activities would have a material adverse effect on the Company's
future results of operations and financial condition. The Company had conducted
no previous operations in the Gulf of Mexico prior to the opening of its
regional office in late 1995 in Houston, Texas. This operating area is highly
competitive and the Company's success in its activities there will depend on its
ability to attract and retain geoscientists and other professional staff with
extensive experience operating in the area. The Company's Houston office
currently has a staff that includes seven geoscientists and petroleum engineers
plus 3 engineering consultants, all of whom are experienced in Gulf Coast
operations. Loss of these experienced personnel could have a material adverse
impact on the Company's ability to compete in this area.
FUTURE CAPITAL REQUIREMENTS
The Company will require substantial additional capital to further develop
and explore its properties and to acquire additional properties. Cash flows from
operations, to the extent available, will be used to fund these expenditures.
The Company may seek additional capital from traditional reserve base
borrowings, equity and debt offerings, joint ventures, and/or production payment
financing. The Company's ability to access additional capital will depend
significantly on its continued success in exploring for and developing its
reserves and the status of the capital markets at the time such capital is
sought. Accordingly, there can be no assurance that capital will be available to
the Company from any source or that, if available, it will be on terms
acceptable to the Company.
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<PAGE>
Should sufficient capital not be available, the development and exploration of
the Company's properties could be delayed and, accordingly, the implementation
of the Company's business strategy would be adversely affected.
MARKETING OF PRODUCTION; SEASONALITY
The marketability of Basin's production depends upon the availability and
capacity of gathering systems and pipelines, the effect of federal and state
regulation of such production and transportation, general economic conditions,
supply of and demand for oil and natural gas, all of which could adversely
affect Basin's ability to market its production. Demand for natural gas is
highly seasonal, with demand generally higher in the colder winter months and in
the hot summer months. As a result, the price received for spot market natural
gas may vary significantly between seasonal periods. To date, the Company
generally has been able to sell its available spot market natural gas at
prevailing spot market prices, such that volumes sold have not materially
fluctuated seasonally. There is no assurance, however, that the Company will be
able to continue to achieve this result.
CONCENTRATION OF VALUE
As of the date of this Prospectus, a significant portion of Basin's
production is concentrated in two wells on one platform in the Gulf of Mexico.
If mechanical problems, storms, or other events that caused curtailment or
cessation of such production were to occur, Basin's cash flow would be
materially adversely affected. The Company will remain vulnerable to a
disproportionate impact of delays or interruptions of production from these
wells until it develops a more diversified production base including additional
properties.
ESTIMATES OF RESERVES AND RELATED DATA
Numerous uncertainties are inherent in estimating quantities of proved
reserves and in projecting future rates of production and timing of development
expenditures, including many factors beyond the control of the producer. The
reserve data set forth in this Prospectus or incorporated herein by reference
represents only estimates based on available geological, geophysical, production
and engineering data, the extent, quality and reliability of which vary. Oil and
gas reserve engineering is a subjective process of estimating accumulations of
oil and gas that cannot be measured in an exact manner, and estimates of other
engineers might differ materially from those shown. The accuracy of any reserve
estimate is a function of the quality and quantity of available data,
engineering and geological interpretation and judgment. In addition, the
estimates of future net cash flow from proved reserves of the Company and the
present value thereof are based upon certain assumptions about future production
levels, prices, costs and participation, if any, by third parties in the
development of the Company's reserves that may not prove correct over time, for
reasons which may or may not be under the control of or known to the Company.
Any significant variance from these assumptions could materially affect the
quantity and value of the Company's reserves as compared to the estimates
contained in this Prospectus.
Fluctuations in Quarterly Results
Basin's quarterly results of operations may fluctuate significantly as a
result of variations in oil and gas prices and variations in the Company's
drilling activities. Drilling activities can be affected by a number of factors
including the need to utilize capital for new acquisitions, availability of
permits for drilling or recompletions, weather, seasonal restrictions (such as
growing crops and winter game restrictions), governmental regulations and
available cash flow.
OPERATING HAZARDS
The oil and gas business involves a variety of operating risks, including
the risk of fire, explosion, blowout, pipe failure, casing collapse, stuck
tools, abnormally pressured formations and environmental hazards such as oil
spills, gas leaks, pipeline ruptures and discharges of toxic gases, the
occurrence of any of which could result in substantial losses to Basin due to
injury and loss of life, loss of or damage to wellbores and/or drilling or
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<PAGE>
production equipment, costs of overcoming downhole problems, severe damage to
and destruction of property, natural resources and equipment, pollution and
other environmental damage, clean-up responsibilities, regulatory investigation
and penalties and suspension of operations. Gathering systems and processing
facilities are subject to many of the same hazards and any significant problems
related to those facilities could adversely affect Basin's ability to market its
production. Moreover, offshore operations are subject to a variety of operating
risks peculiar to the marine environment, such as hurricanes or other adverse
weather conditions. Basin maintains insurance against some, but not all,
potential risks; however, there can be no assurance that such insurance will be
adequate to cover any losses or exposure for liability. Insurance may not cover
downhole operating risks, such as the costs of retrieving stuck equipment.
Furthermore, Basin cannot predict whether insurance will continue to be
available at premium levels that justify its purchase or whether insurance will
be available at all to cover the risks faced by the Company.
ENVIRONMENTAL REGULATION
The drilling for and production, handling, transportation and disposal of
oil and gas and by-products are subject to extensive regulation under federal,
state and local environmental laws. In most instances, the applicable regulatory
requirements relate to water and air pollution control and solid waste
management measures, permitting requirements, or restrictions on operations in
environmentally sensitive areas, such as coastal zones, wetlands, and wildlife
habitat. Environmental assessments have not been performed on all of Basin's
properties. To date, expenditures for environmental control facilities and for
remediation have not been significant in relation to the results of operations
of Basin. Basin believes, however, that the trend toward stricter standards in
environmental legislation and regulation is likely to continue. Offshore
operations are subject to more extensive governmental regulation, including
regulation that may, in certain circumstances, impose absolute liability for
environmental damage and allow interruption or termination of business
activities by government authorities based on environmental or other
considerations. The Oil Pollution Act of 1990 (the "OPA") also requires proof of
financial responsibility to cover costs of potential oil spills; the amount of
such required coverage ranges from $35 million to $150 million based on federal
risk assessment. From time to time, legislation has been introduced in Congress
which would reclassify oil and gas production wastes as "hazardous waste" under
the Resource Conservation and Recovery Act. If such legislation were to pass, it
could have a significant adverse impact on the operating costs of Basin, as well
as the oil and gas industry in general. Initiatives regulating the disposal of
exploration and production waste are also pending or have been enacted in
certain states, including states in which Basin conducts operations, and these
various initiatives could have a similar impact on the Company.
GOVERNMENTAL REGULATION
Development, production and sale of oil and gas are subject to extensive
federal, state and local governmental regulation which may be changed from time
to time in response to economic or political conditions. Matters subject to
regulation include, but are not limited to, permits for drilling operations,
drilling, plugging and reclamation bonds, operational practices and reporting,
the spacing of wells, unitization and pooling of properties, taxation and
environmental protection. The Minerals Management Service of the United States
Department of the Interior ("MMS") has proposed regulations for valuation of
crude oil and natural gas produced from federal leases, including offshore
leases, that could require payment of royalties on the basis of indices or
benchmarks that may not reflect actual prices received by the Company for its
production. The Federal Energy Regulatory Commission has promulgated major
regulatory initiatives over the past several years which have had a significant
impact on natural gas pricing and natural gas pipeline operations, services and
rates. Those changes have significantly altered the marketing of natural gas.
Although the purpose of these changes is generally to enhance competition in
natural gas marketing, the effect of these changes on the Company's ability to
market its gas at reasonable prices from any given property is uncertain. From
time to time, regulatory agencies have imposed price controls and limitations on
production by restricting the rate of flow of oil and gas wells below actual
production capacity in order to conserve supplies of oil and gas. Under the
Outer Continental Shelf Lands Act ("OCSLA") the MMS regulates development and
production of oil and gas in federal waters in the Gulf of Mexico and may
suspend or terminate operations for violation of MMS rules. Any such suspension
or termination could materially and adversely affect
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the Company's financial condition and operations. There are many legislative
proposals pending in Congress and in the legislatures of various states that, if
enacted, might significantly affect the oil and gas industry. Basin is not able
to predict what will be enacted and thus what effect, if any, such proposals
would have on Basin.
COMPETITION
Competition in the oil and gas industry is intense, particularly with
respect to the acquisition of producing properties and proved undeveloped
acreage and the acquisition of interests in offshore exploration prospects in
the Gulf of Mexico. Major and independent oil and gas companies, as well as
individuals and drilling programs, actively bid for desirable oil and gas
properties, as well as for the equipment and labor required to operate and
develop such properties. A number of Basin's competitors have financial
resources and exploration and development budgets that are substantially greater
than those of Basin, which may adversely affect the Company's ability to compete
successfully. In addition, many of the Company's larger competitors may be
better able to respond to factors that affect the demand for oil and natural gas
production such as changes in worldwide oil and natural gas prices and levels of
production, the cost and availability of alternative fuels, and the application
of government regulations. The Company commenced operations in the Gulf of
Mexico area during 1996, where it had not previously been active. Competition
from major and large independent oil and gas companies is significantly greater
in this area than in the Rocky Mountain region, where the Company had conducted
all of its previous operations.
PRINCIPAL STOCKHOLDER
Basin's principal stockholder, Michael S. Smith, together with members of
his immediate family and trustees for their benefit, beneficially own
approximately 30% of Basin's outstanding shares. As a result, Mr. Smith is in a
position to substantially influence the outcome of stockholder votes on the
election of directors and other matters. In addition, if Mr. Smith were to sell
a significant number of his shares, the prevailing market price of the Common
Stock could be adversely affected.
DEPENDENCE ON KEY PERSONNEL
Basin depends to a large extent on the services of its founder and CEO,
Michael Smith and certain other senior management personnel. The loss of the
services of Mr. Smith or other key personnel could have a potential adverse
effect on Basin's operations.
ANTI-TAKEOVER PROVISIONS
Basin's Restated Certificate of Incorporation and Bylaws and the provisions
of the Delaware General Corporation Law make it more difficult to change control
of Basin and replace incumbent management. The Company adopted a Stockholders'
Rights Plan in 1996, pursuant to which holders of Common Stock of the Company
received rights which are exercisable if a person or group of affiliated persons
acquires 15% of the Company's outstanding Common Stock or commences a tender or
exchange offer, the consummation of which would result in ownership of 15% or
more of the Company's outstanding Common Stock. See "Description of Capital
Stock--Stockholders' Rights Plan." In addition, the Company has entered into
agreements with certain of its executive officers which would require additional
payments by the Company if such officers' employment were terminated upon a
change of control.
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THE COMPANY
GENERAL
Basin Exploration, Inc. ("Basin" or the "Company") is an independent oil
and gas exploration and production company operating in the United States. The
Company's business objective is to efficiently increase its proved oil and gas
reserves in order to grow production, cash flow, and earnings per share. The
Company seeks to accomplish this by exploring for new oil and gas reserves and
acquiring proved properties with exploitation or development potential,
utilizing advanced technologies.
The Company currently conducts exploration activities exclusively in the
shallow waters of the Gulf of Mexico, offshore Louisiana and Texas. Basin seeks
acquisition opportunities both in the vicinity of the Company's exploration
activities offshore and in certain geographic areas onshore where the Company's
staff has had extensive experience, including the Rocky Mountains and onshore
Gulf Coast areas.
Basin's reserves are located primarily in the Gulf of Mexico and in the
Powder River and Green River Basins in Wyoming. At December 31, 1996, the
Company's estimated proved reserves totaled approximately 7.9 MMBbl and 29.7 Bcf
of natural gas, or 76.9 Bcfe. Most of Basin's proved oil and gas reserves are
attributable to Company-operated properties. A significant portion of Basin's
reserves at the beginning of 1996 were located in the Denver-Julesburg ("D-J")
Basin in eastern Colorado, but such reserves were sold in 1996 to provide funds
for other operations, including initiation of operations in the Gulf of Mexico.
Since commencing operations in the Gulf of Mexico in 1996, the Company has
participated in drilling ten wells, of which five have been or are expected to
be completed as producers. The Company has operated all but one of these wells,
with an average working interest at the time of drilling of approximately 51%.
Five of the ten wells drilled to date have been drilled since July 1, 1997,
reflecting a recent acceleration in activity after a start-up period during
which the Company assembled its initial prospect inventory. As of the date of
this Prospectus, the Company has assembled a Gulf of Mexico leasehold inventory
of 96,421 gross acres, comprising 63,248 net acres, with more than 20 identified
potential exploration prospects, all of which are supported by the Company's
interpretations of three-dimensional ("3-D") seismic data. In order to reduce
the risks and costs for acreage, drilling and completion operations, the Company
uses 3-D seismic and computer-aided exploration and exploitation technology in
virtually all of its activities in the Gulf of Mexico. The Company has also
closed acquisitions of Gulf of Mexico proved properties totaling more than $18
million in 1997 through the date of this Prospectus.
Two of the Gulf of Mexico wells that the Company has completed, both
located on Eugene Island Block 65, commenced production in August 1997 and now
account for a substantial portion of the Company's total oil and gas production.
The three other drilled wells that the Company anticipates will commence
production, plus an additional Gulf of Mexico well in which the Company acquired
an interest after it was drilled and completed, are temporarily suspended
pending additional development. Three of these wells, one each on East Cameron
Block 378, Eugene Island Block 83, and West Cameron Block 56, are expected to
commence production shortly before or during the first quarter of 1998.
The Company's onshore oil and gas assets are comprised of properties that
generally have a relatively stable, long-lived production profile. The Company
has identified potential for additional drilling, well deepenings, or secondary
recovery on several of the more valuable properties. The Company intends to
continue to exploit, and to pursue acquisitions to expand, this asset base.
The Company currently has a capital budget established for 1997 of
approximately $60 million, allocated approximately equally to exploration
activities, development, and acquisitions that have already been consummated.
This budget could be increased for additional acquisitions or for development of
additional exploratory discoveries. The 1997 capital budget represents a
significant increase from capital expenditures on oil and gas properties in 1996
and 1995 of approximately $23 million and $16 million, respectively.
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HISTORY
Basin commenced operations in 1981 and completed an initial public offering
of its common stock in 1992. From its inception through 1991, the Company
primarily acquired, developed and exploited properties in the D-J Basin. Such
operations were expanded into other areas within the Rocky Mountain region in
1992, and the Company initiated Rocky Mountain exploration activities in 1993.
By December 31, 1994, the Company's estimated proved oil and gas reserves had
grown to 247.2 Bcfe, of which 169.2 Bcfe, or 68.4%, were located in the D-J
Basin.
From 1992 through 1994, the D-J Basin was one of the most active drilling
areas in the United States and the Company was one of the more active and
successful operators in the area. As the basin became increasingly exploited,
however, it was the Company's assessment and experience that the number and
quality of development projects in the area significantly diminished.
During 1995, the Company's capital expenditures on oil and gas properties
declined to $16 million, from $67 million the year before, and its estimated
proved oil and gas reserves declined to 207.1 Bcfe at year-end. Principal
factors contributing to these reductions included: (i) a smaller and
lower-quality inventory of D-J Basin exploitation projects; (ii) insufficient
success in identifying acquisition opportunities and viable exploration plays in
the Company's other Rocky Mountain focus areas; and (iii) liquidity constraints
caused largely by the Company's higher debt levels.
In direct response to these developments, the Company implemented a
significant redirection of its business strategy and operations between
late-1995 and mid-1996, including: (i) the addition of new financial, technical
and business development members to its senior management; (ii) the sale of the
Company's D-J Basin assets, including approximately 70% of the Company's
estimated proved reserves, for $123.5 million; (iii) establishment of a
Houston-based Gulf of Mexico exploration team through the hiring of senior
geoscientists and petroleum engineers with substantial experience operating in
the shallow waters of the Gulf of Mexico; and (iv) a substantial reduction in
corporate general and administrative overhead.
Since the redirection of its business, the Company has significantly
increased its proved reserves and production base through Gulf of Mexico
drilling activity and acquisitions, and it has established a sizable inventory
of Gulf of Mexico leaseholds and prospects for future exploratory drilling.
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USE OF PROCEEDS
Unless a Prospectus Supplement indicates otherwise, the net proceeds to be
received by the Company from the sale of the Securities will be used for
repayment of indebtedness, to finance the Company's operations, for the
continued development of its oil and gas properties and for other general
corporate purposes. Pending such application, such net proceeds may be invested
in short-term marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company was as follows for
the years ended December 31, 1996, 1995, 1994, 1993 and 1992:
YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994 1993 1992
Ratio of earnings to fixed ---- ---- ---- ---- ----
charges (unaudited).................. 9.6 (a) 2.6 3.5 3.2
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(a) Earnings did not cover fixed charges in 1995 by $27.3 million.
As used in the above calculations, "earnings" means earnings before income
taxes and fixed charges, and "fixed charges" means interest on all indebtedness,
that portion of rental expense that management believes to be representative of
interest expense and capitalized interest.
DESCRIPTION OF DEBT SECURITIES
Debt Securities may be issued from time to time in one or more series by
the Company. The Debt Securities will constitute either indebtedness designated
as Senior Indebtedness ("Senior Debt Securities"), indebtedness designated as
Senior Subordinated Indebtedness ("Senior Subordinated Debt Securities") or
indebtedness designated as Subordinated Indebtedness ("Subordinated Debt
Securities"). The particular terms of each series of Debt Securities offered by
a particular Prospectus Supplement will be described therein. Senior Debt
Securities, Senior Subordinated Debt Securities and Subordinated Debt Securities
will each be issued under a separate indenture (individually an "Indenture" and
collectively the "Indentures") to be entered into prior to the issuance of such
Debt Securities. The Indentures will be substantially identical, except for
provisions relating to subordination. See "Subordination of Senior Subordinated
Debt Securities and Subordinated Debt Securities." A copy of the form of the
Indenture is filed as an Exhibit to the Registration Statement of which this
Prospectus is a part. There will be a separate Trustee (individually a "Trustee"
and collectively the "Trustees") under each Indenture. Information regarding the
Trustee under an Indenture will be included in any Prospectus Supplement
relating to the Debt Securities issued thereunder.
The following discussion includes a summary description of the material
terms of the Indentures, other than terms which are specific to a particular
series of Debt Securities and which will be described in the Prospectus
Supplement relating to such series. The following summaries do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Indentures, including the definitions therein
of certain terms capitalized in this Prospectus. Wherever particular Sections,
Articles or defined terms of the Indentures are referred to herein or in a
Prospectus Supplement, such Sections, Articles or defined terms are incorporated
herein or therein by reference.
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GENERAL
The Debt Securities will be general unsecured obligations of the Company.
The Indentures do not limit the aggregate amount of Debt Securities which may be
issued thereunder, and Debt Securities may be issued thereunder from time to
time in separate series up to the aggregate amount from time to time authorized
for each series. Debt Securities of a series may be issuable in registered form
without coupons ("Registered Debt Securities"), in bearer form with or without
coupons attached ("Bearer Debt Securities") or in the form of one or more global
Securities in registered or bearer form (each, a "Global Security"). Bearer Debt
Securities, if any, will be offered only to non-United States persons and to
offices located outside the United States of certain United States financial
institutions.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of such Debt Securities;
(2) any limit on the aggregate principal amount of such Debt Securities; (3)
whether such Debt Securities will be issued as Registered Debt Securities,
Bearer Debt Securities or any combination thereof, and any limitation on
issuance of such Bearer Debt Securities and any provisions regarding the
transfer or exchange of such Bearer Debt Securities, including exchange for
Registered Debt Securities of the same series; (4) whether any of such Debt
Securities are to be issuable in permanent global form and, if so, the terms and
conditions, if any, upon which interests in such Debt Securities in global form
may be exchanged, in whole or in part, for the individual Debt Securities
represented thereby; (5) the person to whom any interest on any Debt Security of
the series shall be payable, if other than the person in whose name the Debt
Security is registered on the Regular Record Date; (6) the date or dates on
which such Debt Securities will mature; (7) the rate or rates of interest, if
any, or the method of calculation thereof, which such Debt Securities will bear,
and the basis upon which interest will be calculated if other than that of a
360-day year of twelve 30-day months; (8) the date or dates from which any such
interest will accrue, the Interest Payment Dates on which any such interest on
such Debt Securities will be payable, the Regular Record Date for any interest
payable on any Interest Payment Date and any provision for the deferral of
interest payments; (9) whether any such interest will be payable in cash,
through the issuance of additional Debt Securities, through the issuance of
Common Stock, through some combination of cash and additional Debt Securities or
through some combination of cash and Common Stock; (10) the place or places
where the principal of, premium, if any, and interest on such Debt Securities
will be payable; (11) the period or periods within which, the events upon the
occurrence of which, and the price or prices at which, such Debt Securities may,
pursuant to any optional or mandatory provisions, be redeemed or purchased, in
whole or in part, by the Company and any terms and conditions relevant thereto;
(12) the obligations of the Company, if any, to redeem or repurchase such Debt
Securities pursuant to any sinking fund or analogous provisions or at the option
of the Holders thereof; (13) the denominations in which any such Debt Securities
will be issuable, if other than denominations of US $1,000 and any integral
multiple thereof; (14) the units of payment of principal of, premium, if any,
and interest on such Debt Securities if other than US dollars, which units may
consist of currency, currencies, currency unit or units, or securities; (15) any
index or formula to be used to determine the amount of payments of principal,
premium, if any, and interest on such Debt Securities, and any commodities,
currencies, currency units or indices, or value, rate or price, relevant to such
determination; (16) if the principal of, premium, if any, or interest on such
Debt Securities is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or those in
which such Debt Securities are stated to be payable, the currencies or currency
units in which payment of the principal of, premium, if any, and interest on
such Debt Securities as to which election is made shall be payable, and the
periods within which and the terms and conditions upon which such election is to
be made; (17) if other than the principal amount thereof, the portion of the
principal amount of such Debt Securities of the series which will be payable
upon acceleration of the Maturity thereof; (18) whether such Debt Securities are
subordinate in right of payment to any Senior Indebtedness of the Company and,
if so, the terms and conditions of such subordination and the aggregate
principal amount of such Senior Indebtedness outstanding as of a recent date;
(19) any covenants to which the Company may be subject with respect to such Debt
Securities; (20) the applicability of the provisions described under
"Defeasance" below; (21) the terms and conditions, if any, pursuant to which
such Debt Securities are convertible into or exchangeable for Common Stock or
other securities; (22) if the principle amount payable at the Stated Maturity of
the Debt Securities is not determinable upon original issuance or at any
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time prior to Maturity, the amount that is deemed to be the principal amount
outstanding at any time; (23) the terms of any guarantee of the payment of
principal and interest on the Debt Securities; (24) any additions, deletions or
changes in the Events of Default with respect to the Debt Securities and (25)
any other terms of such Debt Securities.
Debt Securities may be issued at a discount from their principal amount.
United States federal income tax considerations and other special considerations
applicable to any such Original Issue Discount Securities will be described in
the applicable Prospectus Supplement.
If the purchase price of any series of Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of, premium, if any, and interest on any series of Debt Securities are
payable in a foreign currency or currencies, a foreign currency unit or units or
in securities, the restrictions, elections, general tax considerations, specific
terms and other information with respect to such series of Debt Securities will
be set forth in the applicable Prospectus Supplement.
Debt Securities may be issued from time to time with payment terms which
are calculated by reference to the value, rate or price of one or more
commodities, currencies, currency units or indices. Holders of such Debt
Securities may receive a principal amount (including premium, if any) on any
principal payment date, or a payment of interest on any interest payment date,
that is greater than or less than the amount of principal (including premium, if
any) or interest otherwise payable on such dates, depending upon the value, rate
or price on the applicable dates of the applicable currency, currency unit,
commodity or index. Information as to the methods for determining the amount of
principal, premium, if any, or interest payable on any date, the currencies,
currency units, commodities or indices to which the amount payable on such date
is linked and any additional tax considerations will be set forth in the
applicable Prospectus Supplement.
SENIOR DEBT SECURITIES
The Senior Debt Securities will rank pari passu with all other unsecured
and unsubordinated debt of the Company and senior to the Senior Subordinated
Debt Securities and Subordinated Debt Securities.
SUBORDINATION OF SENIOR SUBORDINATED DEBT SECURITIES, SUBORDINATED DEBT
SECURITIES AND GUARANTEES
The payment of the principal of, premium, if any, and interest on the
Senior Subordinated Debt Securities and the Subordinated Debt Securities will,
to the extent set forth in the respective Indentures governing such Senior
Subordinated Debt Securities and Subordinated Debt Securities, be subordinated
in right of payment to the prior payment in full of all Senior Indebtedness.
Upon any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, the holders of all Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the Senior Subordinated Debt Securities or the
Subordinated Debt Securities will be entitled to receive any payment in respect
of the principal of, premium, if any, or interest on such Senior Subordinated
Debt Securities or Subordinated Debt Securities, as the case may be. In the
event of the acceleration of the maturity of any Senior Subordinated Debt
Securities or Subordinated Debt Securities, the holders of all Senior
Indebtedness will be entitled to receive payment in full of all amounts due or
to become due thereon before the Holders of the Senior Subordinated Debt
Securities or Subordinated Debt Securities, as the case may be, will be entitled
to receive any payment upon the principal of, premium, if any, or interest on
such Senior Subordinated Debt Securities or Subordinated Debt Securities, as the
case may be. No payments on account of principal, premium, if any, or interest
in respect of the Senior Subordinated Debt Securities or Subordinated Debt
Securities may be made if there shall have occurred and be continuing a default
in the payment of principal of (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period, or a default with respect to
any Senior Indebtedness permitting the holders thereof to accelerate the
maturity thereof, or if any judicial proceedings shall be pending with respect
to any such default. For purposes of the subordination provisions, the payment,
issuance or delivery of cash, property or
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securities (other than stock, and certain subordinated securities, of the
Company) upon conversion, redemption or otherwise of a Senior Subordinated Debt
Security or Subordinated Debt Security will be deemed to constitute payment on
account of the principal of such Senior Subordinated Debt Security or
Subordinated Debt Security, as the case may be.
By reason of such provisions, in the event of insolvency, holders of Senior
Subordinated Debt Securities and Subordinated Debt Securities may recover less,
ratably, than holders of Senior Indebtedness with respect thereto.
The term "Senior Indebtedness," means the obligations of the Company with
respect to (i) Indebtedness of the Company under the Bank Credit Facility and
any renewal, refunding, refinancing, replacement or extension thereof and (ii)
any other Indebtedness of the Company (other than the Securities), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed, and any renewal, refunding, refinancing, replacement or extension
thereof, 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 not be senior in right of
payment to the Securities or that such indebtedness is PARI PASSU with or junior
to the Securities. Notwithstanding the foregoing, Senior Indebtedness shall not
include (i) indebtedness of the Company to a subsidiary of the Company, (ii)
amounts owed for goods, materials or services purchased in the ordinary course
of business, (iii) indebtedness incurred in violation of this Indenture, (iv)
amounts payable or any other Indebtedness to employees of the Company or any
Subsidiary of the Company, (v) any liability for Federal, state, local or other
taxes owed or owing by the Company, (vi) any indebtedness of the Company that,
when incurred and without regard to any election under Section 1111(b) of the
United States Bankruptcy Code, was without recourse to the Company, and (vii)
indebtedness evidenced by Senior Subordinated Debt Securities.
If this Prospectus is being delivered in connection with a series of Senior
Subordinated Debt Securities or Subordinated Debt Securities, the accompanying
Prospectus Supplement or the information incorporated herein by reference will
set forth the approximate amount of Senior Indebtedness outstanding as of the
end of the Company's most recent fiscal quarter.
FORM, EXCHANGE, REGISTRATION, CONVERSION, TRANSFER AND PAYMENT
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.
Registered Debt Securities of any series (other than a Global Security)
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 Indenture,
such Bearer Debt Securities (with all unmatured coupons, except as provided
below, and all matured coupons in default) will be exchangeable into Registered
Debt 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 Indenture.
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 be delivered outside the United States in
definitive form in connection with its original issuance only if prior to
delivery the person entitled
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to receive such Bearer Debt Security furnishes written certification, in the
form required by the 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 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 Debt Security.
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 or agency of
the Company maintained for such purposes and at any other office or agency
maintained for such purpose with respect to any series of Debt Securities and
referred to in the applicable Prospectus Supplement, without a service charge
and upon payment of any taxes and other governmental charges as described in the
Indenture. Such transfer or exchange will be effected upon the Company or its
agent, as the case may be, being satisfied with the documents of title and
identity of the person making the request.
The Company shall not be required to (i) issue, register the transfer of or
exchange Debt Securities of any series during a period of 15 days prior to the
mailing of a notice of redemption of Debt Securities of that series; or (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except that any Bearer Debt Security exchangeable for a
Registered Debt Security of that series may be so exchanged during the period
preceding the redemption date therefor which is simultaneously surrendered for
redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and premium, if any) 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
("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 with a bank located outside the United States; provided,
however, that the written certification described above under "-- Form,
Exchange, Registration, Conversion, Transfer and Payment" has been delivered
prior to the first actual payment of interest. Unless otherwise indicated in the
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. 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 premium, if any) and interest on Bearer Debt Securities denominated and
payable in US dollars will be made at the office of the Company's Paying Agent
in the United States, if (but only if) payment of the full amount thereof in US
dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
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Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and premium, if any) 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.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee will be designated as a Paying Agent for
the Trustee 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 issued 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 issued 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 issued as Bearer Securities, the Company will be
required to maintain (i) a Paying Agent in the United States 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.
All monies 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 two years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company and the holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof.
TEMPORARY GLOBAL SECURITIES
If so specified in the 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 depository 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 the 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 the applicable Prospectus Supplement, but, unless otherwise
specified in the applicable Prospectus Supplement, only upon written
certification in the form and to the effect described under "-- Form, Exchange,
Registration, Conversion, Transfer and Payment." 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.
Unless otherwise specified in the 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
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case of written certification in the form and to the effect described above
under "-- Form, Exchange, Registration, Conversion, Transfer and Payment" as of
the relevant Interest Payment Date regarding the portion of such temporary
global Debt Security on which interest is to be so credited.
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 interests 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.
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 Securities that will be deposited with, or on behalf
of, a depositary ("Depositary") or its nominee identified in the applicable
Prospectus Supplement. In such a case, one or more Global Securities will be
issued in a denomination or aggregate denomination equal to the portion of the
aggregate principal amount of Outstanding Debt Securities of the series to be
represented by such Global Security or Securities. The specific terms of the
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 Security representing all or a portion of a series of Debt
Securities will be described in the applicable Prospectus Supplement.
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)
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)(1)(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 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, Conversion, Transfer and Payment." 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 federal 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
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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.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series: (a) failure to pay principal (or premium, if any)
on any Debt Security of that series when due; (b) failure to pay any interest on
any Debt Security of that series when due, which failure continues for 30 days;
(c) failure to perform any other covenant of the Company in the applicable
Indenture or any other covenant to which the Company may be subject with respect
to Debt Securities of that series (other than a covenant solely for the benefit
of a series of Debt Securities other than that series), which failure continues
for 90 days after written notice as provided in the applicable Indenture; and
(d) certain events of bankruptcy, insolvency or reorganization.
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the Trustee or the Holders of at
least 25% in principal amount of the Outstanding Debt Securities of that series,
by notice as provided in the applicable Indenture, may declare the principal
amount (or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Debt Securities of that series to be due and
payable immediately, except that upon the occurrence of an Event of Default
specified in (d) above, the principal amount (or in the case of Original Issue
Discount Securities, such portion) of all Debt Securities shall be immediately
due and payable without any action by the Trustee or any Holder. At any time
after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before judgment or decree based on such acceleration
has been obtained, the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. For information as to waiver of defaults,
see "Modification and Waiver" below.
The Indentures will provide that, subject to the duty of the respective
Trustees thereunder during an Event of Default to act with the required standard
of care, each such Trustee will be under no obligation to exercise any of its
rights or powers under the respective Indentures at the request or direction of
any of the Holders, unless such Holders shall have offered to such Trustee
reasonable security or indemnity. Subject to certain provisions, including those
requiring security or indemnification of the applicable Trustee, the Holders of
a majority in principal amount of the Outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on such Trustee, with respect to the Debt Securities of that
series.
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the applicable
Trustee written notice of a continuing Event of Default and unless the Holders
of at least 25% in aggregate principal amount of the Outstanding Debt Securities
of the same series shall have written requests, and offered reasonable
indemnity, to such Trustee to institute such a proceeding, and the Trustee shall
not have received from the Holders of a majority in aggregate principal amount
of the Outstanding Debt Securities of the same series a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a Holder of
a Debt Security for enforcement of payment of the principal of and interest on
such Debt Security on or after the respective due dates expressed in such Debt
Security.
The Company is required to furnish to the Trustees annually a statement as
to the performance by the Company of its obligations under the respective
Indentures and as to any default in such performance.
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MODIFICATION AND WAIVER
The Indenture provides that Supplemental Indentures may be entered into by
the Company and the Trustee without the consent of any Holders of Debt
Securities in certain limited circumstances, including (i) to cure any
ambiguity, omission, defect or inconsistency, (ii) to provide for the assumption
of the obligations of the Company under the Indenture upon the merger,
consolidation or sale or other disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole and certain other
events specified in the "Merger, Consolidation and Sale of Substantially All
Assets" covenant, (iii) to provide for uncertificated Debt Securities in
addition to or in place of certificated Debt Securities, (iv) to comply with any
requirement of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act of 1939, as amended, (v) to make
any change in the Debt Securities of any or all series that does not adversely
affect the rights of any Holder of Debt Securities of the affected series in any
material respect, (vi) to add Subsidiary guarantors pursuant to the procedures
set forth in the Indentures, and (vii) certain other modifications and
amendments as set forth in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Debt Securities, of any series then outstanding, to
execute supplemental indentures or amendments adding any provisions to or
changing or eliminating any of the provisions of the Indenture or modifying the
rights of the Holders of the Debt Securities of such series, except that no such
supplemental indenture, amendment or waiver may, without the consent of all the
Holders of Debt Securities of such series then outstanding, among other things,
(i) reduce the principal amount of Debt Securities of such series whose Holders
must consent to an amendment or waiver, (ii) reduce the rate of or change the
time of payment of interest on any Debt Securities, (iii) change the currency in
which any amount due in respect of the Debt Securities is payable, (iv) reduce
the principal of or any premium on or change the Stated Maturity of any Debt
Securities or alter the redemption or repurchase provisions with respect
thereto, (v) reduce the relative ranking of any Debt Securities, (vi) release
any security that may have been granted in respect of the Debt Securities, (vii)
impair the right of any Holder to institute suit for enforcement of any payment
on or with respect to such Holder's Debt Securities and (viii) make certain
other significant amendments or modifications as specified in the Indenture.
The Holders of at least a majority in principal amount of the Outstanding
Debt Securities of any series may, on behalf of the Holders of all Debt
Securities of that series, waive compliance by the Company with certain
covenants of the applicable Indenture and any past default under the applicable
Indenture with respect to that series, except a default in the payment of the
principal of, premium, if any, or interest on, any Debt Security of that series
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 of that series affected.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of any series of
outstanding Debt Securities, may consolidate with or merge into, or transfer or
lease its assets substantially as an entirety (treating the Company and each of
its Subsidiaries as a single consolidated entity) to, any corporation, and any
other corporation may consolidate with or merge into, or transfer or lease its
assets substantially as an entirety to, the Company, provided that the
corporation (if other than the Company) 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 organized and existing under the laws of
the United States of America or any political subdivision thereof, and assumes
the Company's obligations under each series of Outstanding Debt Securities and
the Indentures applicable thereto and that the Trustee is satisfied that, 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 occurred and be continuing.
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DEFEASANCE
If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series, the Company at its option (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace destroyed, stolen, lost or mutilated Debt
Securities of such series, and to maintain an office or agency in respect of the
Debt Securities and hold moneys for payment in trust) or (ii) will be released
from its obligations to comply with certain covenants specified in the
applicable Prospectus Supplement with respect to the Debt Securities of such
series, and the occurrence of certain Events of Default as specified in the
applicable Prospectus Supplement with respect to the Debt Securities of such
series, shall no longer be Events of Default, if, in either case, the Company
irrevocably deposits with the applicable Trustee, in trust, money, Government
Obligations of the government issuing the currency in which the Debt Securities
of the relevant series are denominated or a combination thereof that through the
payment of interest thereon and principal thereof in accordance with the terms
will provide money in an amount sufficient to pay all the principal of and
premium, if any, and interest on the Securities of such series on the dates such
payments are due (up to the Stated Maturity Date, or the Redemption Date, as the
case may be) in accordance with the terms of such Debt Securities. Such a trust
may only be established if, among other things, (a) 123 days pass after the
deposit is made and during the 123-day period no Event of Default described in
clause (d) under "Events of Default" shall have occurred and be continuing at
the end of such period and (b) the Company shall have delivered an Opinion of
Counsel to the effect that (i) the Holders of the Debt Securities will not
recognize gain or loss for United States federal income tax purposes as a result
of such deposit or defeasance and will be subject to United States federal
income tax in the same manner as if such defeasance had not occurred, and (ii)
the trust resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940. Such
opinion, in the case of defeasance under clause (i) above, must refer to and be
based upon a ruling of the Internal Revenue Service or a change in applicable
federal income tax law occurring after the date of the applicable Indenture. In
the event the Company fails to comply with its remaining obligations under the
applicable Indenture after a defeasance of such Indenture with respect to the
Debt Securities of any series as described under clause (ii) above and the Debt
Securities of such series are declared due and payable because of the occurrence
of any undefeased Event of Default, the amount of money and Government
Obligations on deposit with the applicable Trustee may be insufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable in respect to such payments.
Notwithstanding the description set forth under "Subordination of Senior
Subordinated Debt Securities and Subordinated Debt Securities" above, in the
event that the Company deposits money or Government Obligations in compliance
with the Indenture that governs any Senior Subordinated Debt Securities or
Subordinated Debt Securities, as the case may be, in order to defease all or
certain of its obligations with respect to the applicable series of Debt
Securities, the money or Government Obligations so deposited will not be subject
to the subordination provisions of the applicable Indenture and the indebtedness
evidenced by such series of Debt Securities will not be subordinated in right of
payment to the holders of applicable Senior Indebtedness to the extent of the
money or Government Obligations so deposited.
REGARDING THE TRUSTEES
The Indentures contain certain limitations on the right of each Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. Each Trustee will be
permitted to engage in certain other transactions; however, if it acquires any
conflicting interest within the meaning of the Trust Indenture Act of 1939 and
there is a default under the Debt Securities issued under the applicable
Indenture, it must eliminate such conflict or resign.
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DESCRIPTION OF PREFERRED STOCK
The Company's Certificate of Incorporation currently authorizes the
issuance of 10,000,000 shares of Preferred Stock, par value $.01 per share,
issuable in series. The board of directors of the Company is authorized to
approve the issuance of one or more series of Preferred Stock without further
authorization of the stockholders of the Company and to fix the number of
shares, the designations, the relative rights and preferences and the
limitations of any such series.
At the date of this Prospectus, no shares of preferred stock were issued
and outstanding, and 500,000 shares of Series A Junior Participating Preferred
Stock were reserved for issuance in connection with the Company's Stockholders'
Rights Plan dated February 24, 1996 (the "Rights Plan"). See "Description of
Common Stock-Stockholders' Rights Plan." The terms of the Company's currently
authorized Series A Junior Participating Preferred Stock do not limit the
issuance of other series of Preferred Stock ranking as to dividends and payments
upon liquidation senior to, on a parity with or junior to such existing
Preferred Stock.
The applicable Prospectus Supplement will set forth the number of shares,
particular designation, relative rights and preferences and the limitations of
any series of Preferred Stock in respect of which this Prospectus is delivered.
The particular terms of any such series will include the following:
(i) The maximum number of shares to constitute the series and the
designation thereof;
(ii) The annual dividend rate, if any, on shares of the series, whether
such rate is fixed or variable or both, the date or dates from which
dividends will begin to accrue or accumulate, whether dividends will
be cumulative and whether such dividends shall be paid in cash, Common
Stock or otherwise;
(iii) Whether the shares of the series will be redeemable and, if so, the
price at and the terms and conditions on which the shares of the
series may be redeemed, including the time during which shares of the
series may be redeemed and any accumulated dividends thereon that the
holders of shares of the series shall be entitled to receive upon the
redemption thereof;
(iv) The liquidation preference, if any, applicable to shares of the
series;
(v) Whether the shares of the series will be subject to operation of a
retirement or sinking fund and, if so, the extent and manner in which
any such fund shall be applied to the purchase or redemption of the
shares of the series for retirement or for other corporate purposes,
and the terms and provisions relating to the operation of such fund;
(vi) The terms and conditions, if any, on which the shares of the series
shall be convertible into, or exchangeable for, shares of any other
class or classes of capital stock of the Company or another
corporation or any series of any other class or classes, or of any
other series of the same class, including the price or prices or the
rate or rates of conversion or exchange and the method, if any, of
adjusting the same;
(vii) The voting rights, if any, of the shares of the series;
(viii) The currency or units based on or relating to currencies in which
such series is denominated and/or in which payments will or may be
payable;
(ix) The methods by which amounts payable in respect of such series may be
calculated and any commodities, currencies or indices, or price, rate
or value, relevant to such calculation;
(x) Any listing of the shares of the series on a securities exchange; and
(xi) Any other preferences and relative, participating, optional or other
rights or qualifications, limitations or restrictions thereof.
Any material United States federal income tax consequences and other
special considerations to any offered Preferred Stock will be described in the
Prospectus Supplement relating to the offering and sale of such Preferred Stock.
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TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Preferred Stock will be
designated in the related Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
GENERAL
The following is a description of certain general terms and provisions of
the Common Stock. The summary of terms of the Company's Common Stock contained
in this Prospectus does not purport to be complete and is subject to, and
qualified in its entirety by, the provisions of the Company's Restated
Certificate of Incorporation, Bylaws and Rights Plan, each of which has been
incorporated by reference herein.
The Company's Restated Certificate of Incorporation authorizes the issuance
of 50,000,000 shares of Common Stock, $.01 par value. All issued and outstanding
shares of Common Stock are validly issued, fully paid and nonassessable. The
holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of holders of Common Stock. The Common Stock does
not have cumulative voting rights. Each share of Common Stock is entitled to
participate equally in dividends, as and when declared by the Company's board of
directors, and in the distribution of assets in the event of liquidation,
subject in all cases to any prior rights of outstanding shares of the Company's
preferred stock. The shares of Common Stock have no preemptive or conversion
rights, redemption rights or sinking fund provisions.
STOCKHOLDERS' RIGHTS PLAN
On February 24, 1996, the Company's board of directors declared a dividend
distribution of one Preferred Stock Purchase Right (a "Right") for each
outstanding share of Common Stock. The description and terms of the Rights are
set forth in the Rights Agreement which is incorporated herein by reference. The
distribution was made as of March 6, 1996, to stockholders of record on that
date. Each Right entitles the registered holder of Common Stock to purchase from
the Company one one-hundredth (1/100) of a share of preferred stock, designated
as Series A Junior Participating Preferred Stock, at a price of $18.75 per one
one-hundredth (1/100) of a share, subject to adjustments. The Rights will expire
at the close of business on March 6, 2006, unless the expiration date is
extended or unless the Rights are earlier redeemed or exchanged by the Company
as described in the Rights Agreement.
Initially, the Rights will not be exercisable or represented by a separate
certificate but will trade together with the Common Stock. The Rights, unless
redeemed prior thereto, become exercisable only upon the close of business on
the day which is the earlier of (a) the tenth day after a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions as noted in the Rights Agreement, has acquired beneficial ownership
of 15% or more of the Company's outstanding Common Stock (an "Acquiring Person")
or (b) the tenth business day (or such later date as may be determined by the
Company's board of directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) after the commencement or
announcement of an intention to commence a tender or exchange offer, the
consummation of which would result in the ownership of 15% or more of the
Company's outstanding Common Stock. All issuances of Common Stock after the date
of the Rights Agreement will include Rights.
TRANSFER AGENT AND REGISTRAR
The co-transfer agents and co-registrars for the Common Stock are Corporate
Stock Transfer, Inc., and First Interstate Bank of California.
LISTING
The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol BSNX.
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DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants to purchase shares of Common Stock, shares
of Preferred Stock or Debt Securities. Warrants may be issued, subject to
regulatory approvals, independently or together with any Common Stock, Preferred
Stock or Debt Securities, as the case may be, and may be attached to or separate
from such Common Stock, Preferred Stock or Debt Securities. Each series of
Warrants will be issued under a separate warrant agreement (each a "Warrant
Agreement") to be entered into between the Company and a warrant agent (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants of such series and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Warrants.
The applicable Prospectus Supplement will describe the following terms of
any Warrants in respect of which this Prospectus is delivered: (i) the title of
such Warrants; (ii) a description of the securities (which may include shares of
Common Stock, shares of Preferred Stock or Debt Securities) for which such
Warrants are exercisable; (iii) the price or prices at which such Warrants will
be issued; (iv) the periods during which the Warrants are exercisable; (v) the
number of shares of Common Stock or Preferred Stock or the amount of Debt
Securities for which each Warrant is exercisable; (vi) the exercise price for
such Warrants, including any changes to or adjustments in the exercise price;
(vii) the currency or currencies, including composite currencies, in which the
exercise price of such Warrants may be payable; (viii) if applicable, the
designation and terms of the shares of Preferred Stock with which such Warrants
are issued; (ix) if applicable, the terms of the Debt Securities with which such
Warrants are issued; (x) if applicable, the number of Warrants issued with each
share of Common Stock or Preferred Stock or Debt Security; (xi) if applicable,
the date on and after which such Warrants and the related shares of Common Stock
or Preferred Stock or Debt Securities will be separately transferable; (xii) if
applicable, a discussion of certain United States federal income tax
considerations; (xiii) any listing of the Warrants on a securities exchange; and
(xiv) any other terms of such Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Warrants.
SELLING STOCKHOLDER
Common Stock owned by Michael S. Smith, Chairman of the Board, President
and Chief Executive Officer, may be offered for Mr. Smith's account pursuant to
this Prospectus. The following table sets forth information as of September 22,
1997 regarding the Common Stock owned by Mr. Smith, which may be offered
hereunder.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED OWNED AFTER THE
PRIOR TO THE OFFERING OFFERING
------------------------------------- --------------------------
SELLING NUMBER OF SHARES TO BE
STOCKHOLDER NUMBER PERCENT SOLD IN THE OFFERING NUMBER PERCENT
- ----------------------- ------------------ ----------------- -------------------------------- ------------- ------------
<S> <C> <C>
Michael S. Smith 3,248,150(1) 30.13 Not to exceed 300,000* * *
</TABLE>
- --------------
* To be included in a Prospectus Supplement
-23-
<PAGE>
(1) Includes 2,675,150 shares held by Mr. Smith; 304,300 shares held by Iris
Smith, Mr. Smith's wife; 96,000 shares held by trusts for Mr. Smith's
children, of which Mr. Smith is trustee; and 92,700 shares held by KaiTar
Foundation, a nonprofit charitable foundation of which Mrs. Smith is
president and Mr. Smith is vice-president. Mr. Smith has no voting or
investment power with respect to the shares held by Iris Smith and
disclaims beneficial ownership of such shares. Mr. Smith, in his capacity
as the trustee of the trusts for his children and as vice president of
KaiTar Foundation, has voting and investment power with respect to the
shares held in such capacity and may be deemed to be the beneficial owner
of such shares but disclaims beneficial ownership of such shares. Also
includes options for 60,000 shares exercisable within 60 days and 20,000
performance shares, the restrictions on which lapse December 31, 1999.
-24-
<PAGE>
PLAN OF DISTRIBUTION
The Company may offer and sell the Debt Securities, Preferred Stock, Common
Stock and Warrants to or through underwriters or dealers, and also may offer and
sell Debt Securities, Preferred Stock, Common Stock and Warrants directly to
other purchasers or through agents.
The distribution of the Securities may be affected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such market prices
or at negotiated prices.
Each Prospectus Supplement will set forth the terms of the offering of the
particular series of Securities to which the Prospectus Supplement relates,
including the name or names of any underwriters, dealers or agents, the purchase
price or prices of the Securities, the proceeds to the Company or the selling
stockholder, if applicable, from the sale of such series of Securities, the use
of such proceeds, any initial public offering price or purchase price of such
series of Securities, any underwriting discount or commission, any discounts,
concessions or commissions allowed or reallowed or paid by any underwriters to
other dealers, any commissions paid to any agents, and the securities exchanges,
if any, on which such Securities will be listed. Any initial public offering
price or purchase price and any discounts, concessions or commissions allowed or
reallowed or paid by any underwriter to other dealers may be changed from time
to time.
In connection with distributions of Common Stock or otherwise, the Company
may enter into hedging transactions with broker-dealers in connection with which
such broker-dealers may sell Common Stock registered hereunder in the course of
hedging through short sales the positions they assumed with the Company.
In connection with the sale of the Securities, underwriters or agents may
receive compensation from the Company, the selling stockholder, if applicable,
or from purchasers of Securities for whom they may act as agents in the form of
discounts, concessions or commissions. Underwriters may sell Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Underwriters, dealers and
agents that participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the Company
and any profit on the resale of Securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received from
the Company will be described, in the applicable Prospectus Supplement.
The sale of all or a portion of the shares of Common Stock offered hereby
by the Selling Stockholder may be effected from time to time on any exchange on
which the Common Stock is then listed at prevailing prices at the time of such
sale, at prices related to such prevailing prices or at negotiated prices. The
Selling Stockholder may sell all or a portion of the shares offered hereby in
private transactions or in the over-the-counter market at prices related to the
prevailing prices of the shares on the Nasdaq National Market.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company or the selling stockholder against certain
liabilities, including liabilities under U.S. securities legislation.
The Company may grant underwriters who participate in the distribution of
Securities an option to purchase additional Securities to cover over-allotments,
if any.
Certain underwriters and selling group members (if any) who are qualifying
registered market makers on the Nasdaq National Market may engage in passive
market making transactions in the Common Stock on the Nasdaq National Market in
accordance with Rule 10b-6A under the Securities Exchange Act of 1934, as
amended, during the two business day period before commencement of offers or
sales of the Common Stock.
-25-
<PAGE>
The place and date of delivery for the Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Securities from the Company pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. Unless otherwise set forth in the applicable Prospectus Supplement,
the obligations of any purchaser under any such contract will not be subject to
any conditions except that (i) the purchase of the Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject, and (ii) if the Securities are also being sold to
underwriters acting as principals for their own account, the underwriters shall
have purchased such Securities not sold for delayed delivery. The underwriters
and such other persons will not have any responsibility in respect of the
validity or performance of such contracts.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Securities in respect of which this Prospectus is being delivered (other than
Common Stock) will be a new issue of securities, will not have an established
trading market when issued and will not be listed on any securities exchange.
Any underwriters or agents to or through whom such Securities are sold by the
Company for public offering and sale may make a market in such Securities, but
such underwriters or agents will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can be given as to
the liquidity of the trading market for any such Securities.
Certain of the underwriters and their affiliates may from time to time
perform various commercial banking and investment banking services for the
Company, for which customary compensation is received.
EXPERTS
The consolidated financial statements of the Company, included in its
Annual Report on Form 10-K for the year ended December 31, 1996, incorporated by
reference in this Prospectus and elsewhere in the Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated herein in
reliance upon the authority of said firm as experts in giving said report.
Future financial statements of the Company and the reports thereon of Arthur
Andersen LLP, or any successor independent accounting firm that has audited the
Company's financial statements, also will be incorporated by reference in this
Prospectus and elsewhere in the Registration Statement in reliance upon the
authority of such firm as experts in giving those reports to the extent said
firm has audited those financial statements and consented to the use of their
reports thereon.
Estimates of historical onshore oil and natural gas reserves of the Company
as of December 31, 1994, 1995 and 1996, incorporated by reference herein are
based upon engineering studies prepared by the Company and audited by the
independent engineering firm of Netherland, Sewell & Associates, Inc. Estimates
of historical offshore reserves of the Company as of December 31, 1996,
incorporated by reference herein are based upon engineering studies prepared by
the independent engineering firm of Ryder Scott Company Petroleum Engineers.
Such estimates are incorporated by reference herein (to the extent covered by
consents filed with the Commission) in reliance upon the authority of such firms
as experts in such matters.
LEGAL MATTERS
Certain legal matters relating to the validity of the Securities will be
passed upon for the Company by Davis, Graham & Stubbs LLP, Denver, Colorado.
Certain legal matters will be passed upon for the underwriters, if any, by the
counsel named in the applicable Prospectus Supplement.
-26-
<PAGE>
GLOSSARY
The terms defined in this section are used throughout this Prospectus.
2-D seismic data. Seismic data that are acquired and processed to yield a
two-dimensional cross section of the subsurface.
3-D seismic data. Seismic data that are acquired and processed to yield a
three-dimensional picture of the subsurface.
Bcf. Billion cubic feet (of gas).
Bcfe. Billion cubic feet (of gas) equivalent.
Exploitation. The conduct of a drilling or recompletion operation intended
to recover reserves from a formation known to be productive in the area or on
trend with existing production but not classifiable as proved.
Exploratory well. A well drilled to find and produce oil or gas in an
unproved area, to find a new reservoir in a field previously found to be
productive of oil or gas in another reservoir, or to extend a known reservoir.
Gross acres. An acre in which a working interest is owned.
MMBbl. One million barrels of crude oil or other liquid hydrocarbons.
Net acres. The sum of the fractional working interests owned in gross
acres.
Productive well. A well that is producing oil or gas or that is capable of
production.
Proved reserves. The estimated quantities of crude oil, natural gas and
natural gas liquids which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions.
Undeveloped acreage. Lease acreage on which wells have not been drilled or
completed to a point that would permit the production of commercial quantities
of oil and gas, regardless of whether such acreage contains proved reserves.
Working interest. The operating interest which gives the owner the right to
drill, produce and conduct operating activities on the property and to share in
the production.
-27-
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER OR DEALER.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT, OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATES HEREOF
OR THEREOF. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN
OFFER OR SOLICITATION 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 ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
PROSPECTUS
<S> <C> <C>
Available Information............................................2
Incorporation of Certain Documents by Reference..................2
Special Note Regarding Forward-looking Statements................3 BASIN EXPLORATION, INC.
Risk Factors.....................................................4
The Company......................................................9
Use of Proceeds.................................................11
Ratio of Earnings to Fixed Charges .............................11
Description of Debt Securities..................................11
Description of Preferred Stock..................................21
Description of Common Stock.....................................22
Description of Warrants.........................................23
Selling Stockholder.............................................23
Plan of Distribution............................................25
Experts.........................................................26
Legal Matters...................................................26
Glossary........................................................27
Dated ____________, 1997
</TABLE>
-28-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth expenses, other than underwriting fees and
commissions, expected to be borne by the Registrant in connection with the
distribution of the securities being registered:
Securities and Exchange Commission registration fee............. $60,607
Blue Sky fees and expenses...................................... 20,000
NASDAQ/NMS listing fees......................................... 35,000
NASD filing fee ................................................ 10,000
Rating agency fees ............................................. 75,000
Transfer Agent fees ............................................ 10,000
Legal .......................................................... 275,000
Printing ....................................................... 175,000
Accounting ..................................................... 100,000
Miscellaneous................................................... 39,393
------------
TOTAL.................................................. $ 800,000
============
All amounts listed above, except for the registration fee, are estimates.
ITEM 15 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Bylaws and Restated Certificate of Incorporation of Basin Exploration,
Inc. (the "Company") provide that the Company shall, to the full extent
permitted by the General Corporation Law of the State of Delaware, as amended
from time to time, indemnify all directors and officers of the Company. Section
145 of the Delaware General Corporation Law provides in part that a corporation
shall have the power 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 such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interest of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. Similar indemnity is authorized for such persons against expenses
(including attorneys' fees) actually and reasonably incurred in defense or
settlement of any threatened, pending or completed action or suit by or in the
right of the corporation, if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interest of
the corporation, and provided further that (unless a court of competent
jurisdiction otherwise provides) such person shall not have been adjudged liable
to the corporation. Any such indemnification may be made only as authorized in
each specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Additionally, the Restated Certificate of Incorporation eliminates in
certain circumstances the monetary liability of directors of the Company for a
breach of their fiduciary duty as directors. This provision does not eliminate
the liability of a director (i) for a breach of the director's duty of loyalty
to Basin or its stockholders; (ii) for acts or omissions by the director not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to
<PAGE>
the declaration of dividends and purchase of redemption of shares in violation
of the Delaware General Corporation Law); or (iv) for any transaction from which
the director derived an improper personal benefit.
A policy of directors' and officers' liability insurance is maintained by
the Company, which policy insures directors and officers for losses as a result
of claims based upon their acts or omissions as directors and officers of the
Registrant, including liabilities arising under the Securities Act of 1933.
ITEM 16 - EXHIBITS
1.1 Form of Underwriting Agreement - Equity**
1.2 Form of Underwriting Agreement - Debt**
4.1 Restated Certificate of Incorporation of Basin1
4.2 Restated Bylaws of Basin/1/
4.3 Certificate of Designations for Series A Junior Participating
Preferred Stock/2/
4.4 Common Stock Certificate of Basin/1/
4.5 Form of Indenture for Debt Securities*
4.6 Form of Debt Security**
4.7 Form of Preferred Stock Certificate**
4.8 Form of Common Stock Warrant Agreement (including form of Common
Stock Warrant Certificate)**
4.9 Form of Preferred Stock Warrant Agreement (including form of
Preferred Stock Warrant Certificate)**
4.10 Form of Debt Warrant Agreement (including form of Debt Warrant
Certificate)**
4.11 Form of Certificate of Designations of Preferred Stock**
4.12 Form of Rights Agreement dated as of February 24, 1996, between
Basin Exploration, Inc. and Corporate Stock Transfer, Inc. as
Rights Agent/2/
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP*
12.1 Statement re Computation of Ratios*
21 Subsidiaries/3/
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Netherland, Sewell & Associates, Inc.*
23.3 Consent of Ryder Scott Company*
II-2
<PAGE>
23.4 Consent of Davis, Graham & Stubbs LLP - see Exhibit 5.1*
24.1 Power of Attorney (included on signature pages)*
25 Statement of Eligibility of Trustee on Form T-1**
27 Financial Data Schedule**
- ---------------
* Filed herewith.
1 Filed as an Exhibit to Basin's Registration Statement on Form S-1 as filed
on March 17, 1992, Registration No. 33-46486, and incorporated herein by
reference.
2 Filed as Exhibit 4.1 to the Company's Registration Statement or Form 8-A,
as filed on February 27, 1996 and incorporated herein by reference.
3 Filed as an Exhibit to Form 10-K filed on March 31, 1997, and incorporated
herein by reference.
** To be filed by amendment or subsequently incorporated by reference herein.
ITEM 17 - UNDERTAKINGS
The Company hereby undertakes that, for the purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
notwithstanding the foregoing, any increase or decrease in volume
of securities offers (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; and
II-3
<PAGE>
(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 (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by Basin
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934, that are incorporated by reference in the Registration
Statement;
(b) That for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of a Registration Statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933
shall be deemed to be part of this registration statement as of the
time it was declared effective.
(c) That for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(d) 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or 14c-3 under the Securities Exchange Act of 1934;
and, where the interim financial information required to be presented by Article
3 of Regulation S-X are not set forth in the prospectus, to deliver or cause to
be delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under 305(b)(2) of the Trust Indenture
Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of Denver, State of Colorado, on the 22nd day
of September, 1997.
BASIN EXPLORATION, INC.
By: /s/ MICHAEL S. SMITH
--------------------------------------
Michael S. Smith, President, Chief
Executive Officer and Chairman of the
Board
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated, and, KNOW ALL MEN BY THESE PRESENTS, that
each individual whose signature appears below hereby constitutes and appoints
Michael S. Smith, Howard L. Boigon and Neil L. Stenbuck, and each of them, his
true and lawful agent, proxy and attorney-in-fact, each acting alone, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments (including
post-effective amendments) to this registration statement together with all
schedules and exhibits thereto and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together
with all schedules and exhibits thereto, (ii) act on, sign and file such
certificates, instruments, agreements and other documents as may be necessary or
appropriate in connection therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such amendment or any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and (iv) take any and all actions which may
be necessary or appropriate in connection therewith, granting unto such agents,
proxies and attorneys-in-fact, and each of them, full power and authority to do
and perform each and every act and thing necessary or appropriate to be done, as
fully for all intents and purposes as he might or could do in person, hereby
approving, ratifying and confirming all that such agents, proxies and
attorneys-in-fact, any of them or any of his or their substitutes may lawfully
do or cause to be done by virtue thereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ MICHAEL S. SMITH
- ------------------------------------- President, Chief Executive September 18, 1997
Michael S. Smith Officer and Chairman of the
Board (Principal Executive Officer)
/s/ HOWARD L. BOIGNON
- ------------------------------------- Vice President - General Counsel, September 18, 1997
Howard L. Boigon Secretary and Director
/s/ NEIL L. STENBUCK
- ------------------------------------- Vice President, Chief Financial September 18, 1997
Neil L. Stenbuck Officer and Director
/s/ JAMES A. TUELL
- ------------------------------------- Controller, Principal Accounting September 18, 1997
James A. Tuell Officer
II-5
<PAGE>
/s/ JOHN F. GREENE
- ------------------------------------- Director September 19, 1997
John F. Greene
/s/ J. PAUL HELLSTROM
- ------------------------------------- Director September 19, 1997
J. Paul Hellstrom
/s/ MICHAEL A. NICOLAIS
- ------------------------------------- Director September 19, 1997
Michael A. Nicolais
/s/ LARRY D. UNRUH
- ------------------------------------- Director September 19, 1997
Larry D. Unruh
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
4.5 Form of Indenture for Debt Securities
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP
12.1 Statement re Computation of Ratios
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Netherland, Sewell & Associates, Inc.
23.3 Consent of Ryder Scott Company
23.4 Consent of Davis, Graham & Stubbs LLP - see Exhibit 5.1
24.1 Power of Attorney (included on signature pages)
II-7
Exhibit 4.5
================================================================================
BASIN EXPLORATION, INC.
----------
DEBT SECURITIES
------------------------------------
INDENTURE
DATED AS OF ____________ __, 199_
---------------
---------------
TRUSTEE
================================================================================
<PAGE>
Contents, p. i
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
ARTICLE 1 Definitions and Incorporation by Reference......................................................1
SECTION 1.01. Definitions......................................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act...............................13
SECTION 1.03. Rules of Construction...........................................................14
ARTICLE 2 The Securities.................................................................................14
SECTION 2.01. Form and Dating.................................................................14
SECTION 2.02. Amount Unlimited; Issuable in Series............................................15
SECTION 2.03. Execution of Securities.........................................................19
SECTION 2.04. Authentication and Delivery of Securities.......................................20
SECTION 2.05. Denomination of Securities......................................................21
SECTION 2.06. Registrar and Paying Agent......................................................21
SECTION 2.07. Registration of Transfer and Exchange...........................................22
SECTION 2.08. Temporary Securities............................................................24
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen Securities.................................25
SECTION 2.10. Cancellation of Surrendered Securities..........................................26
SECTION 2.11. Provisions of the Indenture and Securities for
the Sole Benefit of the Parties and the Holders..............................26
SECTION 2.12. Paying Agent to Hold Money in Trust.............................................27
SECTION 2.13. Payment of Interest; Interest Rights Preserved..................................27
SECTION 2.14. Securities Denominated in Foreign Currencies....................................28
SECTION 2.15. Wire Transfers..................................................................29
SECTION 2.16. Securities Issuable in the Form of a Global Security............................29
SECTION 2.17. Defaulted Interest..............................................................32
SECTION 2.18. Judgments.......................................................................33
SECTION 2.19. CUSIP Numbers...................................................................34
SECTION 2.20. Form of Trustee's Certificate of Authentication.................................34
ARTICLE 3 Redemption.....................................................................................34
SECTION 3.01. Applicability of Article........................................................34
SECTION 3.02. Tax Redemption; Special Tax Redemption..........................................34
SECTION 3.03. Notices to Trustee..............................................................37
SECTION 3.04. Selection of Securities To Be Redeemed..........................................37
SECTION 3.05. Notice of Redemption............................................................37
SECTION 3.06. Effect of Notice of Redemption..................................................39
<PAGE>
Contents, p. ii
SECTION 3.07. Deposit of Redemption Price.....................................................39
SECTION 3.08. Securities Redeemed in Part.....................................................39
SECTION 3.09. Mandatory and Optional Sinking Funds............................................39
SECTION 3.10. Redemption of Securities for Sinking Fund.......................................40
ARTICLE 4 Covenants......................................................................................40
SECTION 4.01. Payment of Securities...........................................................40
SECTION 4.02. Commission Reports..............................................................41
SECTION 4.03. Payment of Additional Interest..................................................41
SECTION 4.04. Change of Control...............................................................43
SECTION 4.05. Maintenance of Office or Agency.................................................44
SECTION 4.06. Money for the Security Payments to be Held in Trust.............................45
SECTION 4.07. Payment of Taxes and Other Claims...............................................46
SECTION 4.08. Corporate Existence.............................................................46
SECTION 4.09. Compliance Certificate..........................................................46
SECTION 4.10. Further Instruments and Acts....................................................46
SECTION 4.11. Prohibition on Company Becoming Investment Company..............................47
ARTICLE 5 Successor Company..............................................................................47
SECTION 5.01. Merger, Consolidation and Sale of Substantially
All Assets...................................................................................47
ARTICLE 6 Defaults and Remedies..........................................................................48
SECTION 6.01. Events of Default...............................................................48
SECTION 6.02. Acceleration....................................................................50
SECTION 6.03. Other Remedies..................................................................51
SECTION 6.04. Waiver of Past Defaults.........................................................51
SECTION 6.05. Control by Majority.............................................................51
SECTION 6.06. Limitation on Suits.............................................................52
SECTION 6.07. Rights of Holders to Receive Payment............................................52
SECTION 6.08. Collection Suit by Trustee......................................................52
SECTION 6.09. Trustee May File Proofs of Claim................................................52
SECTION 6.10. Priorities......................................................................53
SECTION 6.11. Undertaking for Costs...........................................................54
ARTICLE 7 Trustee........................................................................................54
SECTION 7.01. Duties of Trustee...............................................................54
SECTION 7.02. Rights of Trustee...............................................................55
SECTION 7.03. Individual Rights of Trustee....................................................57
<PAGE>
Contents, p. iii
SECTION 7.04. Trustee's Disclaimer............................................................57
SECTION 7.05. Notice of Defaults..............................................................57
SECTION 7.06. Reports by Trustee to Holders...................................................57
SECTION 7.07. Compensation and Indemnity......................................................57
SECTION 7.08. Separate Trustee; Replacement of Trustee........................................58
SECTION 7.09. Successor Trustee by Merger.....................................................59
SECTION 7.10. Eligibility; Disqualification...................................................59
SECTION 7.11. Preferential Collection of Claims Against Company...............................60
ARTICLE 8 Satisfaction and Discharge of Indenture; Defeasance............................................60
SECTION 8.01. Applicability of Article........................................................60
SECTION 8.02. Discharge of Liability on Securities............................................60
SECTION 8.03. Defeasance......................................................................61
SECTION 8.04. Conditions to Defeasance........................................................61
SECTION 8.05. Application of Trust Money......................................................62
SECTION 8.06. Repayment to Company............................................................63
SECTION 8.07. Indemnity for Government Obligations............................................63
SECTION 8.08. Reinstatement...................................................................63
ARTICLE 9 Supplemental Indentures........................................................................64
SECTION 9.01. Without Consent of Holders......................................................64
SECTION 9.02. With Consent of Holders.........................................................66
SECTION 9.03. Compliance with Trust Indenture Act.............................................67
SECTION 9.04. Revocation and Effect of Consents and Waivers...................................67
SECTION 9.05. Notation on or Exchange of Securities...........................................68
SECTION 9.06. Trustee To Sign Supplemental Indenture..........................................68
ARTICLE 10 Subordination of the Securities................................................................68
SECTION 10.01. Applicability of Article; Agreement to Subordinate.............................68
SECTION 10.02. Liquidation; Dissolution; Bankruptcy...........................................69
SECTION 10.03. Default on Senior Indebtedness.................................................70
SECTION 10.04. Security Payments Permitted if No Default......................................72
SECTION 10.05. When Security Payment Must Be Paid Over........................................72
SECTION 10.06. Notices by the Company.........................................................72
SECTION 10.07. Subrogation....................................................................72
SECTION 10.08. Relative Rights................................................................73
SECTION 10.09. Subordination May Not Be Impaired by the Company...............................73
SECTION 10.10. Distribution of Notice to Representative.......................................73
SECTION 10.11. Rights of Trustee and Paying Agent.............................................73
<PAGE>
Contents, p. iv
SECTION 10.12. Consent of Holders of Specified Senior Indebtedness............................74
SECTION 10.13. Contractual Subordination......................................................74
ARTICLE 11 Conversion of Securities.......................................................................74
SECTION 11.01. Applicability; Conversion Privilege and
Conversion Price.............................................................................74
SECTION 11.02. Exercise of Conversion Privilege...............................................75
SECTION 11.03. Fractions of Shares............................................................76
SECTION 11.04. Adjustment of Conversion Price.................................................77
SECTION 11.05. Notice of Adjustment of Conversion Price.......................................79
SECTION 11.06. Notice of Certain Corporation Action...........................................79
SECTION 11.07. Company to Reserve Common Shares...............................................80
SECTION 11.08. Taxes on Conversion............................................................80
SECTION 11.09. Covenant as to Common Stock....................................................80
SECTION 11.10. Company to Receive Converted Securities........................................80
SECTION 11.11. Provisions in Case of Consolidation, Merger or
Sale of Assets...............................................................................80
SECTION 11.12. Responsibility of Trustee and Conversion Agent.................................81
ARTICLE 12 Miscellaneous..................................................................................82
SECTION 12.01. Compliance Certificates and Opinions...........................................82
SECTION 12.02. Form of Documents Delivered to Trustee.........................................82
SECTION 12.03. Acts of Holders................................................................83
SECTION 12.04. Trust Indenture Act Controls...................................................84
SECTION 12.05. Notices........................................................................85
SECTION 12.06. Communication by Holders with Other Holders....................................86
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar...................................86
SECTION 12.08. Legal Holidays.................................................................86
SECTION 12.09. Governing Law..................................................................86
SECTION 12.10. No Recourse Against Others.....................................................87
SECTION 12.11. Submission to Jurisdiction; Appointment of
Agent for Service of Process; Waiver of Immunities...........................................87
SECTION 12.12. Successors.....................................................................88
SECTION 12.13. Multiple Originals.............................................................88
SECTION 12.14. Table of Contents; Headings....................................................88
</TABLE>
<PAGE>
Cross-Reference, p. v
CROSS-REFERENCE TABLE
TIA Indenture
SECTION SECTION
310(a)(1)................................................................7.10
(a)(2)..............................................................7.10
(a)(3)..............................................................N.A.
(a)(4)..............................................................N.A.
(b)...........................................................7.08; 7.10
(c).................................................................N.A.
311(a)...................................................................7.11
(b).................................................................7.11
(c).................................................................N.A.
312(a)...................................................................2.05
(b)................................................................13.03
(c)................................................................13.03
313(a)...................................................................7.06
(b)(1)..............................................................N.A.
(b)(2)..............................................................7.06
(c)................................................................13.02
(d).................................................................7.06
314(a)......................................................4.02; 4.11; 13.02
(b).................................................................N.A.
(c)(1).............................................................13.04
(c)(2)............................................................ 13.04
(c)(3)..............................................................N.A.
(d).................................................................N.A.
(e)................................................................13.05
(f).................................................................4.11
315(a)...................................................................7.01
(b)..........................................................7.05; 13.02
(c).................................................................7.01
(d).................................................................7.01
(e).................................................................6.11
316(a)(last sentence)...................................................13.06
(a)(1)(A)...........................................................6.05
(a)(1)(B)...........................................................6.04
(a)(2)..............................................................N.A.
(b).................................................................6.07
317(a)(1)................................................................6.08
(a)(2)..............................................................6.09
(b).................................................................2.04
318(a)..................................................................13.01
N.A. Means Not Applicable.
- --------------------------------------------------------------------------------
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
<PAGE>
INDENTURE dated as of ____________ __, 199_, among BASIN EXPLORATION, INC.,
a Delaware corporation (the "COMPANY"), and ________________________, a
__________ corporation, as trustee (the "TRUSTEE").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of unsecured debentures,
notes or other evidences of indebtedness (herein called the "Securities") to be
issued by the Company, unlimited as to principal amount, to bear such rates of
interest, to mature at such time or times, to be issued in one or more series
and to have such other provisions as shall be fixed as hereinafter provided.
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 agreed, for the equal and proportionate
benefit of all Holders of the Securities or of a series thereof, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"AFFILIATE" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person or (ii)
which beneficially owns or holds directly or indirectly 10% or more of any class
of the Voting Stock of such specified Person or of any Subsidiary of 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 Stock, by contract or otherwise; and the terms "CONTROLLING" and
"CONTROLLED" have meanings correlative to the foregoing.
"AUTHORIZED NEWSPAPER" means a newspaper in an official language of the
country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified pursuant to Section 2.02
with respect to the Securities of any series. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in
<PAGE>
different newspapers in the same city meeting the foregoing requirements and in
each case on any business day in such city.
"BANK CREDIT FACILITY" means collectively, one or more senior credit
facilities or commercial paper facilities with banks or other institutional
lenders (including, without limitation, the credit facility pursuant to the
Amended and Restated Credit Agreement, dated August 6, 1996, as amended, among
the Company, Colorado National Bank, Union Bank of California, N.A. and
NationsBank of Texas, N.A.), together with any security and related documents,
as all such credit facilities and documents may be amended, supplemented,
extended, increased, refinanced or replaced from time to time.
"BANKRUPTCY LAW" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.
"BEARER HOLDER" means, with respect to any Bearer Security or Coupon, the
bearer thereof.
"BEARER SECURITY" means any Security (with or without Coupons), title to
which passes by delivery only, but does not include any Coupons.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such 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.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions are authorized or obligated by
law or executive order to close in New York, New York and, with respect to any
payment of cash or delivery of securities, the place of such payment or
delivery.
"CAPITALIZED LEASE OBLIGATION" of any Person means the 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 GAAP, and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"CAPITAL STOCK" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Securities convertible into an equity
interest), warrants or options to subscribe for or to acquire an equity interest
in such Person; PROVIDED, HOWEVER, that "Capital Stock" shall not include
Redeemable Stock.
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<PAGE>
"CHANGE OF CONTROL" shall be deemed to occur if (i) any "person" or "group"
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act), other than any one or more of the
Permitted Holders, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of 40% or more of the total voting power of all classes
of the Voting Stock of the Company and/or warrants or options to acquire such
Voting Stock, calculated on a fully diluted basis, (ii) the sale, lease,
conveyance or transfer of all or substantially all of the assets of the Company
and its Subsidiaries taken as a whole (other than to any Wholly Owned
Subsidiary) shall have occurred, (iii) the stockholders of the Company shall
have approved any plan of liquidation or dissolution of the Company, (iv) the
Company consolidates with or merges into another Person or any Person
consolidates with or merges into the Company in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is reclassified
into or exchanged for cash, securities or other property, other than any such
transaction where (A) the outstanding Voting Stock of the Company is
reclassified into or exchanged for Voting Stock of the surviving corporation
that is Capital Stock and (B) the holders of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the Voting Stock of the surviving corporation immediately after
such transaction or (v) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Company's Board of Directors
(together with any new directors whose election or appointment by such board or
whose nomination for election by the stockholders of the Company was approved by
a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Company's Board of Directors then in office.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, 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.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at
________________, ______________.
"COUPON" means any interest coupon appertaining to any Bearer Security.
-3-
<PAGE>
"COUPON SECURITY" means any Bearer Security authenticated and delivered
with one or more Coupons appertaining thereto.
"CURRENCY" means Dollars or Foreign Currency.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
"DEFAULT" means any event, act or condition the occurrence of which is, or
after notice or the passage of time or both would be, an Event of Default.
"DEPOSITARY" means, unless otherwise specified by the Company pursuant to
either Section 2.02 or 2.16 with respect to Registered Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, The Depository Trust Company, New York, New York, or any successor
thereto registered as a clearing agency under the Exchange Act or other
applicable statute or regulations.
"DOLLAR" or "$" means such currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.
"DOLLAR EQUIVALENT" means, with respect to any monetary amount in a Foreign
Currency, at any time for the determination thereof, the amount of Dollars
obtained by converting such Foreign Currency involved in such computation into
Dollars at the spot rate for the purchase of Dollars with the applicable Foreign
Currency as quoted by [Bankers Trust Company] (unless another comparable
financial institution is designated by the Company) in New York, New York at
approximately 11:00 a.m. (New York time) on the date two business days prior to
such determination.
"EVENT OF DEFAULT" has the meaning specified in Section 6.01.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as amended.
"EXCHANGE RATE CONTRACT" means, with respect to any Person, any currency
swap agreements, forward exchange rate agreements, foreign currency futures or
options, exchange rate collar agreements, exchange rate insurance and other
agreements or arrangements, or any combination thereof, designed and entered
into in order to provide protection against fluctuations in currency exchange
rates, and entered into in the ordinary course of business of such Person.
"EUROPEAN CURRENCY UNITS" has the meaning assigned to it from time to time
by the Council of the European Communities.
-4-
<PAGE>
"FOREIGN CURRENCY" means a currency issued by the government of any country
other than the United States or a composite currency the value of which is
determined by reference to the values of the currencies of any group of
countries.
"GAAP" means United States generally accepted accounting principles as in
effect on the date of this Indenture, unless stated otherwise.
"GLOBAL SECURITY" means with respect to any series of Securities issued
hereunder, a Security which is executed by the Company and authenticated and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and any Indentures
supplemental hereto, or resolution of the Board of Directors and set forth in an
Officers' Certificate, which shall be registered in the name of the Depositary
or its nominee and which shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, all the Outstanding Securities of
such series or any portion thereof, in either case having the same terms,
including, without limitation, the same original issue date, date or dates on
which principal is due and interest rate or method of determining interest.
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including, without limitation, any Lien on the
assets of such Person securing obligations of the primary obligor and any
obligation of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or to advance or
supply funds for the purchase or payment of) any security for the payment of
such Indebtedness, (ii) to purchase Property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness (and "GUARANTEED,"
"GUARANTEEING" and "GUARANTOR" shall have meanings correlative to the
foregoing); PROVIDED, HOWEVER, that a Guarantee by any Person shall not include
endorsements by such Person for collection or deposit in the ordinary course of
business.
"HOLDER" means the Person in whose name a Security is registered on the
Registrar's books.
"INCUR" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or other obligation on the balance sheet of such Person (and
"INCURRENCE," "INCURRED," "INCURRABLE" and "INCURRING" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that a change in GAAP that
results in an obligation of such Person that exists at such time, and is not
theretofore classified as Indebtedness, becoming Indebtedness
-5-
<PAGE>
shall not be deemed an Incurrence of such Indebtedness. For purposes of this
definition, any non-interest bearing or other discount Indebtedness shall be
deemed to have been Incurred only on the date of the original issuance thereof.
"INDEBTEDNESS" means at any time (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person,
and whether or not contingent, (i) any Obligation of such Person for borrowed
money, (ii) any Obligation of such Person evidenced by bonds, debentures, notes,
Guarantees or other similar instruments, including, without limitation, any such
Obligations incurred in connection with the acquisition of Property, assets or
businesses, (iii) any reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person, (iv) any Obligation of such Person issued or assumed as
the deferred purchase price of Property or services, (v) any Capital Lease
Obligation of such Person, (vi) the maximum fixed redemption or repurchase price
of Redeemable Stock of such Person at the time of determination, (vii) any
payment obligation of such Person under Permitted Hedging Agreements at the time
of determination, (viii) any obligation to pay rent or other payment amounts of
such Person with respect to any Sale and Leaseback Transaction to which such
Person is a party and (ix) any obligation of the type referred to in clauses (i)
through (viii) of this paragraph of another Person and all dividends of another
Person the payment of which, in either case, such Person has Guaranteed or is
responsible or liable, directly or indirectly, as obligor, Guarantor or
otherwise; PROVIDED that Indebtedness shall not include Production Payments and
Reserve Sales. For purposes of this definition, the maximum fixed repurchase
price of any Redeemable Stock that does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture; PROVIDED, HOWEVER, that if
such Redeemable Stock is not then permitted to be repurchased, the repurchase
price shall be the book value of such Redeemable Stock. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional Obligations as described above and the maximum
liability at such date in respect of any contingent Obligations described above.
"INTEREST PAYMENT DATE" means, when used with respect to any Security, the
Stated Maturity of an installment of interest on such Security.
"INTEREST RATE PROTECTION AGREEMENT" means, with respect to any Person, any
interest rate swap agreement, forward rate agreement, interest rate cap or other
rate hedge arrangement to or under which such Person is a party or a
beneficiary.
"ISSUE DATE" means the date upon which Securities of any series first are
issued and authenticated under this Indenture.
-6-
<PAGE>
"LIEN" means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest, lien
(statutory or other), charge, easement, encumbrance, preference, priority or
other security or similar agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"OBLIGATION" means any principal, interest, premium, penalty, fee and any
other liability payable under the documentation governing any Indebtedness.
"OFFICER" means the Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers meeting
the requirements set forth in Section 12.01 and delivered to the Trustee.
"OIL AND GAS BUSINESS" means the business of exploiting, exploring for,
developing, acquiring, producing, processing, gathering, marketing, storing,
transporting, selling, hedging or swapping hydrocarbons or trading positions
with respect thereto and/or with respect to transportation rates or basis
differentials and other related energy businesses.
"OIL AND GAS PURCHASE, SALE AND/OR SWAP CONTRACT" means, with respect to
any Person, any oil and gas purchase, sale and/or swap agreements and other
agreements or arrangements, or any combination thereof, financially tied to oil
and gas prices, transportation or basis fluctuations or differentials that are
customary in the Oil and Gas Business.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"ORDER" or "COMPANY ORDER" means a written order signed in the name of the
Company by an Officer and delivered to the Trustee.
"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 6.02.
-7-
<PAGE>
"OUTSTANDING", when used with respect to any series of Securities, means,
as of the date of determination, all Securities of that series theretofore
authenticated and delivered under this Indenture, except:
(i) Securities of that series theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities of that series 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; 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 of that series which have been paid 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 of any series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
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, 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 an Affiliate of the Company or of such other obligor. In
determining whether the Holders of the requisite principal amount of Outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, the principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding for such purposes shall be the
amount of the principal thereof that would be due and payable as of the date of
such determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 6.02. In determining whether the Holders of the requisite
principal amount of the Outstanding Securities of any series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
the principal amount of a Security denominated in one or more foreign currencies
or currency units that shall be deemed to be Outstanding for such purposes shall
be the Dollar Equivalent, determined in the manner provided
-8-
<PAGE>
as contemplated by Section 2.02 on the date of original issuance of such
Security, of the principal amount (or, in the case of any Original Issue
Discount Security, the Dollar Equivalent on the date of original issuance of
such Security of the amount determined as provided in the preceding sentence
above) of such Security.
"PAYING AGENT" has the meaning specified in Section 2.06.
"PERMITTED HEDGING AGREEMENTS" means Interest Rate Protection Agreements,
Exchange Rate Contracts and Oil and Gas Purchase, Sale and/or Swap Contracts.
"PERMITTED HOLDERS" means Michael S. Smith and (i) his spouse and children,
(ii) any trusts whose sole beneficiaries are Michael S. Smith, his spouse or his
children, (iii) in the event of the death or incompetence of Mr. Smith, his
estate, heirs, executor, administrator, committee or other personal
representative or (iv) any Person so long as Mr. Smith owns at least 51% of the
voting power of all classes of the Voting Stock of such Person.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or government or
any agency or political subdivision thereof or other entity.
"PLACE OF PAYMENT" means, when used with respect to the Securities of any
series, the place or places where the principal of, and premium, if any, and
interest on, the Securities of that series are payable as specified pursuant to
Section 2.02.
"PRINCIPAL AGENT" means the administrative agent(s) (or the institution(s)
performing similar functions) under the Bank Credit Facility.
"PRODUCTION PAYMENTS AND RESERVE SALES" means the grant or transfer to any
Person of a royalty, overriding royalty, net profits interest, production
payment (whether volumetric or dollar denominated), partnership interest or
other interest in oil and gas properties, reserves or the right to receive all
or a portion of the production or the proceeds from the sale of production
attributable to such properties where the holder of such interest has recourse
solely to such production or proceeds of production, subject to the obligation
of the grantor or transferor to operate and maintain, or cause the subject
interests to be operated and maintained, in a reasonably prudent manner or other
customary standard or subject to the obligation of the grantor or transferor to
indemnify for environmental, title or other matters customary in the Oil and Gas
Business.
"PROPERTY" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed or tangible or
intangible, including, without limitation, Capital Stock and other securities
issued by any other Person (but excluding Capital Stock or other securities
issued by such first mentioned Person).
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"REDEEMABLE STOCK" of any Person means any equity security of such Person
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or otherwise (including on the happening of an
event), is or could become required to be redeemed for cash or other Property or
is or could become redeemable for cash or other Property at the option of the
holder thereof, in whole or in part, on or prior to the first anniversary of the
Stated Maturity of the Securities of a particular series; or is or could become
exchangeable at the option of the holder thereof for Indebtedness at any time in
whole or in part, on or prior to the first anniversary of the Stated Maturity of
the Securities of a particular series; PROVIDED, HOWEVER, that "REDEEMABLE
STOCK" shall not include any security by virtue of the fact that it may be
exchanged or converted at the option of the holder for Capital Stock of the
Company having no preferences as to dividends or liquidation over any other
Capital Stock of the Company.
"REGISTERED HOLDER" means the Person in whose name a Registered Security is
registered in the Security Register (as defined in Section 2.07(a)).
"REGISTERED SECURITY" means any Security registered as to principal and
interest in the Security Register (as defined in Section 2.07(a)).
"REGISTRAR" has the meaning specified in Section 2.06.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
series, means the date specified for that purpose as contemplated by Section
2.02.
"REPRESENTATIVE" means any trustee, agent or representative (if any) for
the holders of any Indebtedness that constitutes Senior Indebtedness.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer assigned to the Corporate Trust Office, including any vice president,
assistant vice president, assistant secretary or any other officer of the
Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"SALE AND LEASEBACK TRANSACTION" means, with respect to any Person, any
direct or indirect arrangement (excluding, however, any such arrangement between
such Person and a Wholly Owned Subsidiary of such Person or between one or more
Wholly Owned Subsidiaries of such Person) pursuant to which Property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Subsidiaries.
"SECURITY" has the meaning stated in the first paragraph of this Indenture
and more particularly means any Security of any series authenticated and
delivered under this Indenture.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR INDEBTEDNESS" means the Obligations of the Company with respect to
(i) Indebtedness of the Company under the Bank Credit Facility and any renewal,
refunding, refinancing, replacement or extension thereof and (ii) any other
Indebtedness of the Company (other than the Securities), whether outstanding on
the date of this Indenture or thereafter created, incurred or assumed, and any
renewal, refunding, refinancing, replacement or extension thereof, 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 not be senior in right of payment to the Securities or
that such indebtedness is PARI PASSU with or junior to the Securities; [IF
SUBORDINATED INDEBTEDNESS, INSERT -- PROVIDED, HOWEVER, that any series of
Securities designated as Senior Subordinated Indebtedness shall constitute
Senior Indebtedness to any series of Securities designated as Subordinated
Indebtedness]. Notwithstanding the foregoing, Senior Indebtedness shall not
include (i) Indebtedness of the Company to a Subsidiary of the Company, (ii)
amounts owed for goods, materials or services purchased in the ordinary course
of business, (iii) Indebtedness incurred in violation of this Indenture, (iv)
amounts payable or any other Indebtedness to employees of the Company or any
Subsidiary of the Company, (v) any liability for Federal, state, local or other
taxes owed or owing by the Company, (vi) any Indebtedness of the Company that,
when incurred and without regard to any election under Section 1111(b) of the
United States Bankruptcy Code, was without recourse to the Company, [IF SENIOR
SUBORDINATED INDEBTEDNESS, INSERT -- and (vii) Indebtedness evidenced by the
Securities.]
[If applicable, insert -- "SENIOR SUBORDINATED INDEBTEDNESS" means the
Securities and any other Indebtedness of the Company that specifically provides
that such Indebtedness is to rank PARI PASSU with other Senior Subordinated
Indebtedness of the Company and is not subordinated by its terms to any
Indebtedness of the Company which is not Senior Indebtedness.]
"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Subsidiary of a Person that, together with its Subsidiaries, (A) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of such Person and its Subsidiaries or (B) as of the end
of such fiscal year, was the owner of more than 10% of the consolidated assets
of such Person and its Subsidiaries.
"SPECIFIED SENIOR INDEBTEDNESS" means Indebtedness of the Company under the
Bank Credit Facility.
"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 as the fixed date on which the principal of such security or such
installment of principal or interest is due and payable, including pursuant to
any mandatory redemption provision (but excluding any provision providing for
the
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repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company that
specifically provides that such Indebtedness is to rank PARI PASSU with other
Subordinated Indebtedness of the Company and is not subordinated by its terms to
any Indebtedness of the Company which is not Senior Indebtedness or Senior
Subordinated Indebtedness.
"SUBSIDIARY" of a Person means (i) another Person which is a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned or
controlled by (A) the first Person, (B) the first Person and one or more of its
Subsidiaries or (C) one or more of the first Person's Subsidiaries or (ii)
another Person which is not a corporation (A) at least 50% of the ownership
interest of which and (B) the power to elect or direct the election of a
majority of the directors or other governing body of which are controlled by
Persons referred to in clause (i)(A), (i)(B) or (i)(C) above.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provision of this Indenture, and thereafter "Trustee" shall mean such
successor Trustee. 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.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code as in
effect from time to time.
"UNITED STATES ALIEN" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more members of which is, for United States Federal
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income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian, with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt; PROVIDED, HOWEVER, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"VOTING STOCK" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a Subsidiary all of the
Voting Stock of which (except directors' qualifying shares) is at the time
owned, directly or indirectly, by the Company and its other Wholly Owned
Subsidiaries.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities of any series.
"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 and any other
obligor on the indenture securities.
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All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them by such definitions.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) 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;
(7) provisions apply to successive events and transactions; and
(8) references to agreements and other instruments include subsequent
amendments and waivers but only to the extent not prohibited by this
Indenture.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities and Coupons, if any, of each
series shall be in substantially the form as shall be established, without the
approval of any Holder, by or pursuant to Board Resolutions of the Board of
Directors of the Company 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 any law or the
rules of any securities exchange or to conform to general usage or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities of
any series
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is established by action taken pursuant to such Board Resolutions, a copy of an
appropriate record of such action 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 Order contemplated by Section 2.02 for the authentication
and delivery of such Securities.
The definitive Securities of each series and Coupons, 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
and Coupons, as evidenced by their execution of such Securities and Coupons.
Each Bearer Security and each Coupon shall bear a legend substantially
to the following effect: "Any United States Person who holds this obligation
will be subject to limitations under the United States Federal income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
SECTION 2.02. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued from time to time in one or more series. All
Securities of each series under this Indenture shall in all respects be equally
and ratably entitled to the benefits hereof with respect to such series without
preference, priority or distinction on account of the actual time of the
authentication and delivery or Stated Maturity of the Securities of such series.
There shall be established in or pursuant to Board Resolutions of the Company
and set forth, or determined in the manner provided, in an Officers' Certificate
of the Company, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series:
(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(b) 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 the provisions of this Indenture);
(c) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security is
registered at the close of business on the Regular Record Date for such
interest;
(d) the date or dates on which the principal of the Securities of the
series is payable;
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(e) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by
which such rate or rates are determined, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable on any Securities and the Regular Record Date for
any interest payable on any Interest Payment Date, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;
(f) the place or places, if any, in addition to or instead of the
Corporate Trust Office of the Trustee (in the case of Registered
Securities) or the principal __________ office of the Trustee (in the case
of Bearer Securities) where the principal of and any premium and interest
on the Securities of the series shall be payable;
(g) whether Securities of the series are to be issued as Registered
Securities or Bearer Securities or both, and, if Bearer Securities are to
be issued, whether Coupons will be attached thereto, whether Bearer
Securities of the series may be exchanged for Registered Securities of the
series and the circumstances under which and the places at which any such
exchanges, if permitted, may be made;
(h) if any Securities of the series are to be issued as Bearer
Securities or as one or more Global Securities representing individual
Bearer Securities of the series, (i) whether the provisions of Sections
3.02 and 4.03 or other provisions for payment of additional interest or tax
redemptions shall apply and, if other provisions shall apply, such other
provisions; (ii) whether interest in respect of any portion of a temporary
Bearer Security of the series (delivered pursuant to Section 2.08) payable
in respect of any interest payment date prior to the exchange of such
temporary Bearer Security for definitive Bearer Securities of the series
shall be paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which
any such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date; and (iii) the terms upon which a temporary Bearer Security
may be exchanged for one or more definitive Bearer Securities of the
series;
(i) the period or periods within which, the price or prices 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 and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Securities shall be evidenced;
(j) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund, purchase fund or
analogous obligation or at the option of a Holder thereof and the period or
periods within which, the price or prices 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;
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(k) if other than denominations of U.S. $1,000 and any integral
multiple thereof, the denominations in which Securities of the series shall
be issuable;
(l) the currency, currencies or currency unit or units in which the
Securities of such series shall be denominated and in which payment of the
principal of and any premium and interest on any Securities of such series
shall be payable if other than the currency of the United States of America
and the manner of determining the equivalent thereof in the currency of the
United States of America for purposes of the definition of Dollar
Equivalent.
(m) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined by reference to
an index, formula or other method, including, without limitation, such
method based on (i) currency, currencies or currency units other than that
in which the Securities of such series are payable, (ii) changes in the
price of one or more other securities or groups or indices of securities,
or (iii) changes in the prices of one or more commodities or groups or
indexes of commodities or any combination of the foregoing, the manner in
which such amounts shall be determined and any commodities, currencies,
currency units or indices, value, rate or price relevant to such
determination;
(n) if the principal of or any premium or interest on any Securities
of the series are to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the period or periods within which, and the
terms and conditions upon which, such election is to be made and the amount
so payable or the manner in which such amount shall be determined;
(o) 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
6.02 or provable in bankruptcy pursuant to Section 6.09;
(p) if the principal amount payable at the Stated Maturity of any
Securities of the series is not determinable upon original issuance thereof
or as of any date prior to Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such date
for any other purpose hereunder, including the principal amount thereof
which shall be due and payable upon any maturity other than the Stated
Maturity or which shall be deemed to be Outstanding as of any date (or, in
any such case, the manner in which such principal amount shall be
determined);
(q) if applicable, that the Securities of the series shall be subject
to either or both of legal defeasance or covenant defeasance as provided in
Article 8 and the addition of additional covenants that may be subject to
covenant defeasance thereunder; PROVIDED THAT no series of
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Securities that is convertible into or exchangeable for any other securities
pursuant to Section 2.02(s) shall be subject to legal defeasance pursuant to
Section 8.03;
(r) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 2.16 and
any circumstances other than those set forth in Section 2.07 in which any
such Global Security may be transferred to, and registered and exchanged
for Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which any
such transfer may be registered;
(s) the terms and conditions, if any, pursuant to which the Securities
are convertible into or exchangeable at the option of the Holders thereof
or the Company, for or into new Securities of a different series, other
Securities of the same series of the same aggregate principal amount of a
different kind or different authorized denomination or denominations, or
other securities or other property, including shares of Common Stock of the
Company or any Subsidiaries of the Company or securities directly or
indirectly convertible into or exchangeable for such shares including the
extent to which the provisions of Article 11 are incorporated as part of
the Securities of such series, and any additions or deletions therefrom;
(t) if applicable, any covenants in addition to those set forth in
Article 4 to which the Company may be subject with respect to Securities of
such series; or any other additions, deletions or changes to the provisions
of Article 4 or any definitions relating to such Article that shall be
applicable to the Securities of the series (including a provision making
any Section of such Article inapplicable to the Securities of such series
or conditioning any merger, conveyance, transfer or lease permitted by
Article 5 upon the satisfaction of an Indebtedness coverage standard by the
Company and the Surviving Entity (as defined in Article 5));
(u) any trustees, authenticating or paying agents, transfer agents or
registrars;
(v) the terms, if any, of the transfer, mortgage, pledge or assignment
as security for the Securities of the series of any properties, assets,
moneys, proceeds, securities or other collateral, including whether certain
provisions of the TIA are applicable and any corresponding changes to
provisions of this Indenture as currently in effect;
(w) the terms, if any, of any Guarantee of the payment of principal
of, and premium, if any, and interest on, Securities of the series and any
corresponding additions to the provisions of this Indenture to provide for
such Guarantee;
(x) the subordination, if any, of the Securities of the series and/or
any Guarantee thereof pursuant to Article 10 or otherwise and any changes
or additions to Article 10;
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(y) with regard to Securities of the series that do not bear interest,
the dates for certain required reports to the Trustee;
(z) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other
changes to the Events of Default set forth herein that shall be applicable
to the Securities of such series (including a provision making any Event of
Default set forth herein inapplicable to the Securities of that series) and
any change in the right of the Trustee or the Holders to declare the
principal of, and premium and interest on, such Securities due and payable;
(aa) provisions, if any, regarding the appointment by the Trustee of
an authenticating agent in one or more places other than the location of
the office of the Trustee with power to act on behalf of the Trustee and
subject to its direction in the authentication and delivery of the
Securities of any one or more series in connection with such transactions
as shall be specified in the provisions of this Indenture or in or pursuant
to the Board Resolution or other supplemental indenture creating such
series;
(bb) the provisions for the payment of any additional amounts, to the
extent not set forth herein;
(cc) whether the provisions of Section 4.04 shall apply in respect of
such series; and
(dd) any other terms of the series, which shall not be inconsistent
with the provisions of this Indenture.
All Securities of any one series and the Coupons, if any, appertaining
thereto, shall be substantially identical except as to denomination and except
as may otherwise be provided in or pursuant to the Board Resolutions of the
Company referred to above and set forth, or determined in the manner provided,
in the Officers' Certificate referred to above or in any such indenture
supplemental hereto. All Securities of any one series and the Coupons, if any,
appertaining thereto need not be issued at the same time and, unless otherwise
provided, a series may be reopened for issuances of additional Securities of
such series.
If any of the terms of the series are established by action taken pursuant
to Board Resolutions of the Company, a copy of an appropriate record of such
action 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' Certificates setting forth the terms of the series.
SECTION 2.03. EXECUTION OF SECURITIES. The Securities and the Coupons, if
any, shall be signed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer or a Vice
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President and by its Secretary, an Assistant Secretary, a Treasurer or an
Assistant Treasurer. Such signatures upon the Securities and Coupons may be the
manual or facsimile signatures of the present or any future such authorized
officers and may be imprinted or otherwise reproduced on the Securities and
Coupons. The seal of the Company, if any, may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities and Coupons.
Only such Securities and Coupons as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited, signed manually
by the Trustee, shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee upon any Security
or Coupon executed by the Company shall be conclusive evidence that the Security
or Coupon so authenticated has been duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any of the
Securities or Coupons shall cease to be such officer before the Securities or
Coupons so signed shall have been authenticated and delivered by the Trustee, or
disposed of by the Company, such Securities or Coupons nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Securities or Coupons had not ceased to be such officer of the Company; and any
Security or Coupon may be signed on behalf of the Company by such Persons as, at
the actual date of the execution of such Security or Coupon, shall be the proper
officers of the Company, although at the date of such Security or Coupon or of
the execution of this Indenture any such Person was not such officer.
SECTION 2.04. AUTHENTICATION AND DELIVERY OF SECURITIES. At any time and
from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities, with appropriate Coupons, if any, of any series
executed by the Company to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Securities and Coupons to or upon an
Order by the Company. In authenticating such Securities and Coupons, and
accepting the additional responsibilities under this Indenture in relation to
such Securities and Coupons, the Trustee shall be entitled to receive, and
(subject to Section 7.01) shall be fully protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of Directors,
certified by the Secretary or Assistant Secretary of the Company,
authorizing the terms of issuance of any series of Securities and Coupons;
(2) an executed supplemental Indenture, if any;
(3) an Officers' Certificate; and
(4) an Opinion of Counsel prepared in accordance with Section 12.01
which shall also state that the form of such Securities and Coupons has
been established by or pursuant
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to a resolution of the Board of Directors or by a supplemental Indenture as
permitted by Section 2.02 in conformity with the provisions of this
Indenture.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate Securities and Coupons, if any, of any series.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Registrar, paying
agent or agent for service of notices and demands.
Unless otherwise provided in the form of Security for any series, each
Security shall be dated the date of its authentication.
SECTION 2.05. DENOMINATION OF SECURITIES. Unless otherwise provided in the
form of Security for any series, the Securities of each series shall be issuable
only as Registered Securities in such denominations as shall be specified or
contemplated by Section 2.02. In the absence of any such specification with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 2.06. REGISTRAR AND PAYING AGENT. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "REGISTRAR") and an office or agency where Securities may
be presented for payment (the "PAYING AGENT"). Unless and until otherwise
determined by the Company by resolution of the Board of Directors, the register
of the Company for the purpose of registration, exchange or registration of
transfer of the Registered Securities shall be kept at the Corporate Trust
Office of the Trustee and, for this purpose, the Trustee shall be designated
"Registrar". The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may have one or more co-registrars and one or
more additional paying agents; PROVIDED, HOWEVER, that so long as
____________________ shall be the Trustee, without the consent of the Trustee,
there shall be no more than one Registrar or Paying Agent. The term "PAYING
AGENT" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the names and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to
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appropriate compensation therefor pursuant to Section 7.07. The Company or any
of its domestically incorporated Wholly Owned Subsidiaries may act as Paying
Agent, Registrar, co-registrar or transfer agent.
SECTION 2.07. REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Company shall keep or cause to be kept a register for each
series of Registered Securities issued hereunder (hereinafter 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 the transfer of Registered
Securities as in this Article II provided. At all reasonable times the
Security Register shall be open for inspection by the Trustee. The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Holders. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee, in
writing at least five Business Days before each Interest Payment Date and
at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders. Subject to Section 2.16, upon due presentment for
registration of transfer of any Registered Security at any office or agency
to be maintained by the Company in accordance with the provisions of
Section 4.05, the Company shall execute and the Trustee shall authenticate
and deliver in the name of the transferee or transferees a new Registered
Security or Registered Securities of authorized denominations for a like
aggregate principal amount. In no event may Registered Securities,
including Registered Securities received in exchange for Bearer Securities,
be exchanged for Bearer Securities.
Registered Securities of any series (other than a Global Security,
except as set forth below) may be exchanged for a like aggregate principal
amount of Registered Securities of the same series of other authorized
denominations. Subject to Section 2.16, Registered Securities to be
exchanged shall be surrendered at the office or agency to be maintained by
the Company as provided in Section 4.05, and the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor the
Registered Security or Registered Securities which the Holder making the
exchange shall be entitled to receive.
At the option of the Holder of Bearer Securities of any series, except
as otherwise specified as contemplated by Section 2.02(h) or 2.02(r) with
respect to a Global Security representing Bearer Securities, Bearer
Securities of such series may be exchanged for Registered Securities (if
the Securities of such series are issuable as Registered Securities) or
Bearer Securities of the same series, of any authorized denomination or
denominations, of like tenor and aggregate principal amount, upon surrender
of the Bearer Securities to be exchanged at the office or agency of the
Company maintained for such purpose, with all unmatured Coupons and all
matured Coupons in Default thereto appertaining; PROVIDED, HOWEVER, that
delivery of a Bearer Security shall occur only outside the United States.
If such Holder is unable to produce any such unmatured Coupon or
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Coupons or matured Coupon or Coupons in Default, such exchange may be
effected if such Holder's Bearer Securities are accompanied by payment in
funds acceptable to the Company and the Trustee in an amount equal to the
face amount of such missing Coupon or Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if
there be furnished to them such security or indemnity as they may require
to save each of them and any paying agent harmless. If thereafter such
Holder shall surrender to any paying agent any such missing Coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; PROVIDED, HOWEVER, that,
except as otherwise provided in Section 2.13, 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.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States
income tax laws and regulations applicable to Securities in effect at the
time of such exchange.
(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed or be accompanied
by a written instrument or instruments of transfer, in form satisfactory to
the Company, the Trustee and the Registrar, duly executed by the Registered
Holder or his attorney duly authorized in writing.
All Securities issued in exchange for or upon transfer 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 for such exchange or transfer.
No service charge shall be made for any exchange or registration of
transfer of Securities (except as provided by Section 2.09), but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto, other than
those expressly provided in this Indenture to be made at the Company's own
expense or without expense or without charge to the Holders.
The Company shall not be required (a) to issue, register the transfer
of or exchange any Securities for a period of 15 days next preceding any
mailing of notice of redemption of Securities of such series or (b) to
register the transfer of or exchange any Securities selected, called or
being called for redemption; PROVIDED, HOWEVER, that, if specified pursuant
to Section 2.02, any Bearer Securities of any series that are exchangeable
for Registered Securities and that are called for redemption pursuant to
Section 3.02 may, to the extent permitted by applicable law, be exchanged
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for one or more Registered Securities of such series during the period
preceding the redemption date therefor.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, any paying agent or any Registrar may
deem and treat the Person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of, and premium, if any, and interest on, such Security and for
all other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, any Paying Agent or Registrar shall be
affected by notice to the contrary.
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or any Registrar will have any responsibility or liability for any
aspect of the records relating to, or payments made on account of,
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 2.08. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, the Company may execute and the Trustee shall
authenticate and deliver temporary Securities (printed, lithographed,
photocopied, typewritten or otherwise produced) of any authorized denomination,
and substantially in the form 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 or without Coupons, and with such omissions, insertions and
variations as may be appropriate for temporary Securities and Coupons, all as
may be determined by the Company with the concurrence of the Trustee. Temporary
Securities and Coupons may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Security shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
Except as otherwise specified as contemplated by Section 2.02(h)(iii) with
respect to a series of Securities issuable as Bearer Securities or as one or
more Global Securities representing individual Bearer Securities of the series,
(a) 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 at a Place of Payment for such series, without
charge to the Holder thereof, except as provided in Section 2.07 in connection
with a transfer and except that a Person receiving definitive Bearer Securities
shall bear the cost of insurance, postage, transportation and the like unless
otherwise specified pursuant to Section 2.02, and (b) 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
and of like tenor; PROVIDED, HOWEVER, that
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no definitive Bearer Security shall be delivered in exchange for a temporary
Registered Security; and PROVIDED, FURTHER, that delivery of a Global Security
representing individual Bearer Securities or a Bearer Security shall occur only
outside the United States. Until so exchanged, temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series, except as otherwise specified
as contemplated by Section 2.02(h)(ii) with respect to the payment of interest
on Global Securities in temporary form.
Unless otherwise specified pursuant to Section 2.02, the Company will
execute and deliver each definitive Global Security representing individual
Bearer Securities and each Bearer Security to the Trustee at its principal
office in __________ or such other place outside the United States specified
pursuant to Section 2.02.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Securities represented thereby
pursuant to Section 2.07 or this Section 2.08, the temporary Global Security
shall be endorsed by the Trustee to reflect the reduction of the principal
amount evidenced thereby, whereupon the principal amount of such temporary
Global Security shall be reduced for all purposes by the amount so exchanged and
endorsed.
SECTION 2.09. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. If (i) any
mutilated Security or any mutilated Coupon with the Coupon Security to which it
appertains (and all unmatured Coupons attached thereto) is surrendered to the
Trustee at its Corporate Trust Office (in the case of Registered Securities) or
at its principal _________ office (in the case of Bearer Securities) or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security or any Coupon, and there is delivered
to the Company and the Trustee such security or indemnity as may be required by
them to save each of them and any Paying Agent harmless, and neither the Company
nor the Trustee receives notice that such Security or Coupon has been acquired
by a bona fide purchaser, then the Company shall execute and, upon a Company
Order, the Trustee shall authenticate and deliver, if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Security or in exchange for the
Coupon Security to which such mutilated, destroyed, lost or stolen Coupon
appertained, a new Security of the same series of like tenor, form, terms and
principal amount, bearing a number not contemporaneously Outstanding, and, in
the case of a Coupon Security, with such Coupons attached thereto that neither
gain nor loss in interest shall result from such exchange or substitution. If
required by the Trustee or the Company, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced. Upon the
issuance of any substituted Security, 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 connected therewith. In case any
Security or Coupon which has matured or is about to mature or which has been
called for redemption shall
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become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substituted Security or Coupon, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated Security or
Coupon) if the applicant for such payment shall furnish the Company and the
Trustee with such security or indemnity as either may require to save it
harmless from all risk, however remote, and, in case of destruction, loss or
theft, evidence to the satisfaction of the Company and the Trustee of the
destruction, loss or theft of such Security or Coupon and of the ownership
thereof; PROVIDED, HOWEVER, that payment of principal of, and premium, if any,
and interest on, Bearer Securities or Coupons shall, except as otherwise
provided in Section 2.13, be payable only at an office or agency located outside
the United States.
Every substituted Security of any series, with its Coupons, if any, issued
pursuant to the provisions of this Section 2.09 by virtue of the fact that any
Security or Coupon is destroyed, lost or stolen shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security or Coupon shall be found at any time, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series and Coupons, if any, duly issued
hereunder. All Securities and Coupons, if any, shall be held and owned upon the
express condition that the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities or
Coupons, and shall preclude any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.10. CANCELLATION OF SURRENDERED SECURITIES. The Company at any
time may deliver Securities to the Trustee for cancellation. All Securities
surrendered for payment, redemption, registration of transfer or exchange and
all Coupons surrendered for payment or exchange shall, if surrendered to the
Company or any Paying Agent or a Registrar, be delivered to the Trustee for
cancellation by it, or if surrendered to the Trustee, shall be canceled by it,
and no Securities or Coupons shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee and no one
else shall cancel and destroy (subject to the record retention requirements of
the Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and certification of their destruction shall
be delivered to the Company, unless otherwise directed. On request of the
Company, the Trustee shall deliver to the Company canceled Securities and
Coupons held by the Trustee. If the Company shall acquire any of the Securities
or Coupons, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented thereby unless and until the same
are delivered or surrendered to the Trustee for cancellation. The Company may
not issue new Securities or Coupons to replace Securities or Coupons it has
redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.11. PROVISIONS OF THE INDENTURE AND SECURITIES FOR THE SOLE
BENEFIT OF THE PARTIES AND THE HOLDERS. Nothing in this Indenture or in the
Securities or Coupons, expressed or implied, shall give or be construed to give
to any Person, other than the parties hereto, the Holders or any
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Registrar or Paying Agent, any legal or equitable right, remedy or claim under
or in respect of this Indenture, or under any covenant, condition or provision
herein contained; all its covenants, conditions and provisions being for the
sole benefit of the parties hereto, the Holders and any Registrar and Paying
Agents.
SECTION 2.12. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due date
of the principal and interest on any Security, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed by the
Paying Agent. Upon complying with this Section, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
SECTION 2.13. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any Registered Security that is payable and is
punctually paid or duly provided for on any Interest Payment Date shall be
paid to the Person in whose name such Registered Security is registered at
the close of business on the Regular Record Date for such interest
notwithstanding the cancellation of such Registered Security upon any
transfer or exchange subsequent to the Regular Record Date. In case a
Coupon Security of any series is surrendered in exchange for a Registered
Security of such series after the close of business (at an office or agency
in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next
succeeding Interest Payment Date, such Coupon Security shall be surrendered
without the Coupon relating to such Interest Payment Date and interest will
not be payable on such Interest Payment Date in respect of the Registered
Security issued in exchange for such Coupon Security, but will be payable
only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture. Payment of interest on Registered Securities
shall be made at the Corporate Trust Office of the Trustee (except as
otherwise specified pursuant to Section 2.02), or at the option of the
Company, by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or, if provided pursuant
to Section 2.02 and in accordance with arrangements satisfactory to the
Trustee, at the option of the Registered Holder by wire transfer to an
account designated by the Registered Holder.
(b) No interest shall be payable with respect to a Bearer Security or
Coupon unless such certification requirements as are specified pursuant to
Section 2.02(h)(iii) are satisfied with respect to such Bearer Security or
Coupon. Interest on any Coupon Security that is payable and is punctually
paid or duly provided for on any Interest Payment Date shall be paid to the
Holder of the Coupon that has matured on such Interest Payment Date upon
surrender of such Coupon on such
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Interest Payment Date at the principal __________ office of the Trustee or
at such other place of payment outside the United States specified pursuant
to Section 2.02.
Interest on any Bearer Security (other than a Coupon Security) that is
payable and is punctually paid or duly provided for on any Interest Payment
Date shall be paid to the Holder of the Bearer Security upon presentation
of such Bearer Security and notation thereon on such Interest Payment Date
at the principal __________ office of the Trustee or at such other Place of
Payment outside the United States specified pursuant to Section 2.02.
Unless otherwise specified pursuant to Section 2.02, at the direction
of the Holder of any Bearer Security or Coupon payable in Dollars, and
subject to applicable laws and regulations, payments in respect of such
Bearer Security or Coupon will be made by check drawn on a bank in New
York, New York or, in accordance with arrangements satisfactory to the
Trustee, by wire transfer to a Dollar account maintained by such Holder
with a bank outside the United States. If such payment at the offices of
all Paying Agents outside the United States becomes illegal or is
effectively precluded because of the imposition of exchange controls or
similar restrictions on the full payment or receipt of such amounts in
Dollars, then, to the extent permitted by United States tax law, the
Company will appoint an office or agent in the United States at which such
payment may be made. Unless otherwise specified pursuant to Section 2.02,
at the direction of the Holder of any Bearer Security or Coupon payable in
a Foreign Currency, payment on such Bearer Security or Coupon will be made
by a check drawn on a bank outside the United States or, in accordance with
arrangements satisfactory to the Trustee, by wire transfer to an
appropriate account maintained by such Holder outside the United States.
Except as provided in this paragraph, no payment on any Bearer Security or
Coupon will be made by mail to an address in the United States or by
transfer to an account in the United States.
(c) Subject to the foregoing provisions of this Section 2.13 and
Section 2.17, each Security of a particular series delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of
any other Security of the same series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 2.14. SECURITIES DENOMINATED IN FOREIGN CURRENCIES.
(a) Except as otherwise specified pursuant to Section 2.02 for Bearer
Securities of any series, payment of the principal of, and premium, if any,
and interest on, Bearer Securities of such series denominated in any
Currency will be made in such Currency.
(b) Except as otherwise specified pursuant to Section 2.02 for
Registered Securities of any series, payment of the principal of, and
premium, if any, and interest on, Registered Securities of such series will
be made in Dollars.
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(c) For the purposes of calculating the principal amount of Securities
of any series denominated in a Foreign Currency or Foreign Currencies
(including European Currency Units) for any purpose under this Indenture,
the principal amount of such Securities at any time Outstanding shall be
deemed to be the Dollar Equivalent of such principal amount as of the date
of any such calculation.
In the event any Foreign Currency or Currencies in which any payment
with respect to any series of Securities may be made ceases to be a freely
convertible Currency on United States Currency markets, for any date
thereafter on which payment of principal of, or premium, if any, or
interest on, the Securities of a series is due, the Company shall select
the Currency of payment for use on such date, all as provided in the
Securities of such series. In such event, the Company shall, as provided in
the Securities of such series, notify the Trustee of the Currency which it
has selected to constitute the funds necessary to meet the Company's
obligations on such payment date and of the amount of such Currency to be
paid. Such amount shall be determined as provided in the Securities of such
series. The payment to the Trustee with respect to such payment date shall
be made by the Company solely in the Currency so selected.
SECTION 2.15. WIRE TRANSFERS. Notwithstanding any other provision to the
contrary in this Indenture, the Company may make any payment of monies required
to be deposited with the Trustee on account of principal of, or premium, if any,
or interest on, the Securities (whether pursuant to optional or mandatory
redemption payments, interest payments or otherwise) by wire transfer in
immediately available funds to an account designated by the Trustee on or before
the date such moneys are to be paid to the Holders of the Securities in
accordance with the terms hereof.
SECTION 2.16. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Section 2.02 that the
Securities of a particular series are to be issued in whole or in part in
the form of one or more Global Securities, then the Company shall execute
and the Trustee or its agent shall, in accordance with Section 2.04,
authenticate and deliver, such Global Security or Securities, which (i)
shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, the Outstanding Securities of such series to
be represented by such Global Security or Securities, or such portion
thereof as the Company shall specify in an Officer's Certificate, (ii)
shall be registered in the name of the Depositary for such Global Security
or Securities or its nominee, (iii) shall be delivered by the Trustee or
its agent to the Depositary or pursuant to the Depositary's instruction and
(iv) shall bear a legend substantially to the following effect: "Unless and
until it is exchanged in whole or in part for the individual Securities
represented hereby, this Global Security 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", or such other legend as may then be required
by the Depositary for such Global Security or Securities.
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(b) Notwithstanding any other provision of this Section 2.16 or of
Section 2.07 to the contrary, and subject to the provisions of paragraph
(c) below, unless the terms of a Global Security expressly permit such
Global Security to be exchanged in whole or in part for definitive
Securities in registered form, a Global Security may be transferred, in
whole but not in part and in the manner provided in Section 2.07, only by
the Depositary to a nominee of the Depositary for such Global Security, or
by a nominee of the Depositary to the Depositary or another nominee of the
Depositary, or by the Depositary or a nominee of the Depositary to a
successor Depositary for such Global Security selected or approved by the
Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security or
Securities notifies the Company that it is unwilling or unable to continue
as Depositary for such Global Security or Securities or if at any time the
Depositary for the Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute,
rule or regulation, the Company shall appoint a successor Depositary with
respect to such Global Security or Securities. If a successor Depositary
for such Global Security or Securities is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of
such ineligibility, the Company shall execute, and the Trustee or its
agent, upon receipt of a Company Order for the authentication and delivery
of such individual Securities of such series in exchange for such Global
Security, will authenticate and deliver, individual Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for
such Global Security or Securities.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued
or issuable in the form of one or more Global Securities shall no
longer be represented by such Global Security or Securities. In such
event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of individual
Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Securities
of such series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such
series or portion thereof in exchange for such Global Security or
Securities.
(iii) If specified by the Company pursuant to Sections 2.02 with
respect to Securities issued or issuable in the form of a Global
Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual
Securities of such series of like tenor and terms in definitive form
on such terms as are acceptable to the Company, the Trustee and such
Depositary. Thereupon the Company shall execute, and the Trustee or
its agent upon receipt of a Company Order for the authentication and
delivery of definitive Securities of such series shall authenticate
and deliver, without service charge, (1) to each Person specified by
such Depositary a new Security or Securities of the same series of
like tenor and terms and of any authorized denomination as requested
by such Person in aggregate principal
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amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and (2) to such Depositary a new Global
Security of like tenor and terms and in an authorized denomination
equal to the difference, if any, between the principal amount of the
surrendered Global Security and the aggregate principal amount of
Securities delivered to Holders thereof.
(iv) In any exchange provided for in this subsection (c), the
Company will execute and the Trustee or its agent will authenticate
and deliver individual Securities. In case a Coupon Security of any
series is surrendered in exchange for a Registered Security of such
series after the close of business (at an office or agency in a place
of payment for such series) on any special record date and before the
opening of business (at such office or agency) on the related proposed
date of payment of Defaulted Interest, such Coupon Security shall be
surrendered without the Coupon relating to such proposed date of
payment and Defaulted Interest will not be payable on such proposed
date of payment in respect of the Registered Security issued in
exchange for such Coupon Security, but will be payable only to the
Holder of such Coupon when due in accordance with the provisions of
this Indenture. Upon the exchange of the entire principal amount of a
Global Security for individual Securities, such Global Security shall
be canceled by the Trustee or its agent. Except as provided in
subsection (c)(iii), Registered Securities issued in exchange for a
Global Security pursuant to this Section 2.16 shall be registered in
such names and in such authorized denominations as the Depositary for
such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee or the
Registrar. The Trustee or the Registrar shall deliver such Registered
Securities to the Persons in whose names such Registered Securities
are so registered.
(v) Payments in respect of the principal of and interest on any
Securities registered in the name of the Depositary or its nominee
will be payable to the Depositary or such nominee in its capacity as
the registered owner of such Global Security. The Company and the
Trustee may treat the Person in whose name the Securities, including
the Global Security, are registered as the owner thereof for the
purpose of receiving such payments and for any and all other purposes
whatsoever. None of the Company, the Trustee, any Registrar, the
Paying Agent or any agent of the Company or the Trustee will have any
responsibility or liability for (a) any aspect of the records relating
to or payments made on account of the beneficial ownership interests
of the Global Security by the Depositary or its nominee or any of the
Depositary's direct or indirect participants, or for maintaining,
supervising or reviewing any records of the Depositary, its nominee or
any of its direct or indirect participants relating to the beneficial
ownership interests of the Global Security, (b) the payments to the
beneficial owners of the Global Security of amounts paid to the
Depositary or its nominee, or (c) any other matter relating to the
actions and practices of the Depositary, its nominee or any of its
direct or indirect participants. None of the Company, the Trustee or
any such agent will be liable for any delay by the Depositary, its
nominee, or any of its direct or indirect participants in identifying
the beneficial owners of the Securities, and the Company and the
Trustee may conclusively rely on, and will be protected in relying on,
instructions from the
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Depositary or its nominee for all purposes (including with respect to
the registration and delivery, and the respective principal amounts,
of the Securities to be issued).
The Trustee shall deliver individual Bearer Securities issued in
exchange for a Global Security pursuant to this Section 2.16 to the
Persons and in such authorized denominations as the Depositary for
such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee;
PROVIDED, HOWEVER, that individual Bearer Securities shall be
delivered in exchange for a Global Security only in accordance with
the procedures as may be specified pursuant to Section 2.02.
Notwithstanding the foregoing, the exchange of Bearer Securities
for Registered Securities will be subject to the provisions of United
States income tax laws and regulations applicable to Securities in
effect at the time of such exchange.
SECTION 2.17. DEFAULTED INTEREST.
(a) Any interest on any Security of a particular series which is
payable, but is not punctually paid or duly provided for, on the dates and
in the manner provided in the Securities of such series and in this
Indenture (herein called "Defaulted Interest") shall, if such Security is a
Registered Security, forthwith cease to be payable to the Registered Holder
thereof on the relevant record date by virtue of having been such
Registered Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series 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 such 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 pre-paid, to
each Holder thereof at its address as it appears in the Security
Register, not less than 10 days prior to such special record date.
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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 are registered at the close of business on
such special record date. In case a Coupon Security of any such series
is surrendered in exchange for a Registered Security of such series
after the close of business (at an office or agency in a Place of
Payment for such series) on any special record date and before the
opening of business (at such office or agency) on the related proposed
date of payment of Defaulted Interest, such Coupon Security shall be
surrendered without the Coupon relating to such proposed date of
payment and Defaulted Interest will not be payable on such proposed
date of payment in respect of the Registered Security issued in
exchange for such Coupon Security, but will be payable only to the
Holder of such Coupon when due in accordance with the provisions of
this Indenture.
(ii) The Company may make payment of any Defaulted Interest on
the Registered Securities of such series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which the Registered Securities of such series 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.
(b) Any Defaulted Interest payable in respect of Bearer Securities of
any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities
of such series, and notice of the payment date therefor shall be given by
the Trustee, in the name and at the expense of the Company, in the manner
provided in Section 14.05 not more than 25 days and not less than 20 days
prior to the date of the proposed payment.
SECTION 2.18. JUDGMENTS. The Company may provide pursuant to Section 2.02
for Securities of any series that (a) the obligation, if any, of the Company to
pay the principal of, and premium, if any, and interest on, the Securities of
any series in a Foreign Currency or Dollars (the "Designated Currency") as may
be specified pursuant to Section 2.02 is of the essence and agrees that, to the
fullest extent possible under applicable law, judgments in respect of Debt
Securities of such series shall be given in the Designated Currency; (b) the
obligation of the Company to make payments in the Designated Currency of the
principal of, and premium, if any, and interest on, such Securities shall,
notwithstanding any payment in any other Currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
Designated Currency that the Holder receiving such payment may, in accordance
with normal banking procedures, purchase with the sum paid in such other
Currency (after any premium and cost of exchange) on the business day in the
country of issue of the Designated Currency or in the international banking
community (in the case of a composite currency) immediately following the day on
which such Holder receives such payment; (c) if the amount in the Designated
Currency that may be so
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purchased for any reason falls short of the amount originally due, the Company
shall pay such additional amounts as may be necessary to compensate for such
shortfall; and (d) any obligation of the Company not discharged by such payment
shall be due as a separate and independent obligation and, until discharged as
provided herein, shall continue in full force and effect.
SECTION 2.19. CUSIP NUMBERS. The Company in issuing the Securities of any
series 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, HOWEVER, 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.
SECTION 2.20. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's Certificate of Authentication on all Securities authenticated by the
Trustee shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
As Trustee
By
-----------------------------------------
Authorized Signature
ARTICLE 3
REDEMPTION
SECTION 3.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their Stated Maturity except as otherwise specified as contemplated by Section
2.02 for Securities of such series.
SECTION 3.02. TAX REDEMPTION; SPECIAL TAX REDEMPTION.
(a) Unless otherwise specified pursuant to Section 2.02, Bearer
Securities of any series may be redeemed at the option of the Company in
whole, but not in part, at any time, on
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giving not less than 30 or more than 60 days' notice in accordance with
Section 3.05 (which notice shall be irrevocable), at the redemption price
thereof (calculated without premium), if the Company has or will become
obligated to pay additional interest on such Bearer Securities pursuant to
Section 4.03 as a result of any change in, or amendment to, the laws (or
any regulations or rulings promulgated thereunder) of the United States or
any political subdivision or taxing authority thereof or therein, or any
change in the application or official interpretation of such laws,
regulations or rulings, which change or amendment becomes effective on or
after the date on which any Person (including any Person acting as
underwriter, broker or dealer) agrees to purchase any of such Bearer
Securities pursuant to their original issuance, and such obligation cannot
be avoided by the Company taking reasonable measures available to it;
PROVIDED, that no such notice of redemption shall be given earlier than 90
days prior to the earliest date on which the Company would be obligated to
pay such additional interest were a payment in respect of the Bearer
Securities of that series then due. Prior to the publication of any notice
of redemption pursuant to this Section 3.02(a), the Company shall deliver
to the Trustee (i) an Officers' Certificate stating that the Company is
entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Company so to
redeem have occurred and (ii) an Opinion of Counsel to the effect that the
Company has or will become obligated to pay such additional interest as a
result of such change or amendment.
(b) Unless otherwise specified pursuant to Section 2.02, if the
Company shall determine that any payment made outside the United States by
the Company or any of its paying agents in respect of any Bearer Security
or Coupon would, under any present or future laws or regulations of the
United States, be subject to any certification, documentation, information
or other reporting requirement of any kind, the effect of which requirement
is the disclosure to the Company, any paying agent or any governmental
authority of the nationality, residence or identity of a beneficial owner
of such Bearer Security or Coupon that is a United States Alien (other than
such a requirement (i) that would not be applicable to a payment made by
the Company or any one of its paying agents (A) directly to the beneficial
owner or (B) to a custodian, nominee or other agent of the beneficial
owner, or (ii) that can be satisfied by such custodian, nominee or other
agent certifying to the effect that the beneficial owner is a United States
Alien; PROVIDED, that, in any case referred to in clause (i)(B) or (ii),
payment by the custodian, nominee or agent to the beneficial owner is not
otherwise subject to any such requirement), then the Company shall elect
either (x) to redeem such Bearer Security or Coupon in whole, but not in
part, at the redemption price thereof (calculated without premium) or (y)
if the conditions of the next succeeding paragraph are satisfied, to pay
the additional interest specified in such paragraph. The Company shall make
such determination as soon as practicable and publish prompt notice thereof
(the "Determination Notice"), stating the effective date of such
certification, documentation, information or other reporting requirement,
whether the Company elects to redeem the Bearer Security or Coupon or to
pay the additional interest specified in the next succeeding paragraph and
(if applicable) the last date by which the redemption of the Bearer
Security or Coupon must take place, as provided in the next succeeding
sentence. If any Bearer Security or Coupon is to be redeemed pursuant to
this paragraph, the
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redemption shall take place on such date, not later than one year after the
publication of the Determination Notice, as the Company shall specify by
notice given to the Trustee at least 60 days before the redemption date.
Notice of such redemption shall be given by the Company to the Holders of
the Bearer Security or Coupon not more than 60 days or less than 30 days
prior to the redemption date. Notwithstanding the foregoing, the Company
shall not so redeem the Bearer Security or Coupon if the Company shall
subsequently determine, not less than 30 days prior to the redemption date,
that subsequent payments on the Bearer Security or Coupon would not be
subject to any such certification, documentation, information or other
reporting requirement, in which case the Company shall publish prompt
notice of such subsequent determination, and any earlier redemption notice
given pursuant to this paragraph shall be revoked and of no further effect.
Prior to the publication of any Determination Notice pursuant to this
paragraph, the Company shall deliver to the Trustee (i) an Officers'
Certificate stating that the Company is entitled to make such determination
and setting forth a statement of facts showing that the conditions
precedent to the obligation of the Company to redeem the Bearer Security or
Coupon or to pay the additional interest specified in the next succeeding
paragraph have occurred and (ii) an Opinion of Counsel to the effect that
such conditions have occurred.
If and so long as the certification, documentation, information or
other reporting requirement referred to in the preceding paragraph would be
fully satisfied by payment of a backup withholding tax or similar charge,
the Company may elect to pay as additional interest such amounts as may be
necessary so that every net payment made outside the United States
following the effective date of such requirement by the Company or any of
its paying agents in respect of any Bearer Security or Coupon of which the
beneficial owner is a United States Alien (but without any requirement that
the nationality, residence or identity of such beneficial owner be
disclosed to the Company, any paying agent or any governmental authority),
after deduction or withholding for or on account of such backup withholding
tax or similar charge that (i) would not be applicable in the circumstances
referred to in the parenthetical clause of the first sentence of the
preceding paragraph or (ii) is imposed as a result of presentation of any
such Bearer Security or Coupon for payment more than 15 days after the date
on which such payment became due and payable or on which payment thereof
was duly provided for, whichever occurred later), will not be less than the
amount provided in any such Bearer Security or Coupon to be then due and
payable. If the Company elects to pay additional interest pursuant to this
paragraph, the Company shall have the right to redeem the Bearer Security
or Coupon at any time in whole, but not in part, at the redemption price
thereof (calculated without premium), subject to the provisions of the last
three sentences of the immediately preceding paragraph. If the Company
elects to pay additional interest pursuant to this paragraph and the
condition specified in the first sentence of this paragraph should no
longer be satisfied, then the Company shall redeem the Bearer Security or
Coupon in whole, but not in part, at the redemption price thereof
(calculated without premium), subject to the provisions of the last three
sentences of the immediately preceding paragraph. Any redemption payments
made by the Company pursuant to the two immediately preceding sentences
shall be subject to the continuing obligation of the Company to pay
additional interest pursuant to this paragraph. If the Company elects to,
or is
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required to, redeem the Bearer Security or Coupon pursuant to this
paragraph, it shall publish prompt notice thereof. If the Bearer Security
or Coupon is to be redeemed pursuant to this paragraph, the redemption
shall take place on such date, not later than one year after publication of
the notice of redemption, as the Company shall specify by notice to the
Trustee at least 60 days prior to the redemption date.
SECTION 3.03. NOTICES TO TRUSTEE. If the Company elects to redeem all or
any part of the Securities of any series in accordance with their terms, it
shall notify the Trustee in writing of the redemption date, the principal amount
of Securities to be redeemed and the series and terms of the Securities pursuant
to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.04. SELECTION OF SECURITIES TO BE REDEEMED. If fewer than all the
Securities of a series are to be redeemed, the Trustee shall select the
Securities of such series to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Securities of such series
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities of such series that have denominations
larger than $1,000. Securities and portions of them that the Trustee selects
shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.05. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a date for redemption of Securities of any series, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities of
such series to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent where payment will be made
upon presentation and surrender of Securities;
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(4) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(5) that, unless otherwise specified in such notice, Coupon Securities of
any series, if any, surrendered for redemption must be accompanied by all
Coupons maturing subsequent to the date fixed for redemption, failing which the
amount of any such missing Coupon or Coupons will be deducted from the
redemption price;
(6) if the Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on the applicable redemption date pursuant to Section 2.16(c) or otherwise, the
last date on which such exchanges may be made;
(7) the terms of the Securities of that series pursuant to which the
Securities of that series are being redeemed;
(8) if fewer than all the outstanding Securities are to be redeemed, the
identification and principal amounts of the particular Securities to be
redeemed;
(9) that, unless the Company defaults in making such redemption payment or
the Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date, and, in the case
of Original Issue Discount Securities, original issue discount accrued after the
date fixed for redemption will cease to accrue, and Coupons for interest
appertaining to Coupon Securities to be redeemed shall be void; and
(10) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section at least
45 days before the redemption date.
The notice if given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to
the Holder of any Security of a series designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security of such series.
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SECTION 3.06. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
mailed, Securities of a series called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date. If any
Security called for redemption shall not be so paid upon surrender thereof on
such redemption date, the principal, premium, if any, and interest shall bear
interest until paid from the redemption date at the rate borne by the Securities
of that series. If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
applicable redemption date, the redemption price for such Coupon Security may be
reduced by an amount equal to the face amount of all such missing Coupons. If
thereafter the Holder of such Coupon shall surrender to any paying agent outside
the United States 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. The surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any paying
agent harmless.
SECTION 3.07. DEPOSIT OF REDEMPTION PRICE. Prior to the redemption date,
the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money in the
Currency in which such Securities are denominated sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed on
that date other than Securities or portions of Securities or Coupons called for
redemption which have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.08. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered and, in
the case of a Bearer Security, with appropriate Coupons attached.
SECTION 3.09. MANDATORY AND OPTIONAL SINKING FUNDS. The minimum amount of
any sinking fund payment provided for by the terms of Securities of any series,
resolution of the Board of Directors or a supplemental Indenture 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,
resolution of the Board of Directors or a supplemental Indenture is herein
referred to as an "optional sinking fund payment".
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any Securities of a series in cash, the Company may at its
option (a) deliver to the Trustee Securities of that series (together with the
unmatured Coupons, if any, appertaining thereto) theretofore purchased or
otherwise acquired by the Company or (b) receive credit for the principal amount
of Securities of that 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
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to the terms of such Securities, resolution or supplemental Indenture; 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, resolution or supplemental Indenture for
redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.
SECTION 3.10. 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, any resolution or supplemental Indenture, the portion
thereof, if any, which is to be satisfied by payment of cash in the Currency in
which the Securities of such series are denominated (except as provided pursuant
to Section 2.02) and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to this Section 3.10
(which Securities, if not previously redeemed, will accompany such certificate)
and whether the Company intends to exercise its right to make any permitted
optional sinking fund payment with respect to such series. Such certificate
shall be irrevocable and upon its delivery the Company shall be obligated to
make the cash payment or payments therein referred to, if any, on or before the
next succeeding sinking fund payment date. Failure of the Company to deliver
such certificate (or to deliver the Securities and Coupons, if any, specified in
this paragraph) shall not constitute a Default, but such failure shall require
that the sinking fund payment due on the next succeeding sinking fund payment
date for that series shall be paid entirely in cash and shall be sufficient to
redeem the principal amount of such Securities subject to a mandatory sinking
fund payment without the option to deliver or credit Securities as provided in
this Section 3.10 and without the right to make any optional sinking fund
payment, if any, with respect to such series.
The Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.04 and the Company shall
cause notice of the redemption thereof to be given in the manner provided in
Section 3.05 except that the notice of redemption shall also state that the
Securities are being redeemed by operation of the sinking fund. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in this Article 3.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay the
principal of and interest on the Securities of each series on the dates and in
the manner provided in the Securities and in this Indenture and pay any Coupons
at the place at the respective times and in the manner provided herein, in the
Securities and in the Coupons. Any interest due on Coupon Securities on
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or before the Stated Maturity of the related Security, other than additional
interest, if any, payable as provided in Section 4.03 in respect of principal
of, or premium, if any, on such a Security, shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. Principal and interest shall
be considered paid on the date due if on such date the Trustee or a Paying Agent
holds in accordance with this Indenture money sufficient to pay in the Currency
in which the Securities of such series are denominated, all principal and
interest then due and, in the case of Securities subordinated pursuant to the
terms of Article 10, the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.02. COMMISSION REPORTS. So long as any Securities are
Outstanding, the Company will file with the Commission and furnish to the
Holders of Securities all quarterly and annual financial information required to
be contained in a filing with the Commission on Forms 10-Q and 10-K, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual consolidated financial statements
only, a report thereon by the Company's independent auditors. Notwithstanding
that the Company may not be required to remain subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file
with the Commission and provide the Trustee and Holders with such annual reports
and such information, documents and other reports as are specified in such
Sections and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections; PROVIDED, HOWEVER, that the Company shall not be required to file
any report, document or other information with the Commission if the Commission
does not permit such filing.
SECTION 4.03. PAYMENT OF ADDITIONAL INTEREST. Unless otherwise provided
pursuant to Section 2.02, the provisions of this Section 4.03 shall be
applicable to Bearer Securities of any series.
The Company will, subject to the exceptions and limitations set forth
below, pay as additional interest to the Holder of any Bearer Security or Coupon
that is a United States Alien such amounts as may be necessary so that every net
payment on such Bearer Security or Coupon, after deduction or withholding for or
on account of any present or future tax, assessment or other governmental charge
imposed upon or as a result of such payment by the United States (or any
political subdivision or taxing authority thereof or therein), will not be less
than the amount provided
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in such Bearer Security or Coupon to be then due and payable. However, the
Company will not be required to make any such payment of additional interest for
or on account of:
(a) any tax, assessment or other governmental charge that would not
have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor or
beneficiary of, or a Person holding a power over, such Holder, if such
Holder is an estate or a trust, or a member or shareholder of such Holder,
if such Holder is a partnership or corporation) and the United States,
including such Holder (or such fiduciary, settlor, beneficiary, Person
holding a power, member or shareholder) being or having been a citizen or
resident thereof or being or having been engaged in trade or business or
present therein or having or having had a permanent establishment therein
or (ii) such Holder's past or present status for United States Federal
income tax purposes as a personal holding company, foreign personal holding
company or private foundation or other tax-exempt organization with respect
to the United States or as a corporation that accumulates earnings to avoid
United States Federal income tax;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge that would not
have been imposed but for the presentation by the Holder of a Bearer
Security or Coupon for payment more than 15 days after the date on which
such payment became due and payable or on which payment thereof was duly
provided for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by deduction or withholding from a payment on a Bearer
Security or Coupon;
(e) any tax, assessment or other governmental charge that would not
have been imposed but for a failure to comply with applicable
certification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the
United States of the Holder or beneficial owner of a Bearer Security or
Coupon if, without regard to any tax treaty, such compliance is required by
statute or regulation of the United States as a precondition to relief or
exemption from such tax, assessment or other governmental charge; or
(f) any tax, assessment or other governmental charge imposed on a
Holder that actually or constructively owns ten percent or more of the
combined voting power of all classes of stock of the Company or that is a
controlled foreign corporation related to the Company through stock
ownership;
nor shall additional interest be paid with respect to a payment on a Bearer
Security or Coupon to a Holder that is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent a beneficiary or settlor
with respect to such fiduciary or a member of such partnership or
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a beneficial owner would not have been entitled to the additional interest had
such beneficiary, settlor, member or beneficial owner been the Holder of such
Bearer Security or Coupon.
Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of, or premium, if any, or interest on, any Security or payment
with respect to any Coupon of any series, such mention shall be deemed to
include mention of the payment of additional interest (if applicable) provided
for in the terms of such Securities and this Section 4.03 to the extent that, in
such context, additional interest is, was or would be payable in respect thereof
pursuant to the provisions of this Section 4.03 and express mention of the
payment of additional interest (if applicable) in any provisions hereof shall
not be construed as excluding additional interest in those provisions hereof
where such express mention is not made.
If the payment of additional interest becomes required in respect of the
Securities or Coupons of a series, at least ten days prior to the first Interest
Payment Date with respect to which such additional interest will be payable (or
if the Securities of that series will not bear interest prior to Stated
Maturity, the first day on which a payment of principal, and premium, if any, is
made and on which such additional interest will be payable), and at least ten
days prior to each date of payment of principal, and premium, if any, or
interest if there has been any change with respect to the matters set forth in
the below-mentioned Officers' Certificate, the Company will furnish to the
Trustee and each Paying Agent an Officer's Certificate that shall specify by
country the amount, if any, required to be withheld on such payments to Holders
of Securities or Coupons that are United States Aliens, and the Company will pay
to the Trustee or such Paying Agent the additional interest, if any, required by
the terms of such Securities and this Section 4.03. 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 4.03.
SECTION 4.04. CHANGE OF CONTROL.
(a) If, pursuant to the provisions of Section 2.02(cc), this Section
4.04 is to be applicable to Securities of a series, upon the occurrence of
a Change of Control, each Holder of Securities of a series as to which,
pursuant to the designation made in accordance with Section 2.02, this
Section 4.04 is applicable, shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Securities pursuant to the offer described below
(the "CHANGE OF CONTROL OFFER") at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the purchase date (the "CHANGE OF CONTROL PAYMENT").
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder stating, among other things: (i) that a Change
of Control has occurred and a
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Change of Control Offer is being made pursuant to this Indenture and that
all Securities (or portions thereof) properly tendered will be accepted for
payment; (ii) the purchase price and the purchase date, which shall be,
subject to any contrary requirements of applicable law, no fewer than 30
days nor more than 60 days from the date the Company notifies the Holders
of the occurrence of the Change of Control (the "CHANGE OF CONTROL PAYMENT
DATE"); (iii) that any Securities (or portions thereof) accepted for
payment (and duly paid on the Change of Control Payment Date) pursuant to
the Change of Control Offer shall cease to accrue interest after the Change
of Control Payment Date; (iv) that any Securities (or portions thereof) not
properly tendered will continue to accrue interest; (v) a description of
the transaction or transactions constituting the Change of Control; (vi)
the procedures that Holders of Securities must follow in order to tender
their Securities (or portions thereof) for payment and the procedures that
Holders of Securities must follow in order to withdraw an election to
tender Securities (or portions thereof) for payment; and (vii) all other
instructions and materials necessary to enable Holders to tender Securities
pursuant to the Change of Control Offer.
(c) On the Change of Control Payment Date, the Company will (i) accept
for payment Securities or portions thereof properly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent in
immediately available funds an amount equal to the Change of Control
Payment in respect of Securities or portions thereof so tendered and (iii)
deliver, or cause to be delivered, to the Trustee the Securities so
accepted together with an Officers' Certificate listing the Securities or
portions thereof tendered to the Company and accepted for payment. The
Paying Agent shall promptly mail to each Holder of Securities so accepted
payment in an amount equal to the Change of Control Payment for such
Securities and the Trustee shall promptly authenticate and mail to each
holder a new Security in a principal amount equal to any unpurchased
portion of the Securities surrendered, if any; provided, that each such new
Security shall be in a principal amount of $1,000 or any integral multiple
thereof. The Company will announce publicly the results of a Change in
Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(d) The Company will comply, to the extent applicable, with the
requirements of Rules 13e-4 and 14e-1 under the Exchange Act, and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the purchase of Securities in
connection with a Change of Control. To the extent that the provisions of
any securities laws or regulations conflict with the provisions relating to
the Change of Control Offer, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations described above by virtue thereof.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain
in each Place of Payment for any series of Securities and Coupons, if any, an
office or agency where Securities and Coupons of such series (but, except as
otherwise provided in Section 2.13, unless such Place of Payment is located
outside the United States, not Bearer Securities or Coupons) may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the
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Securities and Coupons of such series and this Indenture may be served. So long
as any Bearer Securities of any series remain Outstanding, the Company will
maintain for such purposes one or more offices or agencies outside the United
States in such city or cities specified pursuant to Section 2.02 and, if any
Bearer Securities are listed on a securities exchange that requires an office or
agency for the payment of principal of, and premium, if any, or interest on,
such Bearer Securities in a location other than the location of an office or
agency specified pursuant to Section 2.02, the Company will maintain for such
purposes an office or agency in such location so long as any Bearer Securities
are listed on such securities exchange and such exchange so requires. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee (in he case of Registered Securities) and at the principal __________
office of the Trustee (in the case of Bearer Securities), and the Company hereby
appoints the Trustee its agent to receive all presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more different or
additional offices or agencies (in or outside of The City of New York) where
Securities may be presented or surrendered for any or all of such purposes, and
may from time to time rescind such designations; PROVIDED that no such
designation or rescission shall in any manner relieve the Company of its
obligations described in the preceding paragraph. The Company shall give prompt
written notice to the Trustee of any such designation and any change in the
location of any such other office or agency.
SECTION 4.06. MONEY FOR THE SECURITY PAYMENTS TO BE HELD IN TRUST. If the
Company, any Subsidiary of the Company or any of their respective Affiliates
shall at any time act as Paying Agent with respect to the Securities of any
series, such Paying Agent shall, on or before each due date of the principal of
(and premium, if any) or interest on any of the Securities, segregate and hold
in trust for the benefit of the Persons entitled thereto money sufficient to pay
the principal (and premium, if any) or interest so becoming due until such money
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect to
the Securities, it shall, prior to or on each due date of the principal of (and
premium, if any) or interest on any of the Securities, 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, and (unless such Paying Agent
is the Trustee) the Paying Agent shall promptly notify the Trustee of the
Company's action or failure so to act.
Any funds deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Securities and
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remaining unclaimed for two years after the date upon which such payment shall
have become due, shall be paid to the Company on Order or, if then held by the
Company, shall be discharged from such trust; PROVIDED, HOWEVER, that the
Company shall cause to be published at least once in a newspaper of general
circulation in The City of New York or mailed to each Holder entitled to such
unclaimed funds, notice that such funds remain unclaimed and that, after a date
specified therein, which shall be a date not less than 30 days from the date of
such publication or mailing, any unclaimed balance of such money remaining as of
such date shall be repaid to the Company. After repayment to the Company,
Holders entitled to such funds shall look only to the Company for payment
without interest thereon, as an unsecured general creditor, and the Trustee and
the Paying Agent shall have no further liability with respect to such trust
money, and the Company shall not be a trustee in respect of such funds.
SECTION 4.07. PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any of its Subsidiaries or upon the income,
profits or property of the Company or any of its Subsidiaries and (b) 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 of its
Subsidiaries; PROVIDED 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 and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made.
SECTION 4.08. CORPORATE EXISTENCE. The Company will preserve and keep in
full force and effect its corporate existence in accordance with applicable law,
except as permitted in Section 5.01.
SECTION 4.09. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.10. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
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SECTION 4.11. PROHIBITION ON COMPANY BECOMING INVESTMENT COMPANY. The
Company shall not become an "investment company" as defined in the Investment
Company Act of 1940, as amended.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. MERGER, CONSOLIDATION AND SALE OF SUBSTANTIALLY ALL ASSETS.
(a) The Company (i) will not merge or consolidate with or into any
other Person (whether or not the Company is the surviving entity), and (ii)
will not and will not permit its Subsidiaries to, directly or indirectly,
sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all of the Property of the Company and its Subsidiaries taken
as a whole in any one transaction or a series of transactions (including,
without limitation, dispositions pursuant to mergers and consolidations),
in each case unless:
(A) the Surviving Entity shall be a corporation organized and
existing under the laws of the United States of America or a State
thereof or the District of Columbia;
(B) if the Company is not the Surviving Entity, the Surviving
Entity expressly assumes, by supplemental indenture satisfactory to
the Trustee, executed and delivered to the Trustee by the Surviving
Entity, the due and punctual payment of the principal of, premium, if
any, and interest on all the Securities and Coupons, if any, according
to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed
by the Company (and in the case of clause (ii) above, the Company and
the Surviving Entity shall both be considered as the issuer of the
Securities);
(C) in the case of the sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all of the
Property of the Company and its Subsidiaries taken as a whole, such
Property shall have been transferred as an entirety or virtually as an
entirety to one Person;
(D) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis, no Default
or Event of Default shall have occurred and be continuing;
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(E) the Company and, if the Company is not the Surviving Entity,
the Surviving Entity, each shall have delivered to the Trustee
Officers' Certificates and an Opinion of Counsel, each stating that
such merger, consolidation or disposition and any such supplemental
indentures comply with the above provisions and that all conditions
precedent relating to such transaction or transactions have been
complied with; and
(F) the Surviving Entity waives any right to redeem any Bearer
Security under circumstances in which the Surviving Entity would be
entitled to redeem such Bearer Security but the Company would not have
been so entitled to redeem if the consolidation, merger, conveyance,
transfer or lease had not occurred.
The term "SURVIVING ENTITY" shall mean the Person referred to in clauses
(i) and (ii) above (1) formed by or surviving any such merger or consolidation
involving the Company or (2) to which any such sale, transfer, assignment,
lease, conveyance or other disposition is made.
(b) With respect to each transaction or series of transactions
described in subsection (a) above, giving effect to such transaction or
series of transactions on a pro forma basis shall include, without
limitation, (i) treating any Indebtedness not previously the obligation of
the Company or any of its Subsidiaries which becomes an obligation of the
Company or any of its Subsidiaries in connection with or as a result of
such transaction or series of transactions as having been Incurred at the
time of such transaction or series of transactions, and (ii) giving effect
to any Indebtedness Incurred or anticipated to be Incurred in connection
with such transaction or series of transactions.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. Whenever used herein, an "EVENT OF
DEFAULT" 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):
(a) the Company shall fail to make any payment of interest on the
Securities of any series or any payment with respect to the related
Coupons, if any, within 30 days after any such amount becomes due in
accordance with the terms thereof;
(b) the Company shall fail to make any payment of principal of (or
premium, if any, on) the Securities of any series when due in accordance
with the terms thereof, whether upon
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maturity, acceleration, sinking fund payment date, call for redemption,
call for purchase or otherwise;
(c) the Company shall fail to observe or perform any other covenant or
agreement contained in the Securities of any series or this Indenture and
such failure continues for a period of 90 days after written notice of such
failure has been sent to the Company by the Trustee specifying such default
and requiring it to be remedied and stating that such notice is a "Notice
of Default";
(d) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case or files a request or petition for
a writ of execution to initiate bankruptcy proceedings or have itself
adjudicated as bankrupt;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(iv) makes a general assignment for the benefit of its creditors;
or
(v) proposes or agrees to an accord or composition in bankruptcy
between itself and its creditors; or
(e) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of the property of the Company
or any Significant Subsidiary;
(iii) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
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(iv) adjudicates the Company or a Significant Subsidiary as
bankrupt or insolvent; or
(v) ratifies an accord or composition in bankruptcy between the
Company or a Significant Subsidiary and the respective creditors
thereof;
and the order or decree remains unstayed and in effect for 60 days.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of
Default described in clause (e) or (f) above) with respect to Securities of a
series at the time Outstanding shall occur and be continuing, either the Trustee
or the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series by written notice may declare the principal amount of
the Securities of that series (or, if the Securities of that series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) and interest on all the Securities of
that series to be due and payable immediately. If an Event of Default described
in clause (d) or (e) above with respect to the Securities of a series at the
time Outstanding shall occur, the principal amount (or, if the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) and interest
on all the Securities of that series will automatically, and without any action
by the Trustee or any Holder, become immediately due and payable.
After any such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series may rescind and annul such acceleration if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursement and advances of the
Trustee, its agents and counsel,
(ii) all overdue installments of interest on all Securities of
such series;
(iii) the principal of (and premium, if any, on ) any Securities
of such series that have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in the Securities of such series, and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate prescribed therefor in the
Securities of such series;
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(b) all Events of Default, other than the nonpayment of principal of
Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.04;
(c) the annulment of such acceleration would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the Trustee
to the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities of a series or to enforce the
performance of any provision of the Securities of such series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities of a series by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security of such series or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in principal
amount of the Securities of a series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders, it being understood that the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudiced to such Holders, or would involve the Trustee in personal liability;
PROVIDED, HOWEVER, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee
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shall be entitled to indemnification satisfactory to it in its sole discretion
against all losses and expenses caused by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS. No Holder of any Securities or Coupons
of any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or a trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written
notice of a continuing Event of Default with respect to a series of
Securities;
(ii) the Holders of at least 25% in aggregate principal amount of
the Outstanding Securities of such Series have made written request,
and such Holder or Holders have offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee; and
(iii) the Trustee has failed to institute such proceeding, and
has not received from the Holders of a majority in aggregate principal
amount of the Outstanding Securities of such series a direction
inconsistent with such request, within 60 days after such notice,
request and offer.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities of any series held by such Holder,
on or after the respective due dates expressed in the Securities, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified
in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together with interest on any unpaid
interest to the extent lawful) and the amounts provided for in Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Holders allowed in any
judicial proceedings relative to the Company, its creditors or its property and,
unless prohibited by law or applicable regulations, may vote on behalf of the
Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of
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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 its counsel, and any other amounts due the Trustee under
Section 7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order, at the date or dates fixed by the Trustee for the distribution
of such moneys or other property, upon presentation of the several Securities or
Coupons of such series in respect of which moneys or other property have been
collected, and the notation thereon of the payment, if only partially paid, and
upon surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 7.07;
[If applicable: SECOND: to holders of Senior Indebtedness of the
Company to the extent required by Article 10;]
THIRD: In case the principal of the Outstanding Securities in respect
of which such moneys have been collected shall not have become due, to the
payment of interest on the Securities or Coupons of such series in the
order of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the rate or yield to maturity (in
the case of Original Issue Discount Securities) borne by the Securities or
Coupons of such series, such payments to be made ratably to the Persons
entitled thereto, without discrimination or preference;
FOURTH: In case the principal of the Outstanding Securities in respect
of which such moneys have been collected shall have become due, by
declaration or otherwise, to the payment of the whole amount then owing and
unpaid upon the Securities or Coupons of such series for principal and
premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest at the rate or yield
to maturity (in the case of Original Issue Discount Securities) borne by
the Securities or Coupons of such series; and, in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Securities and Coupons of such series, then to the payment of such
principal and premium, if any, and interest, without preference or priority
of principal and premium, if any, over interest, or of interest over
principal and premium, if any, or of any installment of interest over any
other installment of interest, or of any Security or Coupon of such series
over any Security or Coupon of such series, ratably to the aggregate of
such principal and premium, if any, and interest; and
FIFTH: to the Company.
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The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section. At least 15 days before such record date, the
Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee or a
suit by a Holder pursuant to Section 6.07.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise 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 Person
would exercise or use under the circumstances in the conduct of such
Person's own affairs.
(b) Except during the continuance of an Event of Default:
(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. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this subsection does not limit the effect of subsection (b)
of this Section;
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(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur 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 to believe that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(h) 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 and to the provisions of the
Trust Indenture Act.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, Officer's Certificate, or other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Holders of not less
than a majority in aggregate principal amount of the Securities then
outstanding; provided, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Company
or, if advanced by the Trustee, shall be repaid by the Company upon demand.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions, or agreements on
the part of the Company, except as otherwise set forth herein, but the
Trustee may require of the Company full information and advice as to the
performance of the covenants, conditions and agreements contained herein
and shall be entitled in connection herewith to examine the books, records
and premises of the Company.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
(j) Except for (i) a default under Section 6.01(a) or (b) hereof, or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not
be deemed to have notice of any Default or Event of Default unless
specifically notified in writing of such event by the Company or the
Holders of not less than 25% in aggregate principal amount of the relevant
series of Securities then Outstanding; as used herein, the term "actual
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knowledge" means the actual fact or statement of knowing, without any duty
to make any investigation with regard thereto.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in this Indenture or in any document issued in connection with
the sale of the Securities of any series or in the Securities of any series
other than the Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to each Holder notice of
the Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Security (including payments pursuant
to the mandatory redemption provisions of such Security, if any), the Trustee
may withhold the notice if and so long as the Trustee in good faith determines
that withholding the notice is in the interests of Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as practicable
after each ______ beginning with the ______ following the date of this
Indenture, and in any event prior to _______ in each year, the Trustee shall
mail to each Holder a brief report dated as of such date that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Sections 313(b) and
313(c).
A copy of each report at the time of its mailing to Holders shall be filed
with the Commission and each stock exchange (if any) on which the Securities of
any series are listed. The Company agrees to notify the Trustee promptly
whenever the Securities of any series become listed on any stock exchange and of
any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee promptly upon request from time to time the compensation for its
services as agreed to by the Trustee and the Company. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's agents, counsel,
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accountants and experts. The Company shall indemnify the Trustee against any and
all loss, liability or reasonable expense (including reasonable attorneys' fees)
incurred by it in connection with the acceptance and administration of this
trust and the performance of its duties hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith. The Company need not pay for any
settlement made by the Trustee without the Company's consent, such consent not
to be unreasonably withheld.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall survive
the discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01 (d) or (e) with respect to the
Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE. The Company may,
but need not, appoint a separate Trustee for any one or more series of
Securities. The Trustee may resign with respect to one or more or all series of
Securities at any time by notifying the Company. The Holders of a majority in
principal amount of the Securities of a particular series may remove the Trustee
for such series by notifying the Trustee and may appoint a successor Trustee.
The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities of a particular series and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
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A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders of Securities
of each applicable series. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities of any applicable series may petition
any court of competent jurisdiction for the appointment of a successor Trustee
for the Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of Securities
of any applicable series may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee for the
Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all times
satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any 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
TIA Section 310(b)(1) are met.
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. APPLICABILITY OF ARTICLE. If, pursuant to Section 2.02,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are Registered Securities and denominated and payable
only in Dollars (except as provided pursuant to Section 2.02), then the
provisions of this Article 8 relating to defeasance of Securities shall be
applicable except as otherwise specified pursuant to Section 2.02 for Securities
of such series. Defeasance provisions, if any, for Securities denominated in a
Foreign Currency or for Bearer Securities may be specified pursuant to Section
2.02.
SECTION 8.02. DISCHARGE OF LIABILITY ON SECURITIES.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities of any series for cancellation (other than Securities or Coupons
replaced pursuant to Article 2, Coupons appertaining to Bearer Securities
of such series called for redemption and maturing after the relevant
redemption date, surrender of which has been waived, and Securities and
Coupons for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company as provided in Section 8.05), or (ii) all
outstanding Securities and the Coupons, if any, of such series have become
due and payable, whether at maturity or as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof and the Company
irrevocably deposits with the Trustee cash in the Currency in which such
Securities are denominated, U.S. Government Obligations or a combination
thereof sufficient to pay at maturity or upon redemption all outstanding
Securities of such series, including premium and interest thereon to
maturity or such redemption date (other than Securities replaced pursuant
to Article 2), and premium, if any, and if in either case the Company pays
all other sums payable hereunder by the Company, then this Indenture shall,
subject to Sections 8.02(b), cease to be of further effect. The Trustee
shall acknowledge satisfaction and discharge of this Indenture on demand of
the Company accompanied by an Officers' Certificate and an Opinion of
Counsel and at the cost and expense of the Company.
(b) Notwithstanding subsection (a) above, the Company's obligations in
Sections 2.06, 2.07, 2.09, 2.12, 4.03, 7.07, 7.08, 8.06, 8.07 and 8.08
shall survive until the Securities of such series have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.06 and 8.07 shall
survive.
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SECTION 8.03. DEFEASANCE.
(a) Subject to Sections 8.03(d), 8.04 and 8.07, the Company at any
time may terminate, with respect to Securities of a particular series, (i)
all its obligations under the Securities of such series and this Indenture
with respect to the Securities of such series ("LEGAL DEFEASANCE OPTION")
or (ii) its obligations with respect to the Securities of such series under
Sections 4.02, 4.04, and 4.07, and the operation of Sections 5.01(a)(G),
6.01(c), 6.01(d), 6.01(e), and 6.01(f) ("COVENANT DEFEASANCE OPTION"). The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
(b) If the Company exercises its legal defeasance option, payment of
the Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of
Default specified in Sections 6.01(c), 6.01(d), 6.01(e) and 6.01(f).
(c) Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(d) Notwithstanding subsection (a) above, the Company's obligations in
Sections 2.06, 2.07, 2.09, 2.12, 7.07, 7.08, 8.06, 8.07 and 8.08 shall
survive until the Securities of the defeased series have been paid in full.
Thereafter, the Company's obligations in Section 7.07, 8.06 and 8.07 shall
survive.
SECTION 8.04. CONDITIONS TO DEFEASANCE. The Company may exercise its legal
defeasance option or its covenant defeasance option with respect to Securities
of a particular series only if:
(1) the Company irrevocably deposits in trust with the Trustee
cash in U.S. dollars, U.S. Government Obligations or a combination
thereof for the payment of principal of, interest on and premium, if
any, on the Securities of such series to maturity or redemption, as
the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal, premium
and interest when due on all the Securities of such series to maturity
or redemption, as the case may be;
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(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(d) or (e) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of Securities of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have 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 Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Securities of such series as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities of such series at a future date
in accordance with Article 3.
SECTION 8.05. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal, premium and interest on the Securities and Coupons, if
any, of the defeased series. In the event the Securities and Coupons, if any, of
the
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defeased series are subordinated pursuant to Article 10, money and securities so
held in trust are not subject to Article 10.
SECTION 8.06. REPAYMENT TO COMPANY. The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon Order any money held by them for the
payment of principal of, premium, if any, or interest on any Securities that
remains unclaimed for two years after the date upon which such payment shall
have become due; PROVIDED, HOWEVER, that the Company shall cause to be published
at least once in a newspaper of general circulation in The City of New York or
mailed to each Holder entitled to such unclaimed funds, notice that such funds
remain unclaimed and that, after a date specified therein, which shall be a date
not less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money remaining as of such date shall be repaid to the
Company. After repayment to the Company, Holders entitled to such funds shall
look only to the Company for payment without interest thereon, as an unsecured
general creditor, and the Trustee and the Paying Agent shall have no further
liability with respect to such money.
SECTION 8.07. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall pay
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.08. REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 8
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 and the
Securities of the defeased series shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of Securities of the
defeased series 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 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
(a) The Company and the Trustee may enter into an Indenture or
Indentures supplemental hereto or amend the Securities without notice to or
consent of any Holder:
(i) to cure any ambiguity, omission, defect or inconsistency
herein, in any supplemental Indenture or in any Security of any
series;
(ii) to provide for the assumption of the obligations of the
Company under this Indenture upon the merger, consolidation or sale or
other disposition of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole and certain other events
specified in Section 5.01;
(iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(iv) to comply with any requirement of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change, which change may affect only a particular
series of Securities, that does not adversely affect the rights of any
Holder of Securities of any series in any material respect;
(vi) to add guarantees by Subsidiary guarantors with respect to
Securities of any series, or to secure the Securities pursuant to the
procedures set forth in this Indenture;
(vii) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities and Coupons, if any,
appertaining thereto or to surrender any right or power herein
conferred upon the Company;
(viii) to provide that Bearer Securities may be registerable as
to principal, to change or eliminate any restrictions on the payment
of principal of, or premium, if any, on, Registered Securities or of
principal of, or premium, if any, or interest on, Bearer Securities or
to permit Registered Securities to be exchanged for Bearer Securities;
PROVIDED, that any such action shall not adversely affect the
interests of the Holders of Securities or any
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Coupons or any series in any material respect or permit or facilitate
the issuance of Securities of any series in uncertificated form;
(ix) in the case of any Securities and Coupons, if any,
appertaining thereto subordinated pursuant to Article 10, to make any
change in Article 10 that would limit or terminate the benefits
available to any holder of Senior Indebtedness (or Representatives
therefor) under Article 10;
(x) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities; provided,
however, that any such addition, change or elimination not otherwise
permitted under this Section 9.01 shall (i) neither (A) apply to any
Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision
nor (B) modify the rights of the Holder of any such Security with
respect to such provision or (ii) shall become effective only when
there is no such Security Outstanding;
(xi) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate 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; and
(xii) to establish the form or terms of Securities and Coupons,
if any, of any series as permitted by Section 2.02.
(b) [Insert for Subordinated or Senior Subordinated Indebtedness -- An
amendment under this Section may not make any change that adversely affects
the rights under Article 10 of any holder of Senior Indebtedness of the
Company then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent
to such change in writing.]
(c) After an amendment under this Section becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to all Holders, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.
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SECTION 9.02. WITH CONSENT OF HOLDERS.
(a) The Company and the Trustee, with the written consent of the
Holders of at least a majority of the principal amount of the Outstanding
Securities of each series affected by such supplemental Indenture, may
execute supplemental Indentures adding any provisions to or changing or
eliminating any of the provisions of this Indenture or of any supplemental
Indenture or modifying the rights of the Holders of the Securities of such
series, except that no supplemental Indenture or wavier, without the
consent of each Holder affected thereby, may:
(i) reduce the principal amount of Securities of any series whose
Holders must consent to an amendment or waiver;
(ii) reduce the rate of or extend the time for payment of
interest on any Securities or Coupon or reduce the amount of any
payment to be made with respect to any Coupon;
(iii) change the Currency in which any amount due in respect of
the Securities or Coupon is payable from that stated in the Security
or Coupon;
(iv) reduce the principal of or any premium on or change the
Stated Maturity of any Securities or alter the redemption or
repurchase provisions with respect thereto;
(v) reduce the relative ranking of any Securities;
(vi) release any security that may have been granted in respect
of the Securities;
(vii) impair the right of any Holder to institute suit for
enforcement of any payment on or with respect to such Holder's
Securities;
(viii) change any obligation of the Company to pay additional
interest pursuant to Section 4.03;
(ix) limit the obligation of the Company to maintain a paying
agency outside the United States for payment on Bearer Securities as
provided in Section 4.05 or
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limit the obligation of the Company to redeem a Bearer Security as
provided in Section 3.02(b); or
(x) make any change in Sections 6.04, 6.07 or 9.02.
(b) It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent approves the
substance thereof.
(c) A supplemental Indenture under this Section may not make any
change that adversely affects the rights under Article 10 of any holder of
Senior Indebtedness of the Company then outstanding unless the holders of
such Senior Indebtedness (or any group or representative thereof authorized
to give a consent) consent to such change in writing.
(d) After a supplemental Indenture under this Section becomes
effective, the Company shall mail to Holders a notice briefly describing
such supplemental Indenture. The failure to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of
a supplemental Indenture under this Section.
(e) A supplemental Indenture which changes or eliminates any covenant
or other provision of this Indenture which has been expressly included
solely for the benefit of one or more particular series of Securities and
Coupons, if any, or which modifies the rights of the Holders of Securities
and Coupons 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 and Coupons, if any, of any other series.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
Indenture or amendment to the Securities shall comply with the Trust Indenture
Act as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS.
(a) A consent to a supplemental Indenture or a waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of that Security
or portion of the Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent or waiver is not made on
the Security. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder's Security or portion of the Security
if the Trustee receives the notice of revocation before the date the
supplemental Indenture or waiver becomes effective. After a supplemental
Indenture or waiver becomes effective, it shall bind every Holder. A
supplemental Indentures or waiver becomes effective upon the execution of
such supplemental Indenture or waiver by the Trustee.
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(b) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding subsection, those Persons who
were Holders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If a supplemental
Indenture changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURE. The Trustee shall
sign any supplemental Indenture authorized pursuant to this Article 9 if the
supplemental Indenture does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing such supplemental Indenture, the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such supplemental Indenture is authorized or
permitted by this Indenture.
ARTICLE 10
SUBORDINATION OF THE SECURITIES
SECTION 10.01. APPLICABILITY OF ARTICLE; AGREEMENT TO SUBORDINATE. The
provisions of this Article 10 shall be applicable to the Securities of any
series (Securities of such series referred to in this Article 10 as
"Subordinated Debt Securities") designated pursuant to Section 2.02 as
subordinated to Senior Indebtedness. Notwithstanding any other provision to the
contrary in this Indenture, the Company covenants and agrees, and each Holder by
accepting a Subordinated Debt Security covenants and agrees, that the principal
of (and premium, if any) and interest on the Indebtedness now or hereafter
evidenced by the Subordinated Debt Security and this Indenture are subordinated
in right of payment, to the extent and in the manner provided in this Article,
to the prior payment in full in cash of all existing and future Senior
Indebtedness, and that the subordination provisions set forth in this Article
are for the benefit of, and shall be enforceable directly by, the holders of
Senior Indebtedness.
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Each Holder of a Subordinated Debt Securities authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate, in the sole discretion of the Trustee, to acknowledge or effectuate
the subordination between the Holders and the holders of Senior Indebtedness as
provided in this Article and appoints the Trustee as such Holder's
attorney-in-fact for any and all such purposes, including, in the event of any
voluntary or involuntary liquidation or dissolution of the Company, whether
total or partial, or in a bankruptcy, reorganization, insolvency, receivership,
dissolution, assignment for the benefit of creditors, marshaling of assets or
similar proceeding relating to the Company or its property, the timely filing of
a claim for the unpaid balance of such Holder's Securities in the form required
in said proceeding and cause said claim to be approved. If the Trustee does not
file a proper claim or proof of debt in the form required in such proceeding
prior to 20 days before the expiration of the time to file such claim or claims,
then the Principal Agent is hereby authorized to have the right to file and is
hereby authorized to file an appropriate claim for and on behalf of the Holders;
provided, however, that any such claim filed by the Principal Agent shall be
superseded by the claim, if any, subsequently filed by the Trustee.
Each Holder of a Subordinated Debt Security by accepting a Security
acknowledges and agrees that the subordination provision set forth in this
Article are, and are intended to be, an inducement and consideration to each
holder of any Senior Indebtedness, whether such Senior Indebtedness was created
before or after the issuance of the Securities, to acquire and continue to hold,
or to continue to hold, such Senior Indebtedness, and such holder of Senior
Indebtedness shall be deemed conclusively to have relied upon such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness, and such holder is made an obligee hereunder and may
enforce directly such subordination provisions.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment or
distribution (whether in cash, property, debt, equity or other securities, a
combination thereof or otherwise) to creditors or equity holders of the Company
in a voluntary or involuntary liquidation or dissolution of the Company, whether
total or partial, or in bankruptcy, reorganization, insolvency, receivership,
assignment for the benefit of creditors, marshaling of assets or similar
proceeding relating to the Company or its property:
(a) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of all amounts due or to become due on or in
respect of all Senior Indebtedness before Holders of Subordinated Debt
Securities shall be entitled to receive any Security Payment (as defined in
Section 10.03(a)); and
(b) until all Senior Indebtedness is paid in full in cash, any
Security Payment (as defined in Section 10.03(a)) to which Holders of a
Subordinated Debt Securities would be entitled but for this Article shall
be made to holders of Senior Indebtedness, as their interests may appear.
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Upon any prepayment, payment or distribution referred to in this
Article, the Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such
proceedings are pending for the purpose of ascertaining the identity of
Persons entitled to participate in such payment or distribution, the
holders of Senior Indebtedness, the amount thereof or payable thereon and
all other facts pertinent thereto or to this Article, and the Trustee and
the Holders shall be entitled to rely upon a certificate of the liquidating
trustee or agent or other Person (including any Representative of holders
of Senior Indebtedness) making any payment or distribution to the Trustee
or to the Holders for the purpose of ascertaining the identity of Persons
entitled to participate in such payment or distribution, the holders of
Senior Indebtedness, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto
or to this Article. 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 Section, the Trustee may requires such Person
(at the expense of the Holders) to furnish evidence to the reasonable
satisfaction of the Trustee, acting in good faith, as to the amount of such
Senior Indebtedness held by such Person, as to the extent to which such
Person is entitled to participate in such payment or distribution, and as
to other facts pertinent to the rights of such Person under this Section,
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 payment.
For purposes of this Article, a distribution may consist of cash,
securities or other property, by set-off or otherwise; PROVIDED that, for
purposes of this Article only, the words "cash, securities or other
property" shall not be deemed to include securities of the Company or any
other corporation ("REORGANIZATION SECURITIES") provided for by a plan of
reorganization or readjustment of the Company the payment of which is
subordinated, at least to the extent provided in this Article with respect
to the Subordinated Debt Securities, to the payment of all Senior
Indebtedness that may at the time be outstanding.
The consolidation or merger of the Company with or into any Person, or
the sale, assignment, transfer, lease, conveyance or other disposition of
all or substantially all of the Company's assets to any Person, upon the
terms and conditions set forth in Article 5, shall not be deemed to be
liquidation, dissolution or reorganization or similar proceeding relating
to the Company for purposes of this Section if the Person formed by or
surviving such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made, shall, as a part
of such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, comply with the conditions set forth in
Article 5.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS.
(a) Upon any Senior Indebtedness becoming due and payable, whether at
the stated maturity thereof or by acceleration or otherwise, such Senior
Indebtedness shall first be
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irrevocably and indefeasibly paid in full in cash, or the immediate payment
thereof duly provided for in cash, before the Company or any Person acting
on behalf of the Company shall directly or indirectly pay, prepay, redeem,
retire, repurchase or otherwise acquire for value, or make any deposit
pursuant to Article 8 in respect of, or make any other prepayment, payment
or distribution (whether in cash, property, securities or a combination
thereof or otherwise) on account of the principal of (or premium, if any)
or interest on, any Subordinated Debt Securities (each, a "SECURITY
PAYMENT").
(b) If there exists a default in payment of all or any portion of any
principal of (and premium, if any) and interest and fees, expenses, costs
and other obligations on Senior Indebtedness, and (i) 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 or (ii) any judicial proceeding shall be pending with respect
to any such default, then no Security Payment shall be made.
(c) In addition, during the continuance of any event of default (other
than a default referred to in subsection (b) of this Section 10.03) with
respect to any Specified Senior Indebtedness, as such event of default is
defined therein or in the instrument under which such Specified Senior
Indebtedness is outstanding, permitting the holders of such Specified
Senior Indebtedness to accelerate the maturity thereof under the terms of
such Specified Senior Indebtedness, and upon written notice of such event
of default given by the Principal Agent to the Trustee, with a copy to the
Company (the delivery of such shall not affect the validity of the notice
to the Trustee), then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no Security Payment
shall be made; provided, that if the holders of the Specified Senior
Indebtedness to which the default relates have not declared such Specified
Senior Indebtedness to be immediately due and payable within 179 days after
the occurrence of such default (or have declared such Specified Senior
Indebtedness to be immediately due and payable and within such period have
rescinded such declaration of acceleration), then, subject to the
provisions of Section 10.02 and 10.03(a), the Company shall resume making
any and all unpaid scheduled Security Payments. Any period during which any
Security Payment is prohibited pursuant to the immediately preceding
sentence is referred to in this Article as a "PAYMENT BLOCKAGE PERIOD."
Notwithstanding any other provisions of this Article or any other provision
of this Indenture, in no event shall a payment blockage period under this
Article extend beyond 179 days from the date on which such payment blockage
period commenced. Not more than one payment blockage period may be
commenced within any consecutive 365-day period with respect to the
Subordinated Debt Securities. For all purposes of this Article, no event of
default that existed or was continuing on the date of the commencement of
any payment blockage period with respect to the Specified Senior
Indebtedness initiating such payment blockage period shall be, or be made,
the basis for the commencement of a second payment blockage period by the
holder or holders of such Specified Senior Indebtedness at any time after
the 365-day period referred to in the previous sentence unless such event
of default shall have been cured or waived for a period of not less than 90
consecutive days.
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(d) The Company covenants that it will, upon request of the Trustee,
deliver an Officers' Certificate (with copies thereof to the Representative
of each class of Senior Indebtedness) showing in reasonable detail the
Senior Indebtedness outstanding as of the date of such Officers'
Certificate and the Representative of each class of Senior Indebtedness.
The Trustee may conclusively rely thereon except to the extent that it
shall have received, from the Representative of any class of Senior
Indebtedness, notice in writing controverting any of the statements made
therein. Not less than 10 days prior to making any distribution in respect
of Senior Indebtedness pursuant to this Section, the Trustee shall deliver
to each Representative of any class of Senior Indebtedness copies of the
most recent Officers' Certificate filed with it by the Company pursuant to
this subsection (d).
SECTION 10.04. SECURITY PAYMENTS PERMITTED IF NO DEFAULT. Nothing contained
in this Article or elsewhere in this Indenture, or in any of the Subordinated
Debt Securities, shall prevent the Company or any Person acting on behalf of the
Company, at any time except as otherwise provided in Sections 10.02 and 10.03
from making any Security Payment.
SECTION 10.05. WHEN SECURITY PAYMENT MUST BE PAID OVER. In the event that
any Security Payment is made to the Trustee or the Holders of Subordinated Debt
Securities that, because of this Article, should not have been so made or may
not be paid over to the Holders, such Security Payment shall be held by the
Trustee or the Holders who receive such Security Payment, as the case may be,
for the benefit of, and shall forthwith be paid over or delivered to, the
holders of the Senior Indebtedness remaining unpaid or their Representatives, as
their interests may appear, to the extent necessary to irrevocably and
indefeasibly pay such Senior Indebtedness in full in cash in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
SECTION 10.06. NOTICES BY THE COMPANY. The Company shall promptly notify
the Trustee, each Paying Agent and the Principal Agent of any facts known to the
Company that would cause a Security Payment to violate this Article, but failure
to give such notice shall not affect the subordination provided in this Article
of the Subordinated Debt Securities to Senior Indebtedness. Without limiting the
foregoing, if payment of the Subordinated Debt Securities is accelerated because
of an Event of Default, the Company shall promptly notify the Principal Agent of
the acceleration.
SECTION 10.07. SUBROGATION. After all Senior Indebtedness is irrevocably
and indefeasibly paid in full in cash and until the Subordinated Debt Securities
are paid in full, Holders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to Holders have been applied to the
payment of Senior Indebtedness. A distribution made under this Article to
holders of Senior
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Indebtedness which otherwise would have been made to Holders is not, as between
the Company and the Holders, payment by the Company on Senior Indebtedness.
SECTION 10.08. RELATIVE RIGHTS. This Article defines the relative rights of
Holders of Subordinated Debt Securities and holders of Senior Indebtedness.
Nothing in this Indenture shall:
(a) impair, as between the Company and the Holders of Subordinated
Debt Securities, the obligation of the Company, which is absolute and
unconditional, to pay the principal of (and premium, if any) and interest
on the Subordinated Debt Securities in accordance with their terms;
(b) affect the relative rights of Holders of Subordinated Debt
Securities and creditors of the Company other than holders of Senior
Indebtedness; or
(c) prevent the Trustee or any Holder of Subordinated Debt Securities
from exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders of Senior Indebtedness to receive
prepayment, payments and distributions otherwise payable to Holders of
Subordinated Debt Securities.
If the Company fails because of this Article to pay the principal of (or
premium, if any) or interest on a Subordinated Debt Security on the due date or
upon the acceleration thereof, the failure is still a Default or Event of
Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.
No right of any holder of Senior Indebtedness to enforce the subordination
of the Indebtedness evidenced by the Subordinated Debt Securities shall be
impaired by (a) any act or failure to act by the Company or by its failure to
comply with this Indenture, (b) any release of any collateral or any Guarantor
of the Company's obligations under the Senior Indebtedness, (c) any amendment,
supplement, extension, renewal, restatement or other modification of the Senior
Indebtedness, (d) any settlement or compromise of any Senior Indebtedness, (e)
the unenforceability of any of the Senior Indebtedness or (f) the failure of any
holder of Senior Indebtedness to pursue claims against the Company.
SECTION 10.10. DISTRIBUTION OF NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT. The Trustee or any
Payment Agent may continue to make payments in respect of the Subordinated Debt
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payment unless, not less than three
Business Days prior to the date of any such payment, a
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Responsible Officer of the Trustee receives written notice reasonably
satisfactory to it that payments in respect of the Subordinated Debt Securities
may not be made under this Article. Only the Company, a Representative
(satisfactorily identified to the Trustee) or a holder of a class of Senior
Indebtedness that has no Representative (satisfactorily identified to the
Trustee) may give the notice. Prior to the receipt of such notice, the Trustee
and any Paying Agent shall be entitled in all respects to assume that no such
facts exist. In any case, the Trustee shall have no responsibility to the
holders of Senior Indebtedness for payments made to Holders by the Company or
any Paying Agent unless cash payments are made at the direction of the Trustee
after receipt of such notice referred to above.
Neither the Trustee nor any Payment Agent shall be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have it were not Trustee.
This Section is solely for the benefit of the Trustee and any Payment
Agents and shall not limit the obligations of the Holders under Section 10.05.
SECTION 10.12. CONSENT OF HOLDERS OF SPECIFIED SENIOR INDEBTEDNESS. The
provisions of this Article (including the definitions contained in this Article
and references to this Article contained in this Indenture) shall not be
amended, waived or modified in a manner that would adversely affect the rights
of the holders of any Specified Senior Indebtedness, and no such amendment,
waiver or modification shall become effective, unless the holders of such
Specified Senior Indebtedness shall have consented in writing (in accordance
with the provisions of the agreement governing such Specified Senior
Indebtedness) to such amendment, waiver or modification.
SECTION 10.13. CONTRACTUAL SUBORDINATION. This Article 10 represents a bona
fide agreement of contractual subordination pursuant to Section 510(b) of the
United States Bankruptcy Code.
ARTICLE 11
CONVERSION OF SECURITIES
SECTION 11.01. APPLICABILITY; CONVERSION PRIVILEGE AND CONVERSION PRICE. If
pursuant to a Board Resolution with respect to Registered Securities of any
series denominated and payable in Dollars, Securities of such series may be
convertible into Common Stock of the Company, such conversion shall be in
accordance with the terms of such Board Resolution and (except as otherwise
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specified as contemplated by Section 2.02 for Securities of any series) in
accordance with this Article. Conversion provisions, if any, for Securities
denominated in a Foreign Currency or for Bearer Securities or for conversion
into a security other than Company Common Stock shall be specified pursuant to
Section 2.02.
Subject to and upon compliance with the provisions of this Article at the
option of the Holder thereof, any Security or any portion of the principal
amount thereof which is U.S. $1,000 or an integral multiple of U.S. $1,000
(unless otherwise specified in a Board Resolution or supplemental indenture with
respect to the Securities of the relevant series), may be converted at the
principal amount thereof, or of such portion thereof, into fully paid and
non-assessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100 of a share) of the Company, at the Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall expire at the close of business on the date specified for Securities of
such series. In case a Security or portion thereof is called for redemption,
such conversion right in respect of the Security or portion so called shall
expire at the close of business on the redemption date, unless the Company
defaults in making the payment due upon redemption.
The price at which Common Stock shall be delivered upon conversion (the
"Conversion Price") shall initially be the price per share of Common Stock at
which the Securities of the relevant series are convertible as set forth in any
Board Resolution with respect to such series (or any supplemental indenture with
respect thereto). The Conversion Price shall be adjusted in certain instances as
provided in Section 11.04.
SECTION 11.02. EXERCISE OF CONVERSION PRIVILEGE. In order to exercise the
conversion privilege, the Holder of any Security to be converted shall surrender
such Security, duly endorsed or assigned to the Company or in blank, at any
office or agency of the Company maintained for that purpose pursuant to Section
4.05, accompanied by written notice to the Company (which shall be substantially
in the form set forth in the form of Security) at such office or agency or, if
applicable, by notice in accordance with specified procedures that the Holder
elects to convert such Security or, if less than the entire principal amount
thereof is to be converted, the portion thereof to be converted. Securities
surrendered for conversion during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (except in the case of Securities
or portions thereof which have been called for redemption on a redemption date
within such period) be accompanied by payment in New York Clearing House funds
or other funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of Securities
being surrendered for conversion; PROVIDED, HOWEVER, that a Security surrendered
for conversion on an Interest Payment Date need not be accompanied by a payment,
and interest on the principal amount of the Securities being converted will be
paid on such Interest Payment Date, to the Holder of such Security on the
immediately preceding Record Date. Except as provided in the Securities, no
payment or adjustment shall be made upon any conversion on account of any
interest accrued on the
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Securities surrendered for conversion or on account of any dividends on the
Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to received the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the date of conversion, the Company
shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 11.03.
All Securities converted in accordance with the provisions of this Article
11 are, and shall be deemed to have been, transferred to or for the account of
the Company.
In the case of any Security which is converted in part only, upon such
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
SECTION 11.03. FRACTIONS OF SHARES. No fractional shares of Common Stock or
other such securities shall be issued upon conversion of Securities. If more
than one Security shall be surrendered for conversion at one time by the same
Holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof) so surrendered. Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of any Security or Securities (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the closing price per share of Common Stock at the
close of business on the day prior to the day of conversion on the New York
Stock Exchange or, if the Common Stock is not listed or admitted to trading on
such exchange, on the principal (as determined by the Company's Board of
Directors) U.S. securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any U.S.
securities exchange, on the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not listed or
admitted to trading on any U.S. securities exchange or quoted on such National
Market System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose.
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SECTION 11.04. ADJUSTMENT OF CONVERSION PRICE. The Conversion Price with
respect to any Security which is convertible into Common Stock shall be subject
to adjustment from time to time as follows:
(a) If the Company shall pay or make a dividend or other distribution
on any class of equity capital of the Company which is payable in Common
Stock, the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction of which (i) the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and (ii) the denominator shall be the
sum of such number of shares referred to in the preceding clause and the
total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination.
(b) If the Company shall issue rights or warrants to all holders of
its Common Stock entitling them to subscribe for or purchase Common Stock
at a price per share less than the current market price per share of Common
Stock (determined as provided in paragraph 11.04(d)) on the date fixed for
the determination of stockholders entitled to receive such rights or
warrants, the Conversion Price in effect at the opening of business on the
day following the date fixed for such determination shall be reduced by
multiplying such Conversion Price by a fraction of which (i) the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase
would purchase at such current market price and (ii) the denominator shall
be the number of shares of Common stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination.
(c) If outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon which the
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall be
consolidated into a smaller number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be,
to become effective immediately after the opening of business on the day
following the day upon which such subdivision or consolidation becomes
effective.
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(d) For the purpose of any computation under Section 11.03 and
11.04(b), the current market price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices for the five
consecutive trading days selected by the Company commencing not more than
20 trading days before, and ending not later than, the earlier of the day
in question and the day before the "ex" date with respect to the issuance
requiring such computation. The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange or, if
the Common Stock is not listed or admitted to trading on such exchange, on
the principal (as determined by the Company's Board of Directors) U.S.
securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any U.S. securities
exchange, on the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not listed or
admitted to trading on any U.S. securities exchange or quoted on such
National Market System, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for that purpose. For
purposes of this paragraph, the term "'ex' date," when used with respect to
any issuance means the first date on which the Common Stock trades regular
way on such exchange or in such market without the right to receive such
issuance or distribution.
(e) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 11.04(a) through 11.04(c), as it
considers to be advisable in order that any event treated for the United
States federal income tax purposes as a dividend of stock or stock rights
shall not be taxable to the recipients. The Company shall have the power to
resolve any ambiguity or correct any error in this paragraph 11.04(e) and
its actions in so doing shall be final and conclusive.
(f) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least one
percent in such price; PROVIDED, HOWEVER, that any adjustments which by
reason of this paragraph 11.04(f) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(g) For purposes of this Section, each Holder of Securities shall be
deemed to have failed to exercise any right to elect the kind or amount of
securities receivable upon the payment of any such dividend, subdivision,
consolidation or reclassification (PROVIDED THAT if the kind or amount of
securities receivable upon such dividend, subdivision, consolidation or
reclassification for each non-electing share shall be deemed to be the kind
and amount so receivable per share by a plurality of the non-electing
shares).
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SECTION 11.05. NOTICE OF ADJUSTMENT OF CONVERSION PRICE. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 11.04 and shall prepare a certificate signed by an
Officer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee and at each
office or agency maintained for the purpose of conversion of Securities
pursuant to Section 4.05; and
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be required,
and as soon as practicable after it is required, such notice shall be
mailed by the Company to all Holders at their last addresses as they shall
appear in the Security Register.
SECTION 11.06. NOTICE OF CERTAIN CORPORATION ACTION. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of equity capital of any class or of any other rights; or
(c) the Company or any Subsidiary shall commence a tender offer or
other offer to purchase any of its Common Stock; or
(d) of any reclassification of the Common Stock of the Company (other
than a subdivision or consolidation of its outstanding Common Stock), or of
any consolidation or merger to which the Company is a party and for which
approval of stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(e) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then the Company shall cause to be filed at the Corporate Trust Office of the
Trustee and at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 4.05, and shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Security Register, at least
20 days (or 10 days in any case specified in clause (a) or (b) above) prior to
the applicable record, effective or expiration date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
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entitled to such dividend, distribution, rights or warrants are to be
determined, (ii) the date on which such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their Common Stock for securities, cash
or other property deliverable upon such reclassification consolidation, merger,
sale, transfer, dissolution, liquidation or winding up, or (iii) the date on
which such tender offer or other offer to purchase commenced, the date on which
such tender offer or other offer to purchase is scheduled to expire unless
extended, the consideration offered and the other material terms thereof (or the
material terms of any amendment thereto). Neither the failure to give any such
notice nor any defect therein shall affect the legality or validity of any
action described in clauses (a) through (e) of this Section 11.06.
SECTION 11.07. COMPANY TO RESERVE COMMON SHARES. The Company shall at all
times reserve and keep available, free from pre-emptive rights, out of its
authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, the number of its duly authorized shares of Common
Stock then issuable upon the conversion of all Outstanding Securities.
SECTION 11.08. TAXES ON CONVERSION. The Company will pay any and all taxes
that may be payable in respect of the issue or delivery of Common Stock on
conversion of Securities pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of Common Stock in a name other than that of the
Holder of the Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid.
SECTION 11.09. COVENANT AS TO COMMON STOCK. The Company covenants that all
Common Stock which may be issued upon conversion of Securities will upon issue
be fully paid and non-assessable and, except as provided in Section 11.08, the
Company will pay all taxes, liens and charges with respect to the issue thereof.
SECTION 11.10. COMPANY TO RECEIVE CONVERTED SECURITIES. All Securities
surrendered for conversion pursuant to Section 11.02 shall be delivered to the
Company.
SECTION 11.11. PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF
ASSETS. In case of any consolidation of the Company with, or merger of the
Company into, any other corporation, any merger of another corporation into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding Common Stock of the Company)
or any sale or transfer of all or substantially all of the assets of the Company
(treating the Company and its Subsidiaries as a single consolidated entity and
treating any sale by a Subsidiary as a sale by the Company for such purpose),
the corporation formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Security then
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outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 11.01, to convert such Security
only into the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer by a holder of the number of
shares of Common Stock of the Company into which such Security might have been
converted immediately prior to such consolidation, merger, sale or transfer,
assuming such holder of Common Stock of the Company (i) is not a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer (PROVIDED THAT if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer by
others than a constituent Person or an Affiliate thereof and in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then, for the purpose of this Section, the kind and amount of securities, cash
and other property receivable upon such consolidation, merger, sale or transfer
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The Trustee shall not be under any responsibility to determine the
correctness of any provision contained in such supplemental indenture relating
to either the kind or amount of shares, other securities, cash or property
receivable by Holders upon the conversion of their Securities after any such
consolidation, merger, sale or transfer. The above provisions of this Section
shall similarly apply to successive consolidations, mergers, sales or transfers.
SECTION 11.12. RESPONSIBILITY OF TRUSTEE AND CONVERSION AGENT. Neither the
Trustee nor any agent appointed to effect conversions shall at any time be under
any duty or responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any such
conversion agent shall be accountable with respect to the validity or value (or
the kind or amount) of any Common Stock or of any securities or property which
may at any time be issued or delivered upon the conversion of any Security; and
neither the Trustee nor any such conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any Common Stock or stock
certificates or other securities or property or to make any cash payment upon
the delivery of any Security for the purpose of conversion or to comply with any
of the covenants contained in this Article.
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ARTICLE 12
MISCELLANEOUS
SECTION 12.01. COMPLIANCE CERTIFICATES AND OPINIONS. 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, to the extent
required by the TIA or this Indenture, (i) an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Indenture (including any
covenant, compliance with which constitutes a condition precedent) relating to
the proposed action have been complied with and (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents 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:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) 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;
(iii) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 12.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer
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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, and may state that it is so 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 that the certificate of opinion or representations with respect to
such matters is 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 12.03. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage of Holders of Securities of a particular series may be
embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Holders of Securities
of a particular series in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are received by the
Trustee and, where it is hereby expressly required, by the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 7.01 and 7.02)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(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 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, including the execution of such instrument or
writing without more.
(c) The ownership, principal amount and serial numbers of Registered
Securities of any series held by any Person, and the date of holding the
same, shall be proved by the Security Register. The Company, the Trustee
and any Paying Agent may deem and treat the Holder of any Bearer Security
or Coupon as the absolute owner of such Bearer Security or Coupon (whether
or not
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such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and premium, if any, and (subject to
Section 2.02) interest on such Bearer Security or Coupon and for all other
purposes, and neither the Company nor the Trustee nor any Paying Agent
shall be affected by any notice to the contrary; and all such payments so
made to any such Holder for the time being, or upon his order, shall be
valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Bearer Security or
Coupon.
(d) If the Company shall solicit from the Holders of Securities of any
series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to
Board Resolution, fix in advance a record date for the determination of
Holders of Registered Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Such record date shall be the
record date specified in or pursuant to such Board Resolution, which shall
be a date not earlier than the date 30 days prior to the first solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record of
Registered Securities at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities of any series have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities of any series shall be computed as of such record
date; PROVIDED that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of a Security of any series 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.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any different part of such principal
amount.
SECTION 12.04. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the Trust Indenture Act, the
required provision shall control. If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
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SECTION 12.05. NOTICES. Any notice or communication shall be in writing and
delivered in person, or sent by registered or certified mail, by air courier
guaranteeing overnight delivery or by fax (promptly confirmed by telephone) and
addressed as follows:
if to the Company:
Basin Exploration, Inc.
370 Seventeenth Street
Suite 3400
Denver, CO 80202
Attn: Chief Financial Officer
Phone: (303) 685-8000
Fax: (415) 685-8010
with a copy to:
Basin Exploration, Inc.
370 Seventeenth Street
Suite 3400
Denver, CO 80202
Attn: General Counsel
Phone: (303) 685-8000
Fax: (415) 685-8010
if to the Trustee:
-----------------------
-----------------------
Attention: ______________
Phone: _________________
Fax: __________________
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication sent to a Registered Holder shall be sent to
the Registered Holder at the Holder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so sent within the
time prescribed.
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<PAGE>
Any notice required or permitted to a Bearer Holder by the Company or the
Trustee pursuant to this Indenture shall be deemed to be properly given if
published on two separate business days in an Authorized Newspaper or Newspapers
in such Place or Places of Payment specified pursuant to Section 2.02, the first
such publication to be not earlier than the earliest date and not later than two
business days prior to the latest date prescribed for the giving of such notice.
Notwithstanding the foregoing, any notice to Holders of floating rate Securities
regarding the determination of a periodic rate of interest, if such notice is
required pursuant to Section 2.02, shall be sufficiently given if given in the
manner specified pursuant to Section 2.02.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspaper or by
reason of any other cause it shall be impracticable to give notice by
publication, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Failure to send a notice or communication to a Holder or any defect in it
shall not effect its sufficiency with respect to other Holders. If a notice or
communication is given in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 12.06. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities. The Company, the Trustee,
the Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 12.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The Trustee
may make reasonable rules for action by or a meeting of Holders. The Registrar
and the Paying Agent may make reasonable rules for their functions.
SECTION 12.08. LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a Sunday or
a day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 12.09. GOVERNING LAW. This Indenture and the Securities 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 that the application of the laws of another jurisdiction would be
required thereby.
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SECTION 12.10. 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 this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 12.11. SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE
OF PROCESS; WAIVER OF IMMUNITIES.
(a) The Company hereby irrevocably, to the fullest extent it may do so
under applicable law, submits to the jurisdiction of any New York State or
federal court sitting in the Borough of Manhattan, The City of New York and
to the courts of its own corporate domicile with respect to all actions
brought against it as a defendant in respect of any suit, action or
proceeding or arbitral award arising out or relating to this Indenture, the
Securities or any transaction contemplated hereby or thereby (a
"PROCEEDING"), and irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts, to the fullest extent it may do so under applicable law. The
Company irrevocably waives, to the fullest extent it may do so under
applicable law, trial by jury and any objection which it may now or
hereafter have to the laying of the venue of any such Proceeding brought in
any such court and any claim that any such Proceeding brought in any such
court has been brought in an inconvenient forum. The Company acknowledges
that it has, by separate written instrument, irrevocably appointed _______
(the "PROCESS AGENT"), with an office at
_______________________________________, as its authorized agent to receive
on behalf of the Company and its property service of copies of the summons
and compliant and any other process which may be served in any proceeding,
and that the Process Agent has accepted such appointment. If for any reason
such Process Agent shall cease to be such agent for service of process, the
Company shall forthwith appoint a new agent of recognized standing for
service of process in the State of New York, United States and deliver to
the Trustee a copy of the new agent's acceptance of that appointment within
30 days. Nothing herein shall affect the right of the Trustee, any Paying
Agent or any Holder to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against the Company
in any other court of competent jurisdiction.
(b) Service may be made by delivering by hand a copy of such process
to the Company, in care of the Process Agent at the address specified
above. The Company hereby irrevocably authorizes and directs the Process
Agent to accept such service on its behalf. Failure of the Process Agent to
give notice to the Company or failure of the Company to receive notice of
such service of process shall not affect in any way the validity of such
service on the Process Agent or the Company. As an alternative method of
service, the Company also irrevocably consents to the service of any and
all process in any such proceeding by the delivery by hand of copies of
such process to the Company, at the applicable address specified in Section
12.05 hereof or at the address most recently furnished in writing by the
Company to the Trustee. The Company covenants and
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agrees that it shall take any and all reasonable action, including the
execution and filing of any and all documents, that may be necessary to
continue the designation of the Process Agent specified above in full force
and effect during the term of the Securities, and to cause the Process
Agent to continue to act as such.
(c) The Company irrevocably agrees that, in any Proceedings anywhere
(whether for an injunction, specific performance or otherwise), no immunity
(to the extent that it may at any time exist, whether on the grounds of
sovereignty or otherwise) from such Proceedings, from attachment (whether
in aid of execution, before judgment or otherwise) of its assets or from
execution of judgment shall be claimed by it or on its behalf or with
respect to its assets, except to the extent required by applicable law, any
such immunity being irrevocably waived, to the fullest extent permitted by
applicable law. The Company irrevocably agrees that, where permitted by
applicable law, it and its assets are, and shall be, subject to such
Proceedings, attachment or execution in respect of its obligations under
this Indenture or the Securities.
SECTION 12.12. SUCCESSORS. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
SECTION 12.13. MULTIPLE 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. One signed copy is enough to prove this
Indenture. This Indenture may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 12.14. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first above written.
THE COMPANY:
BASIN EXPLORATION, INC.
By:
-------------------------------------------
Name:
Title:
TRUSTEE:
----------------------------------------------
By:
-------------------------------------------
Name:
Title:
S-1
[Letterhead of Davis, Graham & Stubbs LLP]
September 22, 1997
Basin Exploration, Inc.
370 Seventeenth Street, Suite 3400
Denver, Colorado 80202
Re: Shelf Registration Statement on Form S-3 Relating
to $200,000,000 Aggregate Principal Amount
of Equity Securities and Debt Securities
Ladies and Gentlemen:
We have acted as counsel for Basin Exploration, Inc., a Delaware
corporation (the "Company") in connection with the preparation of a Registration
Statement on Form S-3 (the "Registration Statement") filed by the Company with
the Securities and Exchange Commission. The Registration Statement relates to
the registration under the Securities Act of 1933, as amended (the "1933 Act"),
of $200,000,000 principal amount of equity securities (the "Equity Securities")
and debt securities (the "Debt Securities" and together with the Equity
Securities, the "Securities") that may be issued by the Company.
This opinion is delivered pursuant to the requirements of Item 601(b)(5) of
Regulation S-K under the 1933 Act.
We have examined the form of the Indenture filed by the Company as an
exhibit to the Registration Statement (the "Indenture"). In addition, we have
examined and relied on originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records and other instruments,
have made such inquiries as to questions of fact of officers and representatives
of the Company and have made such examinations of law as we have deemed
necessary or appropriate for purposes of giving the opinion expressed below. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies.
<PAGE>
Basin Exploration, Inc.
Page 2
We have assumed for purposes of this opinion (i) the corporate power,
authority and legal right of the trustee or trustees (the "trustees") under the
Indenture to execute, deliver and perform their obligations under the Indenture,
that the performance of such obligations by the trustees will not violate their
charters or by-laws and that the trustees have the legal ability to exercise
their trust powers and (ii) that the Indenture will have been duly
authenticated, authorized, executed and delivered by the applicable trustee at
the time of issuance of any Debt Securities.
The following opinions are limited solely to the applicable federal law of
the United States of America, the law of the State of Colorado and the General
Corporation Law of the State of Delaware. While we are not licensed to practice
in the State of Delaware, we have reviewed applicable provisions of the General
Corporation Law of Delaware as we have deemed appropriate in connection with the
provisions expressed herein. Except as described, we have neither examined nor
do we express any opinion with respect to Delaware law.
Based upon and subject to the foregoing, we are of the opinion that:
1. The issuance and sale by the Company of up to $200,000,000 of
Securities, as provided in the Registration Statement, have been duly and
validly authorized by all necessary corporate action of the Company.
2. The Company's common stock, $0.01 par value per share (the "Common
Stock"), when issued and sold in conformity with the resolutions of the board of
directors of the Company and as contemplated in the Registration Statement, the
prospectus contained therein (the "Prospectus") and in the applicable supplement
to the Prospectus, will be validly issued, fully paid and non-assessable.
3. The Company's Equity Securities (other than the Common Stock), when
issued and sold in conformity with the resolutions of the board of directors of
the Company and as contemplated in the Registration Statement, the Prospectus
and in the applicable supplement to the Prospectus, will be validly issued.
4. When (i) the Registration Statement has become effective under the 1933
Act, (ii) the applicable Indenture has been qualified under the Trust Indenture
Act of 1939, as amended, and has been duly executed and delivered by the parties
thereto, (iii) the definitive terms of any Debt Securities and of their issue
and sale have been duly established in conformity with the resolutions
<PAGE>
of the board of directors of the Company and the applicable Indenture so as not
to violate any applicable law or agreement or instrument then binding on the
Company, (iv) such Debt Securities have been duly executed and authenticated in
accordance with the Indenture and (v) such Debt Securities have been issued and
sold as contemplated in the Registration Statement, the Prospectus and in the
applicable supplement to the Prospectus, such Debt Securities will constitute
valid and legally binding obligations of the Company, entitled to the benefits
provided by the applicable Indenture, except (A) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
this firm under the heading "Legal Matters" in the Prospectus included in the
Registration Statement as the counsel who will pass upon the validity of the
securities. In giving this consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Davis, Graham & Stubbs LLP
DAVIS, GRAHAM & STUBBS LLP
Exhibit 12
BASIN EXPLORATION, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(THOUSANDS OF DOLLARS, EXCEPT RATIO)
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income (loss) before income taxes $21,330 $(27,327) $5,891 $8,292 $4,262
Fixed Charges:
Interest expense 2,254 6,432 3,618 3,160 1,801
Interest component of rental expense 236 237 145 163 101
------ -------- ----- ------ -----
Total fixed charges 2,490 6,669 3,763 3,323 1,902
------ -------- ----- ------ -----
Earnings before income taxes and
fixed charges $23,820 $(20,658) $9,654 $11,615 $6,164
Ratio of earnings to fixed charges 9.6 (a) 2.6 3.5 3.2
(a) Earnings did not cover fixed charges in 1995 by $27,327.
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 14, 1997
included in Basin Exploration, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1996 and to all references to our Firm included in this
Registration Statement.
Arthur Andersen LLP
Denver, Colorado
September 22, 1997
Exhibit 23.2
[ON NETHERLAND, SEWELL & ASSOCIATES, INC. LETTERHEAD]
September 22, 1997
Basin Exploration, Inc.
370 Seventeenth Street, Suite 3400
Denver, Colorado 80202
Ladies and Gentlemen:
We hereby authorize the reference to the following report prepared by
Netherland, Sewell & Associates, Inc. in a Registration Statement on Form S-3
for the offering and sale, from time to time, of up to $200,000,000 of
Securities, as described in such Registration Statement, and in any prospectus
contained therein or prospectus supplement thereto, filed or to be filed by
Basin Exploration, Inc. with the United States Securities and Exchange
Commission:
1. An audit of proved oil and gas reserves and future revenue prepared by
Basin Exploration, Inc. as of January 1, 1997, dated January 27, 1997.
We further consent to the reference to our firm under the caption "Experts"
in such Registration Statement and prospectuses, as such Registration Statement
may be amended.
Very truly yours,
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/Clarence M. Netherland
---------------------------------
Exhibit 23.3
[ON RYDER SCOTT COMPANY LETTERHEAD]
September 22, 1997
Basin Exploration, Inc.
370 Seventeenth Street, Suite 3400
Denver, Colorado 80202
Ladies and Gentlemen:
We hereby authorize the reference to the following report prepared by Ryder
Scott Company in a Registration Statement on Form S-3 for the offering and sale,
from time to time, of up to $200,000,000 of Securities, as described in such
Registration Statement, and in any prospectus contained therein or filed by
Basin Exploration, Inc. with the United States Securities and Exchange
Commission:
1. Estimate of Reserves, Future Production and Income Attributable to
Eugene Island Blocks 64 and 65 as of January 1, 1997, dated January 28,
1997.
We further consent to the reference to our firm under the caption "Experts"
in such Registration Statement and prospectuses, as such Registration Statement
may be amended.
/s/Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
